Mortgages Flashcards
give a brief description of mortgages
They are rights you have over someone else’s land.
It is a form of security for debt over some sort of real property.
Mortgages are key for the housing market because without them many ppl wouldn’t be able to afford homes.
The rights and obligations in mortgages have to be very defined because they have a direct impact on the housing market.
Key defns
Mortgagor- borrower
mortgagee-lender
Mortgage- A security for debt over property
Mortgages of unregistered property pre 2009 Act
You could do this in three ways:
Conveyance of a fee-simple/freehold estate subject to redemption
Mortgage by demise- conveyance of a leasehold whilst retaining the freehold and lease ends when mortgage is paid off.
Mortgage of a leasehold- by assigning/subleasing subject to repayment
All of these involve the actual transferring of a legal estate to the mortgagee
Problems with this
Made it difficult to have more than one mortgage- difficult to leverage equitable value
High degree of artificiality insofar as the lender wouldn’t actually live /use the land conveyed to them.
Morgages of registered property pre-2009
What legislation
Section 62 of the regisration of title act
Allowed for a legal charge to be granted to the mortgagee t give them rights over the property without having to actually transfer the land.
Mortgages post-2009 Act
Legislation
Section 89 of LCLRA
Section 89 of LCLRA
89(1) mortgage of a legal estate must be created by deed
89(2) if created any other way it will not be a legal mortgage, only an equitable one.
No need for actual transfer of land
Aim of this was to unlock a suite of remedies for the mortaggee if the mortgagor defalts in payment or theres a breach
Equitable mortgages
How can they be carried out?
- mortgage of interest in property- if you have an interest in property u are deemed as the beneficiary of that trust and can create. a mortgage of it with a lender.
- Failure in formalities: When a contract for. a mortgage has been signed equity will anticipate the creation of an equitable mortgage.
- The handing over of the title deed with the intention of creating a mortgage
Equitable mortgages of registered land
State case
Handing over of the land certificate to the mortgagee.
AIB v Glynn- equitable mortgage of registered land can be made if the owner hands over the land certificate
Why did this need to be changed?
Only way to create an equitable mortgage was by:
Handing over of deed for unregistered
Handing over of land certificate for registered.
Both required the intention of creating a mortgage
State the case on intention for mortgage
Russell v Russell
Concerned a husband and wife and both of them had 50 per cent interewst in the property. The husband handed over title deeds to create a mortgage but the wife claimed thta she did not enter into mortgage cuz she did not have the intention and it was solely her husband
Held: equitable mortgage didnt exist for wifes interest
What leg amended this problem
Section 73 of the Registration of title and deeds act
Section 73 of the Registration of title and deeds act
Aimed to get more land on to the registry
Provided that no more land certificates be issued and all existing land certificates be valid for 3 years post-enactment
Rationale for this was that you dont need a piece of paper to tell u that ur the owner if ur already on the registry
What about equitable mortgages made through deposit of charge certificate pre-2006
State case
Promontoria Oyster v Hannan
Stated that any mortgages after enactment wouldnt have an issue because no land certificates would exist
Pre2006 act
s73 provided that the land certificate is to be valid for three years, so the mortgage has 3 years to be entered into the registry or else the security will be void.
NOTE: Section 73 does not apply to other creations of equitable mortagges like the deposit of title deeds.
Why do protections exist
For mortgagors to adress imbalance in bargaining power
NAme the first protection and expllain it
Unfair terms
Unfair terms and consumer contract regulations- aims to provide some oversight into the negotiations of mortgage terms to address the imbalance in bargaining power and prevent terms in the mortgage from being too harsh and unfair
What case concerns unfair terms
AIB v Counihan
Stated that when a mortgagor has entered into a contract and the terms are unfair, it is up to them to being up the unfair terms before a court. Very significant as if a term is deemed as unfair, it could make the whole mortgage void
Unfair terms and mortgage agreements
Mortgagor can assert unfair terms of a mortagge agreement.
