Background
Everyday Finance, as successor to IIB Homeloans, and a receiver sought possession of an apartment in Dublin under a 2006 guarantee and charge given by Paul O’Donoghue to secure borrowing by his father, Edward O’Donoghue. The loan was in arrears. The plaintiffs contended that the apartment was not Paul O’Donoghue’s principal private residence and that the High Court could therefore determine the possession claim.
Paul O’Donoghue said that he and his wife had lived in the apartment from January 2024, before the proceedings began in May 2024. He argued that the claim had to be brought in the Circuit Court under s. 3 of the Land and Conveyancing Law Reform Act 2013. He also alleged that he had signed the guarantee and security documents while under his father’s undue influence.
The Court’s Holding
Ms Justice Bolger held that s. 3 of the 2013 Act applies where land is the mortgagor’s principal private residence when proceedings are instituted, provided the mortgage was created before 1 December 2009. It does not matter that the property was commercial in character, or was not the mortgagor’s residence, when the mortgage or guarantee was executed.
On the evidence, the apartment had been Paul O’Donoghue’s principal private residence from January 2024, four months before the proceedings commenced. The possession proceedings therefore had to be brought in the Circuit Court. The High Court dismissed them for want of jurisdiction. A later reported change in occupation could not cure the jurisdictional defect.
The Court also held, in the alternative, that the CCMA did not apply because the property was not the borrower’s primary residence when the mortgage security was created. It rejected the undue-influence defence: an adult child living with and working for a parent did not, without more, create a presumption of undue influence. Had the High Court possessed jurisdiction, the plaintiffs would have been entitled to possession.
Key Takeaways
- For s. 3 of the 2013 Act, residence status is assessed when proceedings are issued.
- A pre-December 2009 mortgage claim concerning the mortgagor’s principal private residence belongs in the Circuit Court.
- A property’s later conversion into a principal private residence does not make the CCMA apply retrospectively.
- Living with a parent as an adult does not alone establish undue influence.
Why It Matters
The decision draws a sharp distinction between the jurisdictional rule in s. 3 and CCMA coverage. A lender considering possession proceedings must establish the property’s occupation status at the time proceedings are commenced, not rely on an earlier inspection or the property’s status when security was granted.
It also confirms that filing in the wrong court is fatal even where the lender could otherwise establish its substantive entitlement to possession.