Repossessions Update: Bank Of Ireland -v- Adrian Blanc And Lucille Blanc

As the tracker mortgage review continues to develop, it is becoming increasingly common for defendants in summary judgment and/or repossession proceedings to allege that the loan the subject of the proceedings is impacted by the tracker mortgage investigation, that this caused the defendants to fall into arrears on the loan and accordingly, that the relevant financial institution should not be entitled to judgment and/or possession of the underlying security. In essence, a tracker mortgage is “a type of home loan where the interest rate charged on the loan tracks that of another publicly available rate, typically the interest rate set by the European Central Bank”1 (“ECB”). One aspect of tracker mortgages was considered by the High Court in the context of repossession proceedings in a recent ex tempore decision of Ms. Justice O'Regan in the matter of Bank of Ireland -v- Adrian Blanc and Lucille Blanc2.

Facts

The case involved an appeal by the Defendants of a Circuit Court Order for Possession made in favour of Bank of Ireland (BOI) in April 2019 in respect of the Defendants' family home in Foxrock. In September 2014, BOI acquired the loan and the mortgage the subject of the proceedings from ICS Building Society (ICS), following a transfer of a portion of the business of ICS to BOI. The original advance to the Defendants was in or around 2008 in the amount of1.7m for a term of 15 years, with interest only payable during the first three years. However, arrears first began to accumulate in July 2010. The Defendants appeal was based on a number of grounds, 3 however the main assertion related to the impact of the change in the ECB lending rate to banks from a minimum bid rate to a fixed rate4. In particular, the Defendants contended that due to thesedramatic changes, the applicable interest rate mentioned in the letter of loan offer (being the minimum bid rate) was essentially reduced to nil, as that rate was allegedly abandoned in favour of a fixed rate. In particular, the letter of loan offer provided that the interest rate applicable to the loan was a variable interest rate which is to be no more than 0.65% above the ECB main refinancing operations minimum bid rate. It was further provided that if, for whatever reason, that rate was unavailable, a certification to that effect was required in order for the loan to be repayable with interest accumulating on the prevailing home loan variable rate. The Defendants asserted that no such...