The two primary routes of enforcement under a mortgage are to either appoint a receiver over the lands or to apply to the Courts for an order for possession. The approach taken will depend on the powers contained in the mortgage, the situation on the ground and who is in occupation.
Court Proceedings vs. Receiver
The option to go to Court to seek an order for possession will usually only be used where the borrower resides on the lands and the value of the land dictates where proceedings will be issued. Simply put, if the land is worth less than €3m the proceedings should be issued in the Circuit Court.
Otherwise it will usually be open to a charge holder to appoint a receiver as this should be the quicker and least expensive route to the ultimate sale of the lands.
The primary difficulties that receivers face are borrowers who refuse to co-operate and may even interfere with the receiver and third parties farming/occupying the land. In either situation, a receiver may need to apply to the Court for interlocutory reliefs restraining the parties from interfering with the orderly running of the receivership process.
What is physically on the land may pose further challenges. Buildings or houses may exist on the lands which the charge holder was not aware of and machinery may also be present. Buildings will likely be captured by the mortgage, but this is not always the case with machinery or stock. These items will need to be returned to the borrower or else disposed of if not claimed.
The presence of animals and livestock is a regular concern. A mortgage will not extend to the animals which should ideally be removed by the party who owns them. However, that party may refuse to do so and it will then fall on the receiver or charge holder to deal with the animals. These steps can be complicated, time consuming and costly.
Such matters often end up coming before the Courts. In Carlisle Mortgages Ltd -v- Costello, Mr. Costello was committed to prison for failing to comply with Court Orders. It is notable that the initial order was made in November 2006 and the dispute was still ongoing 12 years later. In Smith -v- ACC Loan Management Ltd & orsand Smith -v- Ireland & anor, the dispute dates back to 2012 while these judgments were handed down in July and October 2017. The Judge in the High Court concluded it necessary to make orders restricting Mrs. Smith’s right to issue legal proceedings (Isaac Wunder Order) and also disqualify her advisor from assisting her as a McKenzie Friend. Neither orders are lightly made.
In summary, it should be borne in mind that enforcement by a charge holder over farmland can at times be slow and may present difficult and unique challenges. However, just because the land is used for farming does not change the legal principles behind enforcement.