In the High Court case of Tanager DAC V Rolf Kane , Mr Justice Noonan suggested referring questions regarding repossession orders to the Court of Appeal. The matter at issue was whether a chargeholder which was entitled to be registered in the Land Registry as owner of the charge, but was not in fact yet so registered, could validly transfer title to the charge.
The Defendant granted a charge over its registered property to Bank of Scotland (Ireland) Limited (BOSI) and BOSI registered its ownership of the charge.
Pursuant to the European Communities (Cross Border Mergers) Regulations 2008, assets and liabilities of BOSI transferred to Bank of Scotland plc (BOS). These assets and liabilities included the Defendant's charge. BOSI was then dissolved without going into liquidation.
BOS subsequently sold a number of its own loan portfolios to the Plaintiff which included the Defendant's charge. At the time of the loan sale, BOS had not registered its ownership of the charge on the folio of the property. Following its loan acquisition, the Plaintiff did register its ownership of the charge in the Land Registry and, when the Defendant fell into arrears it sought an order for possession but such application was dismissed by order of the Circuit Court.
As BOS had never registered its ownership of the charge at the time of the loan sale to the Plaintiff the Defendant argued that the Plaintiff was not entitled to transfer the charge and therefore the Plaintiff never acquired title to the charge in the first place.
In its argument, the Plaintiff referred to Section 31 Registration of Title Act 1964 (the "1964 Act") which provides:
"The register shall be conclusive evidence of the title of the owner to the land as appearing on the register".
The Plaintiff argued that given Section 31, it is not open to the Defendant to challenge its title.
Both parties also referred to Kavanagh v McLaughlin  3 I.R. 555 whereby a charge had been transferred to BOS by operation of law under the Cross Border Merger Regulations but BOS had not registered its ownership of the charge. It was held that BOS was entitled to exercise its contractual rights under the charge but could not exercise its statutory rights unless and until it became the registered owner of the charge.
A similar issue arose here. BOS purported to transfer the charge to the Plaintiff using Land Registry Form 56 which is concerned with transfers by the registered owner of the charge as per Section 64(1) of the 1964 Act. Yet BOS had never registered its ownership of the charge thereby calling into question whether the Plaintiff had in fact possessed title to the charge at all.
On giving his interim ruling Justice Noonan stated that the fundamental issue was whether BOS as the unregistered owner of the charge was entitled to transfer that charge without itself first becoming registered. He accepted that whilst Section 31 of the 1964 Act provides that the register is conclusive, it nevertheless preserves the jurisdiction of the court to rectify the register in cases of actual fraud or mistake. However, he held that an order of rectification could not be made in the absence of the Property Registration Authority as a party to the proceedings.
Nevertheless, Justice Noonan recognised that as this case is concerned with the possession of a family home, there may be potentially more cases of similar circumstance and as such there is an element of public interest which has a bearing on the court's decision. There may be hundreds of other cases which will be directly affected by this one and so, not surprisingly, Judge Noonan considered it appropriate that a case be stated for the opinion of the Court of Appeal noting there was clearly an issue of "considerable public importance".
Accordingly, Judge Noonan has suggested that the questions referred to the Court of Appeal might include the following:
- Is the Court entitled to consider the circumstances in which the Plaintiff became the registered owner of the charge?
- Is it open to the Defendant to argue that those circumstances amounted to a mistake within the meaning of Section 31 of the 1964 Act?
- If the answer to both of the above is in the affirmative, is it open to the Court to join the PRA as a notice party for the purpose of hearing further argument from it on this issue?
- If the above are all answered in the affirmative, what consequences flow from a determination by this court that the PRA was not entitled to register the Plaintiff as owner of the registered charge?
The case is now listed for hearing before the Court of Appeal on Wednesday 16 May 2018. The outcome of the hearing will clarify the law in this area and will have a bearing on hundreds of repossession cases including another appeal from Tanager against a similar Circuit Court decision.