A recent ruling of Justice Dunne in the High Court on separate applications for possession made by Start Mortgages Limited, Secured Property Loans Limited and G.E. Capital Woodchester Homeloans Limited has cast doubt over the ability of mortgage holders to enforce rights under legislation repealed by the Land and Conveyancing Law Reform Act 2009. The decision indicates that such rights may only be relied upon where they had vested in mortgage holders prior to 1 December 2009. Therefore, any right which is dependent on the secured money becoming due would not have vested in mortgage holders unless payment had become due and demand for repayment made prior to 1 December 2009.
Mortgages granted prior to 1 December 2009 are governed by earlier legislation which has been repealed by the 2009 Act. It had been understood that the rights conferred on mortgage holders by the repealed legislation continued to apply by virtue of section 27 of the Interpretation Act 2005.
The statutory right at issue in the cases before Justice Dunne comprised the right to seek possession of registered land under section 62(7) of the Registration of Title Act, 1964 (which had been repealed by the 2009 Act). This provision comprised the lenders sole right to possession of the secured properties because there is no other legal entitlement to possession under a charge over registered land.
Justice Dunne carefully examined the provisions of section 67(2) which states that "when the repayment of the principal money secured....has become due...the court may....order possession" and the provisions of section 27 of the Interpretation Act which refers to statutory rights which have "accrued". Justice Dunne determined that the rights under section 67(2) survived repeal by the 2009 Act but only insofar as such rights had vested in the lenders prior to 1 December 2009. In her view, "accrued" in section 27 meant vested and therefore this required that under section 62(7) both (i) the money must have become due; and (ii) demand for repayment must have been made prior to 1 December 2009.
The analysis in this decision would also be applicable to the interpretation of other provisions of legislation repealed by the 2009 Act where they are expressed to become exercisable "when the mortgage money has become due", such as the right to appoint a receiver and the power of sale under the Conveyancing Act, 1881.
It is not clear from the decision handed down by Justice Dunne, to what extent all of the terms of the mortgages were presented to her for the purposes of considering whether the secured monies had legally become due earlier than the date of demand for repayment. This is important because the issue of whether or not payment has become due may be determined by the terms of the mortgage, some of which may contain an early legal repayment date, for example "the Debt owning to the Lender (whether demanded or not) shall be deemed to become due within the meaning and for all the purposes of the Conveyancing Acts on the execution of this Mortgage". Where such provisions are included and are deemed to take effect prior to 1 December 2009, a lender should be able to establish that the secured monies had become due and therefore any relevant statutory rights under the repealed legislation have vested in that lender prior to 1 December 2009.
However there is one caveat to the foregoing - the Judge did hold that it was also necessary for a formal demand for repayment to be made prior to 1 December 2009 before the lender could apply for the statutory relief sought. There must be a question mark over this, as the question of whether or not a demand is required before money becomes due is a matter for the mortgage conditions and there is no requirement under the terms of the relevant statutory provision for a formal demand for repayment to have been made. This decision may also conflict with an earlier judgment of Barron J in First Southern Bank Limited v Maher .
The statutory rights under the repealed legislation would generally only comprise some of the rights enjoyed by mortgage holders. The mortgage is the key document which contains the contractual rights of a mortgage holder. In addition there may be other legal rights which exist as a matter of law. Therefore even in the absence of relevant statutory rights there may be alterative remedies available to a mortgage holder.
In the wake of this decision, click here to see an illustration of the steps to be taken in analysing the entitlement of mortgage holders to relevant remedies in respect of mortgages granted prior to 1 December 2009. In the meantime and pending the outcome of any Supreme Court appeal that might be taken, mortgage holders who were reliant on their statutory rights will have to wait and see if any legislation is brought forward to restore them.