The courts distinguish between the core terms and non-core terms
Core terms: interest rates
Core-terms can not be argued to be unfair
Unfair terms and mortgage agreements
State cases
Permanent TSB v Mallon
Grant v Registrar for Laois
Permanent TSB v Brennan
Permanent TSB v Mallon
Concerned a term in the mortgage that provided that if the mortgagor doesn’t make 2 terms of payments the whole mortgage is due.(ACCELERATION CLAUSE) Argued that this term was unfair
Held: The case wasnt decided on this but the courts did comment on this.
The term wasnt unfair insofar as the mortgagor had given a lot of information on the terms prior to signing and he had received legal advice
Grant v Registrar for Laois
The courts aligned with the decision in aziz whereby it is up to the decision maker/judge to determine whether a mortgage is fair. It is not up to the mortgagor to assert that a term is fair, the judge has to make their own independent decision on the fairness.
Permanent TSB v Brennan
Concerned a core terms agreement but the argument wasnt in terms of the core terms itself but of the fact that because of the downturn in the economy, the mortgagor didnt receive as much income and it made it difficult to repay the mortgage.
Held: The terms in the contract in themselves werent unfair and the core term agreement couldn’t be assessed for fairness.
Protective code 1
Code of conduct for mortgage arrears 2013
Code of conduct for mortgage arrears 2013
Sets out the process by which financial institutions have to follow when a mortgagor falls into arrears:
Must have a MARP- Mortgage arrears resolution process
Must use clear and definitive communication to the person who has fallen into arrears
Has a duty to notify the manager that they have fallen into arrears and the consequences that follow
Must offer reasonable alternatives of payment
There must be an internal appeals process
NB: Memorandium process- there must be an 8 month gap between the arrrears and legal proceedings to give time for the parties to negotiate a solution
What effect does this code have
Instiutions found in breach of this code would be fined,
However, that wouldn’t serve much benefit to the individual so the legal status of code was introduced
Legal status of code
Secondary legislation which allowed mortgagors to raise the code of conduct when they had fallen into arrears and were at risk of repossession
State both cases that focused on the code of conduct
Stepstone mortgages v Fitzell
Irish life and Permanent v Duff
Stepstone mortgages v Fitzell
Concerned a mortgagor who had defaulted on payments and the mortgagee wanted to repossess the property. The defendant argued that the pl was in breach of the code of conduct because there was no internal appeals process.
held: Laffoy J stated that when a mortgagee is coming into court seeking for repossession on foot of a mortgagee going into arrears, the mortgagee has to comply with the code of conduct. They were in breach of the code by not providing an internal appeals process and therefore the repossession was denied.
Irish Life and Permanent v Duff
Held: Hogan J accepted Laffoy J’s judgement but raised concerns on the ‘providing reasonable alternatives for repayement’, what would constitute reasonable.
However, using the ruling in Fitzell, the concluded that the mortgagee could not repossess the property because they hadnt made reasonable efforts ton provide alternative options for payments
What supreme court case shows the current position of the courts?
Irish life and permanent v Dunne/Dunphy
Irish life and permanent v Dunne/Dunphy
Key question of whether the courts would have to look at all of the provisions of the code of conduct, and if the repossession would be denied if one of them was broken.
Held: Focused on the memorandum period- if the mortgagee brought legal proceedings before the 8 months, then their application to repossess would be denied.
In terms of the other terms, they could not veto repossession
If the Oireachtas saw fit,, they could legislate primary legislation to vindicate those other terms.
Protective code 2
Consumer Protection code 2012
Consumer Protection code 2012
Provides protections for mortgagors to not enter into mortgages where they wont be able to pay off the debt or are unclear of the consequences that will arise when falling into arrears
Consumer Protection code 2012
Provisions
!. Warning and info
2. suitability testing
3. Stress testing- look at income and expenditure and see if they are capable of repaying debt with current interest rate and if the interest rate were to increase
4. VAluation of property- must be valued to ensure that if property was sold in case of arrears, it would be able to pay off the debt owed
Consumer Protection code 2012
Case
BOI v Quinn
Concerned def who went into arrears and challenged repossession order on the basis that the pl had not complied with the consumer protection code by not providing a suitability test
Held: decided case on another factor but obiter comment;
Could use reasoning in dunphy insofar as th provision was vital to the code, defendant could argue it if there was clear evidence to show that the failure in repayment was a direct consequence of the lack of the suitability test.
