The End Of The Start Mortgages Issue?

Introduction

In a move that should be welcomed by mortgage lenders and other interested parties, such as purchasers of loans, structured credit or other assets backed by Irish real estate, the Minister for Justice, Equality and Defence, Alan Shatter T.D. published the Land and Conveyancing Law Reform Bill 2013 (the "Bill") on 28th March, 20131. The primary purpose of the Bill is to address the uncertainty arising from the interpretation by the High Court of the changes to the law brought about by the Land and Conveyancing Law Reform Act 2009 (the "2009 Act"). In addition, the Bill also proposes the adjournment of repossession proceedings in respect of a borrower's principal private residence where these could be resolved under the Personal Insolvency Act 2012.

Background

The background to the Bill involves the well-known Start Mortgages2 decision, which found that the repeal by the 2009 Act of certain provisions of the Registration of Title Act 1964 (the "1964 Act") had the unintended consequence of restricting mortgagees from exercising their right to repossession on a summary basis (i.e. using an expedited, simplified procedure).

Prior to the enactment of the 2009 Act, a mortgagee could apply to Court pursuant to the 1964 Act for an order for possession of land over which it had a registered charge, as soon as payment under that charge became due. However, in the Start Mortgages decision, the High Court held that, as the 2009 Act had repealed section 62(7) of the 1964 Act, mortgagees of registered property could not apply for summary judgment unless the principal amount secured under the relevant charge became due prior to 1st December, 2009 (being the commencement date of the 2009 Act).

The High Court found that unless the monies secured under the relevant charge had become due and owing prior to 1st December, 2009, the mortgagee's right to obtain possession by summary proceedings had not been "acquired" nor had it "accrued" prior to the repeal of the 1964 Act by the 2009 Act. This meant that in the Start Mortgages decision, section 62(7) of the 1964 Act was not saved from repeal by the Interpretation Act 20053, which provides that where an enactment is repealed, the repeal does not affect "any right, privilege, obligation or liability acquired, accrued or incurred under the enactment."

Uncertainty

Understandably, the Start Mortgages decision created much uncertainty and presented a substantial headache for mortgagees who sought to...