The provisions of the Order and the Courts Act 2016 (Act) provide welcome clarity with regard to the jurisdiction of the Circuit Court, allowing litigants to take possession cases in the lower court and reducing costs.
Previous position
The Order, together with the Act, which was enacted on 28 December 2016, is intended to deal with the consequences of the Court of Appeal’s ruling of 28 July 2016 in Permanent TSB – v – Langan [2016] IECA 229. The previous position was that the jurisdiction of the Circuit Court in cases involving land was defined in several statutes on the basis of the rateable valuation of the property concerned. The issue that arose in Permanent TSB – v – Langan concerned the Circuit Court’s jurisdiction in cases in which the property concerned is not rateable under the terms of the Valuation Act 2001. The Court of Appeal ruled that where the property is not rateable under the 2001 Act, the Circuit Court has no jurisdiction to hear proceedings in relation to such property. The Court of Appeal decision (which has been appealed to the Supreme Court) raised concerns that a defendant could have possession proceedings struck out for lack of jurisdiction in certain circumstances.
New position
Now the Circuit Court’s jurisdiction will be determined by a property’s market value rather than its rateable valuation. Where the market value is less than €3 million, the Circuit Court will have jurisdiction. Otherwise, the proceedings will be heard in the High Court.
Market value
Under the new provisions, market value is defined as:
Presumption
The Act also provides that in proceedings initiated in the Circuit Court after its commencement, there will be a rebuttable presumption that the market value of the land concerned does not exceed €3 million. If this is disputed, the defendant/respondent may put forward evidence that the value of the property exceeds €3 million and argue that proceedings should be brought before the High Court rather than the Circuit Court.
Change to interest rate
Separately, the Courts Act 1981 (Interest on Judgment Debts) Order 2016, which was signed on 19 December 2016, reduced the rate of interest payable on judgment debts from 8% to 2%.