The equity of redemption
What is it
Concerns when the mortgage debt has been paid off, the mortgagor should be able to get the property back
What case defines the equity of redemption
Define it.
Dellway v NAMA
Finnegan J stated that the courts have to pay close attention to mortgage agreements in terms of the term for the mortgage to be redeemed. Some mortgagees will postpone for longer to allow for interest to accrue however this is unlawful.
Once the full repayment of debt has been made, the mortgagor has the right to the property, free of any mortgage terms.
Hardiman J stated that if the property is to be sold due to the mortgagor going into arrears, any outstanding costs accrued form the sale of property after the debt has been dully repaid is to go back to the mortgagor, and as a result the mortgagee has to sell the property to the true and full value
What are the three restrictions that the courts look out for?
- Prolongment of the right to redeem
- Collateral Advantages
- The option to purhcase
Prolongment of the right to redeem
Explain and state cases
The lender will increase the time the property can be redeemed when paying off the mortgage to accrue more interest.
Biggs v Hoddinoft
Fairclough v Swans Brewery
Kingscroft Trust v Byrne
Biggs v Hoddinoft
Facts: agreement that the mortgage can only be redeemed 5 years after the commencement of mortgage payments.
Held: Term was fair, it was not arbitrary or unreasonable. The courts will only address or scrutinise when the postponement is too long or excessive
Fairclough v Swans Brewey
Concerned a mortgage on a 20 year lease and mortgagee said only had a right to redeem 6 months before the lease ended.
Held: unreasonable, arbitrary and unfair postponement on the right to redeem.
Kingscroft Trust v Byrne
Concerned a mortgage agreement between 2 business men, mortgage had to be repaid over 40 years and redemption could only occur after the 40 years had ended
Held: not unfair as this was between 2 business owners with advanced commercial knowledge. The courts will only interfere in exceptional circumstances.
Collateral advantages
Explain and state cases
Concerns obtaining of interest as well as another addition to this
Biggs v Hoddinot
Noakes v Rice
Browne v Ryan
Biggs v Hoddinot
Concerned an agreement between pl and def that during the mortgage the mortgagor could only purchase alcohol from the mortgagee for his hotel business
Held: Not unreasonable as this was an agreement between 2 business ppl
Noakes v Rice
Concerned an agreement between pub and brewery. Stated that during and even after the mortgage had been paid off, the pub could only get their alcohol from the brewery.
held: unreasonable and distinguished it between the biggs case because here the agreement was to exist even after the full debt had been paid off and the doctrine of redemption meant that once the full debt had been paid off, the person is no longer bound by any agreement in the mortgage, it will be as if the mortgage never existed.
Browne v Ryan
Concerned a mortgage and one of the terms that when the mortgage is paid off and if the property goes on sale, then mortgagor would have to employ the mortgagee as the auctioner and pay a set comisison rate.
Held: The agreement wasnt enforceable as when the mortgage is paid off, the person gets the property mortgage free and not bound by any prior terms.
option to puchase
Explain and state cases
Aside from the security of debt the mortgagee also gets an option to purchase part of the mortgagors’ property.
Krelinger v Patagonia Meat
Samuel v Jarrah timber
Krelinger v Patagonia Meat
Concerned mortgage of 5 years and the right to redemption weren’t at question it was an agreement made that the mortgagor could only sell sheepskin to the lender and no one else and the mortgage had been paid off in 2 years and the mortgagor wanted to sell sheepskin to other people.
Held: the agreement wasnt unreasonable as it was a separate agreement made through the mortage and was still enforceable.
