Two recent judgments have brought further clarity in relation to the rights acquirers of loan portfolios to enforce against borrowers:
- In Stapleford Finance Limited -v- Lavelle,1 the Court found that where the plaintiff is substituted in enforcement proceedings, the defendant is not entitled to defend the proceedings on the basis that new proceedings were deemed to come into existence on the date of the substitution and were therefore statute barred.
- In Ennis Property Finance Limited -v- Hynes & Anor.,2 the Plaintiff obtained judgment following a full plenary hearing. The judgment sets out a useful roadmap for further proceedings.
Stapleford Finance Limited -v- Lavelle
In Stapleford Finance Limited -v- Lavelle the Plaintiff was substituted as in place of Irish Bank Resolution Corporation Limited (“IBRC”) by a High Court order made on 4th June, 2015. That order was affirmed on appeal by the Court of Appeal on 11th April, 2016.
The Defendant contended that a new cause of action was deemed to commence on the date the substitution order was made and that he should be entitled to rely on that cause of action being statute barred.
The court found that on the transfer to the Plaintiff of the debt, the proceedings were capable of being continued by the person to whom it had been assigned and that there was no arguable defence in relation to the Statute of Limitations.
The court, relied, in part, on provisions of the Irish Bank Resolution Corporation Act 2009 which applies to IBRC only. However, it also considered persuasive English precedent of general application. Accordingly, this case appears likely to generally dispose of the ‘deemed new proceedings on assignment’ argument in future proceedings. It certainly does so in relation to assignments from IBRC.
Ennis -v- Hynes & Anor
Bank of Scotland (Ireland) Limited ("BOSI") granted a number of loans (the "Loans") to the Defendants.
Demands issued in January 2009 and a receiver was appointed in March 2009.
On 31 December 2010, BOSI merged into Bank of Scotland plc ("BOS") in a cross-border merger by absorption. The Court accepted that, as a consequence of the merger, the loans the subject matter of the proceedings became assets of BOS.
Further demands issued from BOS in March 2014 and proceedings were issued and remitted to plenary hearing.
The assignment of the loans
Evidence was given that:
- In January 2015, BOS entered into an agreement whereby it agreed to sell a portfolio of assets, including the Loans to Ennis Property Finance ("Ennis").
- The actual assignment of the loans took place by deed in November 2015.
- Ennis appointed Pepper Asset Servicing DAC to provide portfolio management services in respect of the Loans.
- Pepper wrote to the Defendants notifying them of the assignment.
Having considered the requirements for a valid legal assignment of debt set out in section 28(6) of the Supreme Court Judicature Act (Ireland) 1877, as set out inO'Rourke -v- Considine,3 the Court found that the legal and beneficial entitlement to the debt had effectively transferred to the Plaintiff.
Evidence of the debt
An officer of the BoS gave detailed evidence, which dealt with, amongst other things the requirements to avail of the exception to the hearsay rule pursuant to the Bankers’ Books Evidence Acts4 and provided a certificate of debt as of the date of assignment of the Loans (as permitted by the terms of the loan agreements).
Evidence was given by a senior manager in Pepper, which maintained the books and records of the Plaintiff in relation to the subsequent performance of the Loans.
Finally, evidence was given by a director of the Plaintiff.
The Court was satisfied with evidence presented and granted judgment.
While there is little new law in Hynes, because it sets out the evidence from the inception of the loan through its assignment, and to the ultimate balance, which was sufficient to persuade the Court to grant judgment, it provides a useful roadmap and template for evidence for future similar proceedings.