Ex-rugby star loses challenge to repossession orders

Former Irish rugby star Frankie Sheahan and his business partner brother, Joseph, have lost their High Court challenge against Bank of Ireland taking possession of a number of their property investments and appointing a receiver over them.

Ms Justice Iseult O’Malley today held that the bank was entitled, under “contractual powers” within the mortgage deeds, both to appoint a receiver to the Sheahan properties and take possession of those where there had been repayment default.

The judge, in a related decision that is of little comfort to the Sheahan brothers, held that the bank had no statutory powers under the faulty Land and Conveyancing Law Reform Act as drawn up prior to 1st December, 2009, to take possession or appoint a receiver.

The Act, following a landmark decision by Ms Justice Elizabeth Dunne striking down certain powers of banks to seize and sell property, had to be re-enacted.

The afterthought provision applies only to mortgages created after the December 1st commencement date of the 2009 Act. The faulty 2009 Act had accidentally repealed a section allowing banks to seize properties and appoint Receivers, and Judge Dunne, now a Supreme Court Judge, had held it was not for the High Court to supply the omission of the Oireachtas.

Judge O’Malley stated today that Judge Dunne had decided that by virtue of repeal provisions in the faulty 2009 Act a lender who had not acquired a right to apply to court for possession before its December 1st commencement date could not apply thereafter.

Barrister Ross Maguire, SC, who appeared with Nollaig Lane for Frankie and Joseph Sheehan and their company MyMortgages Limited, had asked Judge O'Malley to follow her colleague Judge Dunne's finding because certain arguments had not been put before her.

The receiver, Michael McAteer, had sought reliefs including an order restraining the borrowers from interfering with him in the exercise of his functions. Judge O'Malley, in her reserved judgment, said each of the mortgage deeds executed in respect of specified registered properties in Co Cork and Co Wicklow contained identical terms providing for the appointment of a receiver by the bank in the event the mortgage fell into arrears.

She said on dates after 1st December 2009 the Sheahan’s had defaulted in making the payments required under terms of the loan contracts and the whole of the monies due on each of the accounts was demanded in November 2011.

The loans were not repaid and on November 6, 2012 the bank had demanded possession. The property had not been given up and the bank now sought an order for possession.

Michael Mc Dowell SC and Ronan Murphy SC, who appeared with Ms Una Tighe, for Bank of Ireland Mortgage Bank and its receiver, sought time for all of the parties to consider the judgment.

Judge O’Malley made no specific orders today and adjourned the proceedings for mention on October 7 next.