Noted that the courts will apply more scrutiny when the option to purchase concerns the security
Samuel v Jarrah timber
Concerned mortgage on stocks, mortgagor offered to sell part of the stock at 40 percent of its market value within 12 months.
Held: agreement couldnt exist as then the right to redeem would be inexistent because the security wouldnt be returned.
Cited Dellway Investments v NAMA
Finley J: Where a mortgage gives a mortagor an option to purchase, it will be void even if it IS NOT OPPRESSIVE TO THE MORTGAGOR.
What are unconscionable interest rates
State the cases
When the interest rate is too high, the courts will assess it and see if it is unconscionable
Cityland v Debrah
Multiservices bookbinding v Mordan
Secured Property Loans v Floyd
AIB v DX and TX
Cityland v Debrah
Concerned a loan worth 2k but after it gets paid off including interest it would’ve been 4k.
Held: It was unconscionable and unreasonable and excessive and would pose a huge restriction on the equity of redemption
Multiservices bookbinding v Mordan
Concerned a mortgage and the loan repayments involved currency exchange.Argued that the mechanism built into the agreement to determine the interest rate was arbitrary and unreasonable.
Held: it wasn’t oppressive, it was just a hard bargain.
Secured Property Loans v Floyd
Concerned a loan take out to repay tax payments and the loan was worth 125k and the interest rate was almost 20%. The defendant argued because the interest rate was so excessive and arbitrary that the mortgage should be void.
Held: LAffoy J rejected this, she stated that the interest rate had been created by the oireachtas and the courts only focus on unconscionable ones, and even if the interest rate was to be deemed as unconscionable, it wouldnt have the effect of making the mortgage void, the interest rate would just be changed by the courts.
AIB v DX and TX
Noonan J stated the ways in which a mortgage would be set aside on the basis of unconsciousness
1. If there was a vulnerable party that was being taken advantage of
2. If one party knew/ought to have known that the other was vulnerable
3. Where there is unfairness in the agreement,ie. thinhs are being undervalued
4. Where someone is morally culpable and they are seekig benefit
5. If there is a lack of appropriate legal advice
Current case
Loan taken out w PTSB but then transfered to vulture fund.
Initial loan with ptsb would have had a 4.3 percent interest rate but now its 8.5 and they’re arguing that it is unconscionable.
Mortgages and personal insolvency
What does that mean
Basically bankruptcy but for mortgages
What leg concerns Personal Insolvency?
The personal Insolvency act
Section 2 of LCLRA amendment act 2013
Section 2A of the LCLRA amendment act 2019
The personal Insolvency act
Sets up a regime for individuals to follow when they are declaring personal insolvancy
Section 2 of LCLRA amendment act 2013
Provides that repossession proceedings can be adjourned to allow for personal insolvency cases to be consider
What factors do the court consider under s2 of LCLRA 2013
- The individuals’ co-operation to the MARP
- The individuals repayment history
- If there were any previous adjournments which would be evidence of the debtor trying to delay the repayment of debt.
Section 2A of the LCLRA amendment act 2019
Allows the courts to consider a wide array of factors when determining whether repossession should take place
What cases does S2a concern
Where possession had been adjourned on S2 and PIA taken but expired
Where multiple PI proceedings an dunsuccessful
What factors does the courts consider under 2A?
The debt outstanding
The arrears that have accrued
The valuation of the property.
State the remedies available to a mortgagee
- Documents of title
- Insurance
- Peronal Action for debt
- Documents of title
Historiclaly u would pass over the full property to the mortgagee and they would have confidence that the land couldn’t be transferred and sold without consent
S90 of LCLRA 2009- by transferring title deed, right still exists insofar as motgagor needs to request deed from the mortgagee to do anything with the property
So bank must keep deed safe
- Documents of title
Case
ACC bank v Fairlee properties
Facts: The bank had possession of title deeds, over a 2-year period, the mortgagor was making a request to have those title deeds and the bank couldn’t comply with that request.
