Introduction
Practitioners and lending institutions experienced in mortgage litigation will no doubt be familiar with the differing requirements of the various Judges and County Registrars throughout the country over the last number of years when dealing with applications for possession of properties on foot of a mortgage.
Calls for a set of standardised guidelines have finally been answered by the recent introduction of the Circuit Court Rules (Actions for Possession and Well Charging Relief) 2015 (‘the Rules’) and the accompanying Circuit Court Practice Direction Number 17 (‘CC17’). Whilst such a move may initially be welcomed by practitioners and lending institutions, a close inspection of the requirements under the new rules will reveal that the standard of proof to be met by Plaintiffs in actions for possession has been set at a level commensurate with the highest standards which have been applied by Judges and County Registrars to date.
Scope of the Rules
The Rules apply to proceedings where any of the following three reliefs are claimed:
(a) recovery of possession of any land on foot of a legal mortgage or charge;
(b) an order declaring the amount due on foot of a mortgage to be well charged on land;
(c) an order under Section 100(3) of the Land and Conveyancing Law Reform Act 2009 authorising the exercise by a mortgagee of a power of sale.
Civil Bill
The Rules set out a new precedent Civil Bill and replying affidavit indicating the information and supporting documentation that are required by the Court. A Civil Bill must include a Special Indorsement of Claim which “shall state specifically and with all necessary particulars the relief claimed and the grounds thereof.” Following the Special Indorsement, the specific grounds upon which jurisdiction are claimed must be set out and the various wordings of the different options are set out in full in the precedent Civil Bill.
Verifying affidavit
The verifying affidavit which is to be filed with the Civil Bill must aver to the truth of the contents of the Civil Bill. The other matters which are required to be set out in the affidavit are detailed in the precedent affidavit and include the following:
- Details of property – the property must be fully described and particularised and any relevant documents must be exhibited e.g. certified copy folio, together with a Certificate of Rateable Valuation if appropriate and confirmation as to whether the property is a family home or a shared home.
- Details of occupancy – confirmation must be given as to who is residing in the property and whether it is a principal dwelling. If the property is rented details of the tenancy must be set out and any written consent to the tenancy which may have been required, together with a copy of the lease should be exhibited.
- Details of security – full details of the security provided including the amount and nature of the security should be given and confirmation that any relevant consents were obtained. The deed of mortgage and any other relevant document should be exhibited.
- Details of loan agreement/advance – details of the loan and any additional advances should be given and a copy of the loan offers should be exhibited.
- Details of arrears or default – the arrears or act of default on which the Plaintiff relies should be fully particularised and all relevant correspondence in this regard should be exhibited together with an up to date statement of arrears.
- Regulatory codes – if any Central Bank code applied to the agreement at any material time this must be recited together with information necessary to enable the Court to evaluate whether the codes have been complied with. This will of course include the Code of Conduct on Mortgage Arrears (CCMA) however may include other relevant Codes such as the Consumer Protection Code.
- Any other relevant information. CC17 gives an example of where the name of the Plaintiff may have changed or the rights of the mortgagee have been transferred to a third party. In such cases proof of the change of name or the deed of transfer should be exhibited.
Establishing the Defendant’s whereabouts prior to issuing
CC17 states that before issuing proceedings, legal practitioners should make all reasonable efforts to ascertain the whereabouts of the Defendants. Indeed some County Registrars had already been refusing to grant orders for substituted service where it could not be shown that borrowers had in fact resided in the address stated at the time of issuing proceedings. Lending institutions should be advised to conduct up to date enquiries when deciding to institute proceedings and retain evidence of same for production to the Court if required at a later date.
Issuing Proceedings
The overall procedure generally remains the same with the verifying affidavit having to be filed with the Civil Bill at the time of issuing of proceedings. CC17, which in the main summarises the requirements of the Rules, requires that at the time of lodging proceedings in the Circuit Court for issuing, the solicitor for the Plaintiff must also file a certificate confirming that the requirements of CC17 have been complied with.
As before, the Civil Bill and verifying affidavit must be served not later than 21 days before the return date and a Defendant intending to defend the matter must enter an Appearance within 10 days of service on him of the Civil Bill. Helpfully, an Appearance has been inserted in duplicate in the precedent Civil Bill to assist the Defendant in this regard. A Defendant must then file a replying affidavit and serve a copy of same on the Plaintiff not later than 4 days before the return date.
Adjournments to allow the Defendant time to pay the arrears/come to an arrangement
Where proceedings are instituted under the Land and Conveyancing Law Reform Act 2009 seeking an order for possession and/or an order for sale, if it appears to the Court that the mortgage is likely to be able to pay any arrears within a reasonable period, an adjournment may be granted. The Rules provide that any application by the Defendant for such an adjournment must be grounded on an affidavit setting out his financial position and his proposals.
Whilst the Rules are silent on such adjournments in cases falling outside the 2009 Act, CC17 requires that if a Defendant in such cases does not contest the Plaintiff’s entitlement to the relief sought but merely requires time to pay off the mortgage or come to an arrangement, they must file an affidavit setting out their financial position and proposals. Whilst not a requirement of either the Rules or CC17 it is recommended that the Defendant be advised of these adjournment provisions.
Additional proofs that will be required
In addition to the Civil Bill and verifying affidavit, CC17 calls for the following proofs ¬¬as a minimum when applying for an order for possession
- Proof of service on the borrowers and all occupants over 18 years of age
- Certified copies of the letter to the Defendant as required by Circuit Court Practice Direction 11 and notification of any adjournment dates
Practitioners should of course assess each individual case for additional proofs that the Court may require having regard to the particular circumstances of the case.
Conclusion
The Rules and CC17 provide welcome clarity in the area. Whilst the new requirements may delay or hamper the enforcement of mortgages in some instances, the application of more stringent standards should provide some comfort to a lender that orders granted on foot of applications under the new regime will withstand a robust challenge by the borrower.
For further information on the Circuit Court Rules (Actions for Possession and Well-Charging Relief) 2015, please contact Claire Colfer.
