Court rulings delay cases to repossess homes

Thousands of home repossession cases face “considerable delays” following conflicting High Court judgments on the power of the Circuit Court to hear repossession applications by banks.

In May, Mrs Justice Deirdre Murphy ruled the Circuit Court did not have jurisdiction to hear a case in which Bank of Ireland Mortgage Bank sought to repossess the home of a Cavan couple, Laura Finnegan and Christopher Ward.

However, in a judgment delivered on November 26th, Mr Justice Seamus Noonan ruled the Circuit Court had the authority to hear a similar case, when he upheld an order granted to Bank of Ireland Mortgage Bank to repossess a buy-to-let property in Tuam, Co Galway, held by two men, Shane Hanley and Alan Giblin.

Struck out

Legal sources have said a significant number of repossession cases have either been adjourned since the May judgment while lenders reassess their options, or were struck out as lenders went back to square one to reissue proceedings.

One barrister said the conflicting judgments were “causing additional delays for borrowers” and “further distress to already distressed borrowers.”

In both legal cases, the mortgage-holders argued their dwellings fell outside the Circuit Court’s jurisdiction due to a series of legislative changes since 1978 when domestic rates were abolished.

Between 1978 and 2001 all domestic dwellings in Ireland were considered “rateable”, even though rates were not paid on them.

The Valuation Act 2001, however, excluded “any domestic premises” from rating.

Domestic properties built since the legislation came into effect in 2002 were neither rated, nor rateable. So, while homes built in the 1980s and 1990s were rateable, those built after January 2002 were not.

In an effort to address this gap in the law, the Land and Conveyancing Law Reform Act was introduced, which gave a new power to the Circuit Court in disputes over housing loans entered into after December 1st, 2009.

However, the legislation brought in by Michael McDowell during his time as minister for justice extended the Circuit Court’s jurisdiction to loans created before December 2009, but it was not applicable to court cases initiated before July 31st, 2013.

The May and November cases heard by Mrs Justice Murphy and Mr Justice Noonan both concerned the jurisdiction of the Circuit Court to hear home repossession cases where the dwelling is not “rateable”.

Expressing concern at the situation, one lawyer said the judgments had “brought a huge lack of clarity”.