Conflicting judgments delay home repossession cases

Mrs Justice Deirdre Murphy ruled in May that the Circuit Court lacked jurisdiction to hear a case which saw Bank of Ireland Mortgage Bank attempt to repossess the home of a couple from Cavan – Christopher Ward and Laura Finnegan.

But in a judgment delivered at the end of last month, Mr Justice Seamus Noonan ruled the Circuit Court had authority to hear an analogous case. He upheld and order granted the same bank to repossess a buy-to-let house held by two men – Alan Giblin and Shane Hanley – in Tuam, Co Galway.

According to legal sources, a substantial proportion of repossession cases have been adjourned since the May judgment as lenders determined their options or were struck out as lenders issued proceedings anew.

One barrister explained that the contrary judgments were “causing additional delays for borrowers” as well as “further distress to already distressed borrowers”.

The mortgage-holders in both cases argued their dwellings were outwith the jurisdiction of the Circuit Court as a consequence of legislative changes made since 1978 – when domestic rates were scrapped.

All domestic dwellings in the State were deemed “rateable” between 1978 and 2001 – despite the fact rates were not paid on them.

But the Valuation Act 2001 excluded “any domestic premises” from rating. As a result, domestic properties constructed since the legislation came into force in 2002 were not rated and indeed were not rateable.

This mean homes built in the 1980s and 1990s were rateable but those built after January 2002 were not.

To deal with this lacuna in the law, the Land and Conveyancing Law Reform Act was introduced. It afforded the Circuit Court a new power in disputes regarding housing loan agreements made after December 1, 2009.

Legislation brought in by Michael McDowell while he was Minister for Justice extended the jurisdiction of the Circuit Court to loan agreements made before December 2009. However, this was not applicable to court cases begun before July 31, 2013.

Mrs Justice Murphy and Mr Justice Noonan’s cases both considered the jurisdiction of the Circuit Court to hear home repossession cases in which the dwelling is not “rateable”. One lawyer said the contradictory judgments “brought a huge lack of clarity”.