High Court judge says legal issues could affect hundreds of repossession cases

The issues, raised in an appeal by Tanager Designated Activity Company over being refused a repossession order for Rolf Kane's family home in Clonsilla, Dublin, concern the potential consequences of Bank of Scotland’s transfer of a charge on the property to Tanager when Bank of Scotland had not registered itself as the owner of the charge.

The issues could potentially directly affect hundreds of cases and he would like them to be determined by the Court of Appeal before he decides Tanager's appeal, Mr Justice Seamus Noonan said.

The core point is whether Bank of Scotland, as unregistered owner of a charge registered by Bank of Scotland Ireland on Mr Kane's home, was entitled to transfer that charge to Tanager without first itself becoming registered.

Other key issues are whether the Property Registration Authority was subsequently entitled to register the fund as registered owner of the charge, whether Mr Kane can challenge that registration and the consequences of any successful challenge by him.

Noting the High Court cannot of itself refer legal issues for determination by the Court of Appeal unless asked to do so by a party to a case, Mr Justice Noonan invited Tanager or Mr Kane, of Elmwood, Clonsilla, Dublin, to apply to him for a referral.

He issued the invitation today in an interim ruling on Tanager’s appeal and adjourned the matter to next month to allow the sides time to consider that.

The case arises from a March 2006 mortgage granted to Mr Kane by Bank of Scotland Ireland arising from which it became registered on March 21, 2006, as owner of the charge on the family home.

Bank of Scotland Ireland merged on December 31, 2010, into Bank of Scotland plc and Bank of Scotland later sold a portfolio of securities to Tanager, including Mr Kane’s mortgage. Tanager became registered on April 25, 2014, as the owner of the charge previously registered in favour of Bank of Scotland Ireland.

The fund alleged Mr Kane had fallen into arrears on mortgage repayments and in early 2015 moved for repossession of his home.

Mr Kane argued, because Bank of Scotland never became registered as owner of the charge, it was not entitled to transfer the charge to the fund, the fund never acquired title to the charge and was therefore not entitled to enforce it against him. He also argued the registration of the fund as owner of the charge was a mistake on the part of the PRA.

The fund argued the register of titles is “conclusive” evidence of its title and Mr Kane could not challenge its title.

After the Circuit Court refused a possession order, the fund appealed to the High Court.

In his interim ruling, Mr Justice Noonan said, following the Bank of Scotland Ireland / Bank of Scotland merger, Mr Kane’s charge transferred to Bank of Scotland by operation of law but Bank of Scotland Ireland was the registered owner of the charge on the folio. When the merger took effect, Bank of Scotland was the legal owner of a registered charge on Mr Kane’s folio that was not registered in Bank of Scotland's name.

Based on a 2015 Supreme Court decision Bank of Scotland was entitled to exercise all its contractual rights under the charge but not any statutory right under the Registration of Titles Act 1964 “unless and until it became registered as owner of the charge”.

Bank of Scotland was therefore not entitled to rely on the power provided for under the 1964 Act to transfer a registered charge as it was not registered as owner, he said.

Bank of Scotland purported to transfer this charge to the fund by using a Land Registry form which appears to relate to transfers by the registered owner or transfers by the person entitled to be registered as owner under Section 90 of the 1964 Act, but neither category applied to Bank of Scotland . The issue was whether Bank of Scotland was entitled to do that without first itself becoming registered.

Because Bank of Scotland's transfer of the charge to the fund, and the latter's registration of the charge, was all part of a "perhaps unprecedented" process affecting Mr Kane's interests, but in which he had no right to participate, issues arose whether Mr Kane was precluded from invoking the court's power to recify the register in proceedings where his family home "is at stake".

It is desirable all these issues should be decided by the Court of Appeal, the judge said.