Supreme Court allows appeal against ruling on possession orders

The Supreme Court has agreed to allow a bank to bring a further appeal against a significant ruling that the Circuit Court had no jurisdiction to make possession orders for six domestic properties.

The ruling was made by the Court of Appeal last July in a judgment involving what it described as “unfortunate and unintended” consequences for other cases.

The judgment means possession proceedings which do not fall within exceptions created by Acts of 2009 and 2013 will have to be brought in the High Court rather than the Circuit Court, creating additional costs for litigants. It also raises issues about the general jurisdiction of the Circuit Court to deal with property disputes.

In a written determination published this week, a three-judge Supreme Court granted an application by Permanent TSB to appeal that ruling to the Supreme Court on the basis that the case raised issues of general public importance.

The Court of Appeal judgment decided legal issues raised in proceedings by Permanent TSB against David Langan.

In February 2015, PTSB secured orders from the Circuit Court for possession of six properties, all domestic dwellings, after Mr Langan defaulted on repayments under a mortgage of February 2008 with PTSB.

Five of the properties are in north Co Dublin and one is in Smithfield in the city centre.

Mr Langan appealed to the High Court where Ms Justice Marie Baker referred legal issues to the Court of Appeal.

Conflicting decisions

Two High Court judges had previously given conflicting decisions as to whether the Circuit Court had jurisdiction to make possession orders.

The core legal issue before the Court of Appeal centred on whether, if a property is not rateable under the Valuation Act 2001, the Circuit Court has jurisdiction to hear proceedings brought by a mortgage lender for possession orders.

Mr Langan argued the Circuit Court had no jurisdiction, as all six properties in his case were constructed after 2002 and, under the Valuation Act 2001, were not rateable.

The Court of Appeal found the 2001 Act specially provides domestic dwellings, with minor exceptions not relevant to this case, shall not be rateable. Apartments and mixed-use premises are rateable in some limited circumstances, it noted.

When, under the 2001 Act or otherwise, a property is not rateable, the Circuit Court’s jurisdiction to make possession orders under the Courts Supplemental Provisions Act 1961 is excluded, and the Circuit Court also has no jurisdiction if the property does not have a rateable valuation over €253.95, the appeal court found.

Cases which may be affected by the findings are where a dwelling was built after May 2002, the mortgage was entered into before December 1st, 2009, and repossession proceedings were initiated before July 31st, 2013.

The dispute over the Circuit Court’s jurisdiction concerning property disputes arose as a consequence of the Valuation Act 2001 abolishing rates on domestic dwellings. It became law in May 2002.

While the Land and Conveyancing Law Reform Act 2009, which came into effect on December 1st, 2009, conferred a new jurisdiction on the Circuit Court in mortgage cases which was not dependent on rateable valuation, that jurisdiction applies to mortgages for housing loans created after that date.

The Land and Conveyancing Act 2013, which extended the Circuit Court’s jurisdiction to mortgages for principal private residences created before December 1st, 2009, is effective only from July 31st, 2013.