Held: It is reasonable to impose a duty of care on the bank as a mortgagee who had received the title deed, to take reasonable care in the storage of them, so that they could be made available when needed or to be inspected.
The bank failed in its duty by being unable to produce the deeds over a 2-year period.
Couldn’t sell the property and couldn’t transfer the property as a result, so very significant.
Insurance old stature
S19 of Conveyancing act
S19 of Conveyancing act
Gave power to a mortgagee to require a property to be insured by the mortgagor.
New
S110 of LCLRA
S110 of LCLRA
A mortgagee may insure and keep insured any building, effects or other property of an insurable nature, whether affixed to the land or not, which forms part of the mortgaged property.
Why is insurance necessary?
An insurance provision is critical because the ultimate security that the mortgagee gets is the knowledge that if there is a default in terms of debt, the property could be sold and the debt will be paid off.
Bearing this in mind, the value of the land is critical from a lender’s perspective.
If it is damaged or burns down, the mortgagee loses that security and will have nothing to sell anymore to pay off the debt.
Standard practice among all banks is they won’t grant a mortgage unless that there is proof that you have insured the house.
It is a breach in terms of the mortgage contract to let that insurance lapse.
- Personal Action for debt
Gives the mortgagee confidence that there is an asset out of which the debt would be paid.
Even if lending is secured with a mortgage, a person assumes contractual responsibility for the repayment of the debt.
LEg
Section 104 of LCLRA
Section 104(b) LCLRA
Sale extinguishes the mortgage, but without prejudice to any personal liability of the mortgagor not discharged out of the proceeds of sale.
Case
ICS Building Society v Grant
Facts: Concerned people who became speculative investors of land. The defendant bought an investment property in a rural area in Wicklow and it consisted of a house and some additional land and he thought it had potential to be redeveloped as a housing estate. Paid the equivalent of 370k for the property, and various loans were taken out, using the property as security. The defendant fell into arrears and the intended redevelopment of the property never came to fruition. The bank repossessed it in 2008 at which the total debt of the man was 1 million and the bank sold the property at 355k. Over 800k was still due.
Issue: Was the defendant personally liable for the amount even after the mortgaged property had been sold?
Held: He was liable for the outstanding debt. Charleton J stated that It is not accurate to claim that by entering into a mortgage deed with a bank a borrower has thereby secured a promise that the bank will, in the event of default, simply secure possession of the property and sell it for what it may be then worth, taking whatever the proceeds are and surrendering the rest of the debt.
Tort Claim: The defendant also argued that the court should recognise the tort of reckless lending- a circumstance where the bank lent more money than what would be safely secured.
Held: Rejected this argument- suggested that if the Oireachtas saw fit, could pass a law to introduce this tort. People can enter into bad bargains and it is not the role of the court to save them from this bad bargain- affirmed in AIB v Callaghan.
What orders to mortgagees look for once a mortgagor has gone into arrears?
Order for possession
Order for sale
Order for possession
Once a mortgagor goes into arrears the first thing a mortgagee will request is an order for possession followed by an order for sale
Common law possession
STATE CASES
Orders for possession didnt need to be made during common law mortgages as the outright ownership had already passed to the mortgagee on the signing of the contract for the mortgage
4 Maids v dudley- possession begins as soon as the ink of the contract dries
Quennel v Maltby: Mortgagee has a duty to reasonably look after the property
What case argued against common law possession?
Irish life and permanent v Duffy: The courts said that common. law possession was contrary to article 40.5 that guaranteed the inviolability of the dwelling
Legislation post common law around possession
- Section 62(7) of the Registration of deeds and titles act
- Section 97 of the LCLRA 2009
- Section 101 of the LCLRA 2009
- Section 62(7) of the Registration of deeds and titles act
State case
Allowed a summary process whereby mortgagees could request an order from the court for repossession and the courts would grant it if they saw fit.
