Landmark ruling may affect hundreds of repossession cases

Hundreds of homeowners face renewed threat of repossession following a landmark judgment by the Court of Appeal.

The three-judge court ruled unanimously that a man fighting repossession is not entitled to challenge the registration of a so-called vulture fund as the owner of a charge on his home.

Rolf Kane is one of more than 1,700 former mortgage customers of Bank of Scotland (Ireland) whose mortgages were transferred to a US fund called Tanager. Hundreds of these are understood to be potentially facing claims for repossession from Tanager.

Mr Kane argued that the charge on his family home in Clonsilla in Dublin was invalid because it came to Tanager via Bank of Scotland following its reintegration of Bank of Scotland Ireland (BOSI) but that, crucially, Bank of Scotland never formally registered title in its own name.

Mr Kane said that, because BOS never became registered as owner of the charge initially registered by BOSI on Mr Kane's home, it was not entitled to transfer or assign it to the fund. Tanager's registration as owner of the charge was a "mistake" by the Property Registration Authority, he claimed.

Register of titles

But the appeal court has ruled that the register of titles is “conclusive” evidence of ownership of a charge on a property and cannot be challenged.

“This is a serious judgment for many people,” said David Hall, the chief executive of the Irish Mortgage Holders Organisation, speaking after the judgement. “The whole system favours the vultures.”

The case had been referred to the Court of Appeal from the High Court during the hearing of Tanager's appeal of an earlier Circuit Court ruling refusing it a repossession order.

At the time he proposed the referral, Mr Justice Séamus Noonan said the issues could potentially directly affect hundreds of cases. In those circumstances, he said, he would like them to be determined by the Court of Appeal before he decides Tanager’s appeal.

The case arises from a March 2006 mortgage granted to Mr Kane by BOSI. After BOSI merged on December 31st, 2010 into BOS, BOS sold a portfolio of securities to Tanager, including Mr Kane’s mortgage.

Tanager became registered on April 25th, 2014 as the owner of the charge previously registered in favour of BOSI.

After alleging Mr Kane had fallen into arrears on mortgage repayments, the fund moved in early 2015 for repossession of his home.

Public interest

Giving the Court of Appeal judgment, Ms Justice Marie Baker said the public interest in having the issues decided "cannot be denied" as there were some 1,768 registrations of onward transfers of former BOSI charges where BOS was not previously registered as owner. Most involve Tanager.

The court’s decision is also important for the general practice of the Property Registration Authority, she added.

Ms Justice Baker said the case essentially concerned the interplay between Section 64 and Section 90 of the Registration of Title Act 1964. Section 64 deals with the means by which title to a registered charge may be assured. Section 90 confers powers on a person, on whom the right to be registered as owner of a charge has passed in prescribed circumstances, to assure or charge that interest before registration of their title has been completed.

She also ruled the Property Registration Authority could not be joined to the case for the purpose of hearing further argument from it about entering Tanager as owner of the charge.

It was not open to Mr Kane to argue that the circumstances in which Tanager became owner of the registered charge amounted to a “mistake” within the meaning of the 1964 Act, she held.

The Court of Appeal findings will now be considered at the resumed hearing of Tanager’s appeal on a date to be fixed.