The High Court has allowed Ulster Bank Ireland Limited’s appeal after the Circuit Court refused its application for possession of a property in Clondalkin, Dublin 22.
President of the High Court Kearns ruled on 21 February 2014 that the mortgage terms made the full debt payable when the borrowers defaulted on a periodic payment for a month or more. Because the default occurred before 1 December 2009, the bank could seek possession under section 62(7) of the Registration of Title Act 1964. The judgment allows the appeal; it does not state that the High Court itself made an order for possession.
First Active plc offered Gary McDonnell and Sabrina McDonnell a €236,000 loan in October 2006, which they accepted in March 2007. The loan was secured against property at 63 Lealand Avenue, Clondalkin. A charge over the lands was granted in April 2007 and registered in June that year. First Active’s business and assets were transferred to Ulster Bank in October 2008, making the bank its successor in title.
The judgment says the respondents failed to make payments under the loan, including a payment of €1,039.54 due on 15 October 2009. That default continued for more than a month.
The Circuit Court refused possession in May 2012. It considered itself bound by the High Court’s 2011 decision in Start Mortgages v Gunn and concluded that, because no demand for repayment of the full principal and interest had been made before 1 December 2009, the bank could not rely on section 62(7).
On appeal, Ulster Bank argued that its mortgage made the entire debt due automatically after a qualifying default, without a demand. No respondent appeared at the appeal hearing.
Kearns distinguished the mortgage from the one considered in Start Mortgages. Paragraph 8(a) said the “Total Debt” became immediately payable if a borrower defaulted on one periodic payment, or another payment, for a period of one month. The court also referred to earlier decisions in EBS v Gillespie and Ulster Bank v Carroll, where mortgage terms provided for debt to become due upon default without a further demand.
The court concluded that this mortgage likewise required no demand. It held that the pre-December 2009 default entitled the bank to seek possession under the former statutory provision and allowed the appeal.