Cody v BOI- reaffirmed that the summary order was reasonable and just
Section 97 of LCLRA
Provided that the court could grant orders for repossession however distinguished between residential mortgages and other mortgages, residential mortgages
97(1)- The mortgagee can not repossess property unless consent in writing by mortgagee within 7 days
If no consent then the mortagee can apply to court.
Section 101 of LCLRA 2009
Provided that where a mortgagor falls into arrears and theres evidence to prove that they can pay off the interest / debt that has accrued or pay off the breach, the courts will adjourn proceedings for possession for a reasonable amount of time to allow the mortgagor to rectify.
Case on S101 of LCLRA
Everday finance v O’Brien
Concerned a def who went into arrears and proceedings were brought for repossession. The def provided ample evidence to the courts that he had AP proceedings taking place at the time and if he were to succeed in them, he would own the land and be able to sell it to pay off the debt he owed.Requested that the proceedings be delayed until the AP proceedings finished.
Held: Acknowledged the AP proceedings and accepted that if he were to succeed he would be in a very good financial position. Also assessed the price of the family home and it would be able to pay off the whole debt so the mortgagee wasn’t being put at a disadvantage. The courts allowed for the adjournment of the repossession proceedings for a year to allow the AP proceedings to cease.
The courts also noted that if they had granted the repossession, the def wouldve been at a heightened risk of homelessness due to the lack of homes in the market.
Extra comments on S101
Doesn’t only look at a reasonable time for adjournment but also looks to see if the mortgagee will be disadvantaged if the time is prolonged.
Section only helpful if the mortgagor has the means to rectify their mistake.
Sale
Get an order for possession in order to get an order for sale. Proceeds of sale are used to pay off the debt.
Order for sale usually written in the contract
Pre- 2009 Sale legislation
The conveyancing act of 1881
Sections 19,20 and 21
Sections 19 and 20 of the Conveyancing Act
S19 shows when sale can arise
S20- shows when powers of sale can be exercised
Can be established when
Mortgagor makes a default on payments
Mortgagor breaches a non-repayment term,ie. insurance lapses.
These protections also protect a person who has purchased a property that had been sold from a mortgage where a dispute arises on the legality or reasonableness of that sale.
Section 21 of Conveyancing act
Provides the priority in how the proceeds of sale will be distributed:
1. The costs of sale,ie. legal fees, tax etc.
2. The arrears/debt due
3. If theres multiple mortgages, the courts have to determine which mortgagee gets priority.
4. Any outstanding proceeds of sale go to the mortgagor
Post 2009 ACt what leg
Section 100 of LCLRA
Section 100 of LCLRA
Reiterates the 1881 ACt
Provides that sale can be issued by court order provided that theres 28 days notice/ 7 days within consent given by mortgagor:
Where there has been a default in payments for 3 months
Where interest of arrears is unpaid for 2 months
Where a provision of the mortgage has been breached
If a provision has been breached, the power of sale is triggered immediately.
The mortgagee’s duties on sale
The mortagee when selling property has a duty to conduct the sale reasonably as the proceeds coming from the sale have a direct impact on the mortgagor.
If theres a surplus, he benefits
if theres negative, the mortgagor can pursue the outstanding debt.
Mortgagees duty of care when selling property
state case and explain
Hollohan v Friends Providence Life Office
Concerned a mortgagor who had gone into arrears and the property was being sold. The mortgagee was selling the property as an investment interest insofar as there were still leases and tenants existing in the large building that had not ended. He did not buy out the tenants or wait until the property was vacated.
The auctioneer suggested that the proceeds of the sale would be significantly larger if the property was vacant.
The mortgagee refused to acknowledge or take into consideration the idea of selling the property vacant.
The mortgagor said that the sale should only occur if the property was sold vacant and the mortgagee should be barred from sale if it was sold any other way.
Held: The courts said a duty existed between the mortgagee to the mortgagor and they looked at what a reasonable person would’ve done in selling the property, they would’ve at least considered the possibility of selling the property vacant.
O’Dalaigh J stated that this duty exists because the mortgagor is directly impacted by what the property achieves when sold.
