Application for judicial review of possession of family home refused

About this case:

• Judgment:
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In 2004 ACC Loan Management Ltd. (ACCLM) had advanced two loan facilities to Temple Spa Limited.

The security provisions required that the company’s directors provide a personal guarantee supported by a full legal charge over Temple House on 14.5 acres at Temple, Horseleap, Co. Westmeath.

In 2007, Declan and Bernadette Fagan entered into a home loan agreement with ACCLM for a facility up to a maximum of €250,000.00 by way of equity release to be applied in reduction of the debt owing by the company to ACCLM. The same security applied in respect of this loan.

In 2010 ACCLM demanded payment by the company of the monies due. By a further letter of demand dated 1st November, 2010 payment was sought from the applicants for the monies due by the company under the first and second guarantees. The monies were not discharged.

ACCLM initiated proceedings against the applicants and judgment was granted against the applicants on 9th May, 2011. This sum was not discharged and the applicants were adjudicated bankrupt.

Proceedings were issued by way of special summons in the High Court seeking possession of the property at Temple.

Prior to the commencement of those proceedings the solicitors for ACCLM had been informed by the official assignee in bankruptcy that he had informed Mr and Mrs Fagan that having taken senior counsel’s opinion, he had determined not to challenge the security relied upon by ACCLM.

The High Court found that as Mr and Mrs Fagan, as bankrupts, were not able to challenge the validity of the charge, but as they were in possession of Temple House as their family home and the proceedings for possession were against them, they could make submissions in opposition to the application for possession, but only upon the basis that ACC is the registered owner of a charge over the property pursuant to the charge.

It was noted that ACCLM could only take possession in accordance with the law, and Mr and Mrs Fagan raised issues as to the entitlement of the bank to an order for possession pursuant to s. 62(7) of the Registration of Title Act 1964.

ACCLM had to establish that its claim for possession came within s. 62(7) prior to the 1st December, 2009. It had to establish compliance with the two requirements expressly set out in subsection namely, that the plaintiff was the registered owner of the charge and that repayment of the principal monies secured by the charge had become due by that date.

The court accepted that the ACCLM was the registered owner of the charge, but concluded that the principal monies secured by the charge had not become due and payable prior to the 1st December, 2009.

Following the enactment of the Land and Conveyancing Law Reform Act 2013, the plaintiff initiated proceedings in the Circuit Court for possession of the charged property by way of Civil Bill for Possession dated 18th March, 2014 (Record No. 120/2014), taking the view that they could now rely upon s. 62(7) of the Registration of Title Act 1964.

The Court made an order for possession of the property in favour of the plaintiff, and an application by Mr Fagan for a stay of execution on the order in the event of an appeal by the defendants was granted.

The High Court identified the test to be applied in an application seeking leave to apply for judicial review as being set out in G. v. Director of Public Prosecutions 1 I.R. 37, and requiring sufficient interest in the matter, that the facts averred in the affidavit would be sufficient, if proved, to support a stateable ground for the form of relief sought, and that an arguable case in law can be made.

The applicants alleged that they were denied a fair hearing at the Circuit Court, that the Circuit Court acted beyond its jurisdiction in permitting the respondent locus standi having regard to an alleged unlawful disposition by the Official Assignee of his interest in the family home, that certain defences were not open to the applicants, and that the Court erred in law in allowing the proceedings to proceed where the applicants’ daughter of over 18 years old had not been served notice.

The Court established the two fundamental attributes of a fair hearing as being that nobody should be a judge in their own cause, and that parties must be heard audi alteram partem.

The submission made was that the Circuit Court’s conclusion that the vesting of the property in the Official Assignee in the course of the bankruptcy and the legal consequences of same disentitled the applicants to a locus standi to challenge the charge on several grounds constituted an error of law which is so fundamental as to vitiate the fairness of the hearing.

However, court was satisfied that the determination by the learned judge of the locus standi of the applicants was a decision made within jurisdiction.

The applicants had a full opportunity to canvass and argue the issue but the court ruled against them. That was a ruling made within the jurisdiction properly exercisable by the learned judge.

The order for possession was subject to the applicants’ right of appeal to the High Court where this issue might have been re-canvassed (see The State (Abenglen Properties) v. Corporation of Dublin I.R. 381 McGoldrick v. An Bord Pleanála I.R. 497). No appeal was taken.

In relation to the second point, it was argued that the Official Assignee had made a disposition of the property, which was void.

However, the decision of the Official Assignee not to challenge the validity of the security was not a disposition. Further, this issue of possession was a matter to be determined on the merits.

Lastly, as the daughter was no longer living at home, there was no requirement to serve notice.

The applicants had therefore not demonstrated an arguable case, and the application was refused.