The Court of Appeal has dismissed an appeal by a notice party in a dispute over a mortgaged dwelling, affirming a High Court order in favour of a receiver appointed by MARS Capital Ireland Limited. The appeal concerned an interlocutory injunction application; the Court of Appeal said the receiver had shown a “strong case” likely to succeed at trial, not that the underlying dispute had been finally determined.
The judgment, delivered by Mr Justice Maurice Collins on 22 October 2020, records that the mortgage dated from August 2004 and contained a covenant barring the mortgagor from letting the property without the mortgagee’s prior written consent. The judgment said no such consent from Irish Nationwide Building Society or its successors had been suggested. Under the principle in an earlier High Court decision, a letting made in breach of such a restriction is generally not binding on the mortgagee.
The notice party argued that the Residential Tenancies Act 2004 required MARS or the receiver to serve a valid notice of termination before seeking possession. The Court of Appeal did not consider it necessary or appropriate to decide that question definitively at the interlocutory stage. Mr Justice Collins said the receiver had nevertheless established a strong case that he could take possession and deal with the property on MARS’s behalf, unaffected by the Act’s provisions on tenancy termination.
The court reasoned that the earlier legal principle concerns whether a letting by a mortgagor affects a mortgagee’s rights to the property as security, rather than how a landlord terminates a tenancy. It also said that principle does not generally create a landlord-and-tenant relationship between the mortgagee and the third party. The court considered it inherently implausible that the 2004 Act had silently displaced the principle.
The judgment noted that later legislation, the Land and Conveyancing Law Reform Act 2009, changed the rules for some leases of mortgaged land. But its leasing provisions applied only to mortgages created after 1 December 2009, so they did not apply to this mortgage.
The judgment also refers to the notice party’s correspondence with the receiver and her rejection of an invitation to pay rent to him. The terms of the purported letting were not disclosed in the proceedings. The court agreed with the reasons in a separate judgment by Ms Justice Ní Raifeartaigh and dismissed the appeal, affirming the High Court order. The judgment does not state the final outcome of the underlying possession dispute.