A recent appeal to the High Court quashed a Circuit Court order for possession granted under Section 62 (7) of the 1964 Registration of Title Act.
This outcome highlights the importance for Banks to ensure that all documentary evidence adduced in court proves indebtedness. Furthermore, where the validity of the mortgage or loan is challenged the evidence must address its validity.
The second named defendant, Ms Cody, appealed the original order for possession on the grounds that the mortgages which the bank was seeking to enforce had originally been made in her name without her consent or knowledge and were therefore invalid.
Facts
An order for possession of the family home in Wexford was made by the Circuit Court in February 2019. The appellant Ms Cody sought to have the order quashed on the grounds that the registered mortgage had been entered in her name without her knowledge or consent. Furthermore, she adduced several allegations against her husband and his legal practice including witnessed signatures without her presence and collusion with the Bank. The Bank held that according to the deeds the monies fell due in January 2016. Ms Cody alleged that as the mortgages were invalid the order should be quashed.
What did the Bank do wrong?
- A number of affidavits were adduced by the Bank, all of which referenced indebtedness by the defendants, but none addressed the issue of validity and due execution by Ms Cody;
- The Bank did not reply to any of Ms Cody's allegations nor did it explain any of the issues raised by Ms Cody, for instance why the deeds were in her maiden name;
- The Bank did not apply for cross examination of the appellant at Circuit Court level which meant that the factual dispute of indebtedness to the bank could not be resolved in the appeal.
Decision
As the Bank failed to discharge the onus of proof to allow the court to make an order for possession and did not prove that Ms Cody had in fact executed the loan, the appeal was allowed and the order for possession was quashed.
What can Banks learn from this case?
Banks should always be aware that when seeking an order for possession on foot of a deed or a debenture that in order to prove indebtedness they must be able to prove that the principal monies have fallen due as a matter of law. More specifically in this case, where it is contended that the deed is invalid, the evidence to be relied on must reply to the claimed invalidity and confirm due execution. Evidence regarding indebtedness is not enough to show that the mortgage or loan was valid. Furthermore, if there is a possibility that the validity of the mortgage or loan may be challenged the Bank should apply for cross examination of the mortgagor/debtor at Circuit Court level and prove indebtedness at that stage.
Bank of Ireland Mortgage Bank v Peter Cody and Heather Cody [2020] IEHC 99
