The High Court dismissed GE Capital Woodchester Home Loans Limited’s claim for possession of a family home in Claregalway, finding that the lender had not made the demand required by the mortgage charge to make the full outstanding balance repayable.
The judgment, delivered by Ms Justice Laffoy on 22 August 2012, concerned a dwelling at 66 River Oaks, Claregalway, County Galway. The lender had brought proceedings under section 62(7) of the Registration of Title Act 1964, seeking possession from John Reade and Dympna Reade.
The defendants jointly borrowed €230,000 in 2006, secured against the property. By the time the lender’s grounding affidavit was sworn in April 2010, it said arrears were €56,141.91 and the total outstanding balance was €273,030.43. The first defendant did not appear. The second defendant contested the claim.
The central question was whether the principal secured money had become due in the way required by the statute and the terms of the charge. The judge found that a payment default had occurred, but said the lender still needed to demand payment of all money remaining unpaid before seeking possession under that provision.
A December 2009 letter asked the defendants to bring the account up to date. A February 2010 solicitors’ letter stated that the full balance had fallen due, but demanded vacant possession rather than repayment of that balance. The court found neither letter made the demand required by the charge. It also considered a lender’s record suggesting that letters were generated in April 2007, but found that the template letter, even if sent, would not have demanded payment of the full balance.
The second defendant also argued that she had signed the charge under her husband’s undue influence and without an opportunity to obtain independent legal advice. The judge said it was not necessary to decide that issue because the lender had not established the statutory basis for possession. She nevertheless observed that the loan had been advanced jointly to the defendants, who jointly owned the property, and that the offer documents disclosed nothing that would have put the lender on inquiry.
The order dismissed the possession claim against both defendants. It did not extinguish the debt or remove the charge from the property: the judge said the second defendant remained jointly and severally liable under the payment covenant, and the security remained over the home. The lender could pursue enforcement by a mortgage suit, subject to the charge’s terms.