The High Court dismissed a solicitor’s appeal against a Circuit Court order granting ICS Building Society possession of a house in Howth, finding no basis to exercise its limited discretion in his favour under the mortgage-arrears code.
The appeal concerned an order made on 19 November 2012. Justice Iseult O’Malley delivered judgment on 2 May 2014. The court held that the property had originally been bought as a residential investment, not as the borrower’s home. He said he took up residence there in June 2012, after ICS had begun possession proceedings.
ICS had lent him €450,000 in 2006. The loan was intended in part to clear an existing First Active mortgage on the Howth property, but that mortgage was not discharged. The borrower fell into arrears from 2008. ICS demanded repayment of the full debt in October that year and vacant possession the following month, then issued its possession claim in October 2010.
The borrower argued that ICS had failed to comply with the 2010 Code of Conduct on Mortgage Arrears after learning that the property had become his home. He said the lender should have treated him as a co-operating borrower and allowed the code’s 12-month period before pursuing possession. He also maintained that ICS had agreed to wait for fees he expected from a defamation case. ICS denied making such an agreement.
The judge ruled that the code’s 12-month moratorium did not apply retrospectively to proceedings properly begun before the property became the borrower’s primary residence. After learning he lived there, ICS was required to maintain contact under provision 50. The court said the lender’s engagement could not be considered unreasonable or inadequate, noting that proceedings had not been advanced with undue haste and had been adjourned when the borrower committed to a repayment arrangement.
The judge also found the borrower had repeatedly failed to give ICS a full picture of his finances. The standard financial forms before the court were incomplete and lacked supporting documents. The court could not find the final form adequate based only on the borrower’s assertions about it.
The parties made competing payment proposals during the High Court hearing. The judge was uncertain whether those offers properly formed part of the code process, but said that if they did, ICS was entitled to reject the borrower’s proposal. It would have required the lender to wait an uncertain period for the outcome of litigation and recovery of costs, with no interim payment offered.
The court concluded there was no basis to exercise its limited discretion for the borrower. The judgment therefore left the Circuit Court possession order in place; it did not itself make a new possession order.