The High Court has refused ACC Bank an order for possession of Temple House and about 14.5 adjoining acres in County Westmeath, finding that the bank had not established a right to seek possession under a statutory provision before it was repealed in December 2009.
Ms Justice Finlay Geoghegan delivered the judgment on 23 July 2013. The case concerned ACC’s application under section 62(7) of the Registration of Title Act 1964. The judge said the decision did not affect ACC’s status as registered owner of a charge over the folio containing the property.
The property was registered to Declan and Bernadette Fagan, who were adjudicated bankrupt in May 2012. The bank’s charge, dated 19 November 2004, was registered in 2006. It secured money owed by Temple Spa Limited, for which the Fagans had guaranteed the company’s liabilities. The judgment also records a €250,000 home loan to the couple in 2007.
The Fagans were allowed to oppose possession only on the question of whether ACC was entitled to possession, taking the registered charge as valid. Because they were bankrupt, the judge ruled they could not challenge the charge’s validity: ownership of the folio had vested in the Official Assignee. The Official Assignee had decided not to challenge the security and did not appear at the hearing.
Section 62(7) was repealed with effect from 1 December 2009. The court considered whether ACC had acquired a right to seek possession under that section before the repeal. It had to establish that it was the registered charge owner, that the secured principal had become due by that date, and that the power of sale had arisen and was exercisable under the charge.
ACC produced letters showing that company loan accounts were in arrears in September 2009. But the judge noted that the letters did not demand repayment, and it was common ground that no repayment demand had been made before 1 December 2009. Under the charge, the company and the guarantors had covenanted to pay the outstanding sums on demand. Although missed payments were an event of default, the charge did not require payment of the full balance without a demand.
The judge also found that the statutory power of sale had not arisen. She concluded that ACC was not entitled to possession under section 62(7). The court did not decide the Fagans’ submission that the bank had breached mortgage-arrears conduct requirements, as that issue was unnecessary to the outcome.