Q&A: Why 1,700 loans could be affected by Court of Appeal ruling
Judges’ decision could see repossession of some homes speeded up
The Court of Appeal ruling could see the repossession of some homes speeded up, which could also mean homes that could not be sold because a cloud was hanging over the title deeds can now be sold. File photograph: Getty Images
The Court of Appeal has given the green light to a raft of repossessions this week, is that right?
No, but it did make a significant ruling in one particular case. However, it remains to be seen what impact it will have in a wider context.
What was that ruling?
All three judges of the court decided that a man fighting against the repossession of his Dublin home was not entitled to challenge the registration of a so-called vulture fund as the owner of a charge on his property.
Can you explain what that means?
It is pretty complicated but we’ll do our best. In March 2006, Rolf Kane was given a mortgage on a property in Clonsilla by Bank of Scotland Ireland (BOSI) . It then became registered as the owner of a charge on his family home. In 2010 BOSI – which had given out many tracker mortgages during the boom years and subsequently paid the price – was swallowed up by Bank of Scotland (BOS).
So it then owned the mortgage?
Yes, that bank then sold a portfolio of mortgages to a US vulture fund called Tanager. Among those loans was Mr Kane’s mortgage. In April 2014, Tanager was registered as the owner of the charge on Mr Kane’s home that was previously registered in favour of BOSI.
Okay. What happened next?
The vulture fund alleged Mr Kane had fallen into arrears on his mortgage repayments and in early 2015 it moved to repossess his home. Mr Kane disputed the repossession move on the basis that the bank had never registered itself as owner of the charge before it passed it on to Tanager. The Circuit Court refused to grant Tanager its repossession order on that basis.
Why did BOS not register itself as the owner of the charge?
Think of it like an administrative error – but a very big one.
But Mr Kane did borrow the money, right?
That is not in dispute.
So what happened next?
Tanager went to the High Court where Mr Justice Seamus Noonan suggested it would best be referred to the Court of Appeal on the basis that a ruling could potentially affect hundreds of other loans. Tanager made an appeal and argued that the register of titles was “conclusive” evidence of its title and Mr Kane could not challenge it.
And the Court of Appeal agreed?
Yes, and its findings will now be considered at the resumed hearing of Tanager’s appeal in the High Court on a date yet to be fixed.
So has the Court of Appeal corrected an error made by Bank of Scotland?
That is certainly a conclusion some have drawn since the ruling was made. Critics have pointed out that banks and the courts tend to be most unforgiving when individuals and small businesses make errors.
Does this have a broader impact?
Yes, there are about 1,700 loans that could be affected by the ruling. It could see the repossession of some homes speeded up by the clarity the court has given, which could also mean homes that could not be sold because a cloud was hanging over the title deeds can now be sold, which may help some people to move on.