The High Court allowed Pepper Finance Corporation (Ireland) DAC’s appeal in a possession case involving a Kildare family home, ruling that the lender did not have to join Windmill Funding Ltd. to the proceedings or identify itself as Windmill’s trustee.
The appeal followed the Circuit Court’s dismissal of Pepper’s claim. The High Court’s ruling addressed the defendants’ remaining legal objection to how the case was brought; it did not determine any other defence grounds, which had been abandoned, or specify a separate possession order in the judgment’s concluding paragraph.
Byron and Adrienne Jenkins did not dispute the key loan and mortgage facts. They borrowed €350,000 from GE Capital Woodchester Home Loans Ltd in 2008, secured by a mortgage over the property. Repayments fell into arrears from November 2008. The judgment recorded arrears of €326,749.22 and a total loan balance of €599,698.37 as of 29 June 2017.
GE was sold to Pepper Netherlands Holding Cooperatie U.A. in 2012 and changed its name to Pepper Finance Corporation (Ireland) Ltd. The High Court noted that the correspondence notifying the defendants about the sale of the lender and its name change did not say that their individual loan had been sold.
Under a mortgage sale deed, Pepper transferred the beneficial interest in the defendants’ loan and related security to Windmill. Pepper retained legal title as bare trustee pending perfection of the transaction. The court also noted that the defendants had consented to securitisation in their loan documents and that they had not been given notice of the assignment.
The defendants’ counsel accepted that Pepper retained legal title but argued that Windmill, as beneficial owner, had to join the case, or that Pepper had to disclose its trustee status. They said this was needed to identify who could receive repayment and issue a discharge, and to protect against a risk of being sued twice. Pepper argued that it remained entitled to enforce the security while legal title remained with it.
Mr Justice Binchy said earlier Irish decisions confirmed that a lender could enforce security after securitisation but had not resolved this specific question about how proceedings should be framed. He concluded that, because the defendants had not been notified of the assignment, they remained obliged to make repayments to Pepper, and Windmill could not claim directly against them while the assignment remained equitable. In those circumstances, the risk of multiple claims was, in the court’s view, more apparent than real.
The court held that Pepper was not required to join Windmill or declare its trustee status. It allowed the appeal, leaving Pepper entitled to succeed in the proceedings.