Court of Appeal: Circuit Court had no jurisdiction in possession proceedings

About this case:

• Judgment:
  External link

Background

In February 2008, David Langan entered into a mortgage with Permanent TSB for six properties, subsequently defaulting on repayments, and proceedings for possession of the properties were instituted in the Circuit Court by Permanent TSB.

After the enactment and coming into force of the Land and Conveyancing Law Reform Act 2013, further proceedings for possession in respect of the same properties were instituted in the form of two Civil Bills in the Circuit Court and the earlier proceedings were discontinued.

The two Civil Bills in question both stated “the annual rateable valuations of each of the said properties does not exceed €253.95”.

In February 2015 the Circuit Court granted orders for possession of all six properties and dismissed all defences raised by Mr Langan. Here it was noted that none of the properties was the principal private residence of Mr Langan, and no point was taken in relation to the jurisdiction of the Circuit Court to hear the proceedings.

Conflicting High Court judgments

On 20th May 2015 Justice Murphy delivered her judgment in Bank of Ireland v Finnegan IEHC 304, where it was held that the Circuit Court did not have jurisdiction to hear possession suits in respect of un-rateable properties.

In light of that decision Mr Langan then put in issue the jurisdiction of the Circuit Court to grant the orders for possession which he was appealing. In December 2015, Mr Langan swore a subsequent affidavit in which he stated that all the properties in question were dwellings which had been constructed after 2002 and were, by virtue of provisions contained in the Valuation Act 2001 unrateable.

On 26th November 2015 Justice Noonan delivered his judgment in Bank of Ireland Mortgage Bank v. Hanley IEHC 738, taking a different view to that which had been taken in Finnegan – concluding that the Circuit Court did have such jurisdiction in such circumstances.

When this matter came on for hearing before Justice Baker in February 2016, Mr Langan was successful in seeking a case stated to the Court of Appeal in view of the two conflicting decisions given by different High Court judges in respect of the jurisdictional issue.

Jurisdictional dispute

To sum up the jurisdictional dispute, Justice Hogan stated that, in the case of possession proceedings concerning property, the entire premise of the jurisdiction of the Circuit Court as vested by section 22(1) of the Courts (Supplemental Provisions) Act 1961 and the Third Schedule (as amended) is that the property in question must be rateable. Although the effect of the Valuation Act 2001 was to make dwellings no longer rateable, this also had the consequence that the Circuit Court had no jurisdiction to hear disputes in relation to such property.

Justice Hogan stated that this was ameliorated by the enactment of the Land and Conveyancing Law Reform Act 2013 which conferred such a jurisdiction in respect of possession suits affecting principal private residences where the mortgage was created before 1st December 2009. The Circuit Court was also given such jurisdiction in respect of all property by Part 10 of the Land and Conveyancing Law Reform Act 2009 where the mortgage was created after 1st December 2009.

Consequently, Justice Hogan stated that the Circuit Court had no jurisdiction to hear Mr Langan’s proceedings because the properties were domestic dwellings and not rateable.

Since the enactment of Part 10 of the Land and Conveyancing Law Reform Act 2009 the Circuit Court enjoys a general jurisdiction in respect of such dwellings which is not dependent on rateable valuation, however this only applies where the mortgage in question was created after 1st December 2009. The Circuit Court also enjoys a similar general jurisdiction by virtue of the Land and Conveyancing Law Reform Act 2013 in respect of principal private dwellings.

That being said, neither of these exceptions applied to the present case – the mortgages over the properties were all created prior to 1st December 2009 and the properties in question were not the principal private residence of Mr Langan.

Justice Hogan emphasised that these conclusions would likely lead to unfortunate and unintended consequences – meaning that henceforth, possession proceedings not otherwise falling within the exceptions created by the 2009 Act and the 2013 Act would have to be commenced in the High Court rather than the Circuit Court, creating additional costs for litigants and depriving the parties of access to local courts in the manner in which the Constitution actually intended.

Furthermore, the general jurisdiction of the Circuit Court to deal with property disputes concerning domestic dwellings would now be open to question (i.e. other than those concerning applications for possession).

Questions posed by the High Court

Concerning the questions posed by the High Court, Justice Hogan found that while the fourth and fifth questions did not arise:

(1) If a property is not rateable by virtue of the Valuation Act 2001, the Circuit Court’s jurisdiction under section 22(1) of the Courts (Supplemental Provisions) Act 1961 is excluded, subject to the answer given in respect the third point below.

(2) The Circuit Court did not have jurisdiction by virtue of the property not having a rateable valuation that exceeded €253.95.

(3) Where the defendant has put the jurisdiction of the Circuit Court at issue, that Court in not entitled to proceed to judgment in respect of a domestic dwelling which has been rendered unrateable by the Valuation Act 2001, unless the case in question comes within either Part 10 of the 2009 Act or s. 3 of the 2013 Act.