A High Court possession claim concerning a residential investment property in Dún Laoghaire has been sent to a full hearing after the late borrower's estate raised an arguable limitation defence.
Mars Capital Finance Ireland DAC and receiver Hilary Larkin sought possession of the property, which remains registered in the name of Robert Gallagher, who died in December 2014. His daughters Leonie Gallagher and Michelle Gallagher are sued as joint administrators of his estate.
The underlying loan began in 2007 when Irish Life & Permanent advanced €428,820 to assist Gallagher in purchasing the property. It was secured by a mortgage. The parties agreed that Gallagher first defaulted in September 2011, which at that point entitled the lender to seek possession.
The central issue is whether that cause of action was still alive when Gallagher died.
The plaintiffs relied on mortgage restructuring arrangements beginning in June 2013. They said arrears of €43,423.81 were capitalised, new repayments were agreed and Gallagher complied with the revised arrangements until his death, with the next payment default occurring afterwards.
The administrators argued that the earlier default remained legally relevant. They relied in particular on a mortgage clause providing that a concession could become void following a subsequent default. If a cause of action was already subsisting when Gallagher died, section 9(2) of the Civil Liability Act 1961 could require proceedings to have been brought within two years of his death.
Mr Justice Mulcahy held that the administrators' interpretation was at least arguable and could not properly be resolved in summary proceedings.
Mars also argued that a January 2015 letter from Michelle Gallagher acknowledging that her father had a Permanent TSB loan restarted the limitation period. The judge found several unresolved issues with that argument, including whether the letter amounted to an acknowledgement at all and whether she had legal capacity at that time to bind the estate.
The court therefore refused to determine possession summarily and adjourned the case to plenary hearing, where evidence and legal arguments can be examined in full.