The High Court has ruled that Allied Irish Banks plc can seek possession of mortgaged property without giving notice under residential tenancy law to a woman claiming rights under a long-term lease.
In a judgment delivered on 22 March 2021, Mr Justice Garrett Simons concluded that the lease made between Richard Finbarr FitzGerald and Eileen Daly was void against the bank. He said the mortgage required the borrower to obtain the bank’s written consent before granting a lease, and there was no evidence that consent had been given or that the bank had accepted the lease. The burden of proving consent rested with Ms Daly, the judge said.
The ruling followed an earlier judgment, delivered on 27 April 2020, which found the bank entitled to possession, subject to a stay on execution. Ms Daly was later given an opportunity to make submissions on whether the lease could be relied on against the bank, and asked the court to revisit its earlier decision.
Ms Daly argued that the Residential Tenancies Act 2004 protected her as a tenant and required the bank to serve a notice of termination, with a notice period she said would be at least 244 days. The bank argued that the lease was granted in breach of the mortgage and did not bind it.
The judge held that the tenancy could bind Mr FitzGerald as the borrower and landlord, while remaining void against the bank as mortgagee. Because the bank was not party to the lease and had no right to collect its rent, the judge found there was no landlord-and-tenant relationship between the bank and Ms Daly. The residential tenancy provisions on termination therefore did not require the bank to serve notice before pursuing possession.
The lease was for 35 years from 3 April 2002. It provided for rent of €800 a month, to be set off against a sum of €800,000 said to be owed by the borrower to Ms Daly; the judgment records that no cash rent was paid. The judge also found no evidence that Ms Daly had lived at the property in recent years, or that she met the Act’s occupation requirement for the protections she claimed. The dwelling was said to have been occupied by sub-tenants and, most recently, under a caretaker agreement, but the latter had not been confirmed by affidavit.
The court said its conclusion was provisional on the remaining issues. Given the time since the earlier judgment and the apparent caretaker arrangement, the judge’s provisional view was that no further stay was necessary. He directed that the parties be heard on a further stay and costs on 26 March 2021. No final order on those issues had been made in this judgment.