If the money was more than the debt, the mortgagor benefits,
if it was less, they would still have to find ways to pay off the mortgage and other mortgages.
NB: Noted that the unreasonableness was the fact that they didnt even consider selling the property vacant, not that they didnt sell the property vacant.
The extent of the duty of the mortgagee
State case
Cuckmere Brick v Mutual Finance
Concerned a sale of property following a mortgage dispute. The property had planning permission for 35 houses/ 100 flats and when conducting the sale the mortgagee only included the fact that there was planning permission for 35 houses but omitted the fact that there was planning permission for 100 flats. Mortgagor said that the proceedings for sale be adjourned so that they can include 100 flats.
Held:Salmond J said that when mortgagee has power to exercise sale, they can do so whenever they want however, they have to conduct the sale cautiously and advertise it properly so that the property is sold at its true value.
Example: Property for sale at auction and not a lot of ppl show up and property doesnt get sold, not. a breach
Property not sold because key aspect of the property wasn’t advertised amounts to a breach of duty.
The mortgagee can exercise the sale whenever they want whats the case and explain
Silven Properties v Royal Bank of Scotland
Concerned a property that was being sold on foot of a mortgage dispute and the mortgagor argued that planning permission gotten before sale to increase the value of the property.
Held: The mortgagee can decide when to exercise the sale and does not have a duty to actively enhance the property to increase its value.
Summary of these past cases
The mortgagee has the right to exercise sale whenever they want and the mortgagor cannot delay it for housing market fluctuations- this is so that they receive the security as fast as possible
However mortgagee has duties when conducting the sale to conduct it reasonably and advertise it properly so the property reaches its true value
They do not have an obligation to enhance the property to increase its value for sale.
Post 2009 leg
Section 103 of LCLRA
Section 103 of LCLRA
Wen exercising power of sale the mortgagee must act as reasonably as possible to ensure that the house is sold at the best price reasonably obtainable
State the cases and does S103 abolish past case law
No it doesn’t
ACC bank v Mcellin
FArelly v Kavanagh
First National Building Society v Raftery
Hennessy v TYRELL
ACC bank v Mcellin
stated that mortgagee has the right to exercise the power of sale whenever they want and the mortgagor cannot attempt to delay it
Farrely v Kavanagh
When assigning a mortagge to a receiver he same rules apply as they would to the mortgagee.
They can exercise the power of sale whenever they want but must sell it reasonably and advertise properly so it reaches its full value and there’s no obligation to enhance the property prior to sale to increase its value.
First nationwide building society v Raftery
Concerned derelict pub where insurance had lapsed and the mortgagor argued that the proceeds of sale were too low for what the value of the property was worth.
Held: Threshold very high to show that sale was unreasonable, must show ampliful evidence
No breach as the property had been sold at lowest price within the threshold and not below it
Hennessy v Tyrell
Held: Selling the property vacant isn’t absolute, the mortgagee will not always be in breach of their duty if they sell the property occupied. However on the facts of the case, the mortgagee was in breach because they didnt advertise the property properly, they gave only 3 weeks’ notice to the auction and didnt advertise on any reputable sites.
Appointment of receiver
assigns mortgage to someone else to deal with usually in a commercial basis
Pre 2009 Act
Sections 19 and 24 of the Conveyancing Act
The same in relation to breach or default in terms of mortgage
Post 2009 Act
Section 108 and 109 of LCLRA
Same in terms of exercise of sale
Duty of receiver in sale
name both cases
Downside v First City corporation
Medforth v Blake
Downside v First City corporation
No duty on part of receiver in terms of assets of mortgage to the mortagor
Medforth v Blake
Duty for due dilligence to act in good faith
Irish cases
Moorview v First active
Drury v Everyday Finance
Moorview v First active
Considered both Medford and downside and aligned with Medford, at least a duty of good faith
Drury v Everyday Finance
Duty of reciever same as duty of mortgagee when conducting a sale, aligns more with medforth
Still not clear on where irish law stands.
