The High Court dismissed a challenge by William Moran, Sheila Moran and Michael Moran to the appointment of a receiver over 24 mortgages, holding that the receiver had been validly appointed under the terms of the mortgages.
Mr Justice Brian J. McGovern delivered judgment on 27 July 2012. The mortgages comprised 15 with AIB Mortgage Bank and nine with Allied Irish Banks plc. Both banks appointed Jim Luby as receiver under separate deeds of appointment.
The plaintiffs argued that the mortgages incorporated the Conveyancing Acts, including the Conveyancing Act 1881, as amended or modified by later legislation. They said the relevant provisions of the 1881 Act had been repealed from 1 December 2009 by the Land and Conveyancing Law Reform Act 2009, and that the receiver could therefore be appointed only under the 2009 Act’s provisions. They contended that the statutory notice requirements had not been met.
The court noted that all 24 mortgages predated the 2009 Act’s commencement. Under their terms, the secured money was deemed due when each mortgage was executed, and the restrictions on the power of sale under section 20 of the 1881 Act were excluded. The court said the right to appoint a receiver had therefore accrued before the 2009 Act took effect.
The plaintiffs also relied on a repayment demand sent by the second defendant on 2 December 2011. They argued that, even if notice was received that day or the following day, the three-month period in section 108 of the 2009 Act meant a right to appoint a receiver could not have accrued before 3 March 2012. The receiver had been appointed on 2 March 2011.
The judge accepted the reasoning in an earlier High Court decision, Kavanagh v Lynch, that repeal of provisions of the 1881 Act did not alter rights and powers incorporated into mortgages created while that Act was in force. He also concluded that section 96 of the 2009 Act limited the relevant statutory powers to mortgages created by deed after the commencement of Chapter 3, on 1 December 2009. The plaintiffs’ mortgages were outside that scope.
The court held that references to amending legislation in the mortgage terms meant legislation in force when the contracts were made. It concluded that the receiver was validly appointed and that there was no valid basis to challenge the appointment. The plaintiffs’ claim was dismissed.