The High Court has refused Pepper Finance Corporation (Ireland) DAC leave to execute a 2010 possession order over a home in Cloonmaglaslia, Tuam, Co Galway, after finding that it had not sufficiently proved its entitlement to enforce the mortgage charge.
The decision was made on 3 December 2021 by Ms Justice Egan. Pepper had sought leave to execute the order more than six years after it was made, and separately sought leave to renew a possession order issued in April 2014. The court refused both requests. It listed the matter for mention on 16 December 2021 to address costs.
The dispute concerned a 2012 transaction in which the lender, then known as Woodchester, sold its mortgage loan book to Windmill Funding Ltd. The defendant argued that the transaction transferred the legal interest in his charge as well as the beneficial interest, leaving Pepper without the right to enforce it. Pepper said it had transferred only the beneficial interest and retained legal title.
The judge said company documents established that Woodchester, Pepper Ltd and Pepper DAC were the same legal entity despite changes to its name and legal status. Those changes did not, by themselves, prevent enforcement. But the court said Pepper had not produced the mortgage sale instrument or portfolio management agreement that could establish what rights it retained and whether those rights continued. The tax determination Pepper relied on described its retained legal interest as heavily qualified, conditional and for a finite period, subject to renewal. The court also noted that the folio extract was more than two years old and did not resolve the issue raised about later events.
The judge concluded that the defendant’s challenge to Pepper’s current ownership of the legal interest was fairly made. She declined to infer Pepper’s entitlement from the tax determination in the absence of the underlying transaction documents. The court did not decide that the defendant’s account of the sale was correct; it found the evidence Pepper presented insufficient to establish its entitlement to execute.
On the delay, the judge said Pepper had given a good reason for not enforcing the original order earlier. She accepted that the parties had tried repayment arrangements and discussed voluntary sale, surrender and a possible purchase by the defendant’s son. She said the defendant had identified no specific legal prejudice from the delay. However, because Pepper’s entitlement to execute had not been established, the court’s discretion to grant the first request was not engaged.
The 2014 possession order had expired, and the application to renew it came more than seven years after it was issued. The judge held that an application for a first renewal had to be made before the order expired, so it could not be renewed under Order 42, rule 20.