Background
Pepper Finance Corporation (Ireland) DAC — successor by name change to GE Capital Woodchester Home Loans Limited — held a registered charge over the defendants’ property in Meath, securing a €322,000 loan drawn down in July 2007. The defendants fell into arrears from around October 2013. After engaging in its Mortgage Arrears Resolution Process (MARP) and ultimately declining to offer an alternative repayment arrangement, Pepper issued the requisite pre-proceedings notice under Provision 58 of the Central Bank’s 2013 Code of Conduct on Mortgage Arrears and commenced Civil Bill proceedings in the Circuit Court in July 2019. By June 2025, arrears stood at approximately €244,818, with total debt of €476,726.
The proceedings were frequently adjourned to allow engagement, including referrals to a personal insolvency practitioner and a complaint to the Financial Services and Pensions Ombudsman. During this period, in July 2023, Pepper sent two letters in quick succession: one dated 20 July 2023 stating it was treating the defendant’s situation “under our Mortgage Arrears Resolution Process … in accordance with the Code,” and a follow-up dated 26 July 2023 confirming the defendant was already outside MARP and that proceedings were continuing under Provision 59. No alternative repayment arrangement was ever agreed. The Circuit Court made a summary possession order on 23 July 2025.
The first-named defendant, now represented by solicitor and counsel, appealed to the High Court on a single ground: that Pepper’s 20 July 2023 letter had voluntarily re-engaged the MARP process and that any resulting non-compliance with MARP obligations barred the court from granting possession. All other proofs — ownership of the charge and entitlement to seek possession — were expressly conceded on appeal.
The Court’s Holding
O’Donnell J. dismissed the appeal and affirmed the possession order. Applying the framework in Bank of Ireland Mortgage Bank v. Cody [2021] IESC 26, the court was satisfied that Pepper had established both required proofs: it was the registered owner of the charge (the name change from GE Capital Woodchester being a matter of public record confirmed by Court of Appeal authority in Pepper Finance v. Moloney [2023] IECA 161), and the right to possession had arisen following the defendants’ prolonged default. The court further found that Pepper had complied with all pre-commencement obligations under the 2013 Code, including the moratorium provisions in Provisions 56–58.
On the sole contested issue, the court held that the 20 July 2023 letter did not obligate Pepper to put the proceedings on hold and did not provide a basis for refusing the possession order. Applying the Supreme Court’s analysis in Irish Life and Permanent plc v. Dunne [2016] 1 IR 92, the court confirmed that a court’s role in reviewing Code compliance is confined to ensuring the pre-commencement moratorium was observed and — post-commencement — to enforcing the obligation under Provision 59 to seek a stay where an alternative repayment arrangement has actually been agreed. No such arrangement was agreed here.
The court reasoned that where a lender voluntarily communicates with a borrower during live proceedings — without any Code obligation to do so and without reaching an agreed arrangement — it would be contrary to public policy to treat that communication as a ground for denying possession. To hold otherwise would deter lenders from engaging with borrowers during proceedings, undermining the Code’s own objective of encouraging ongoing contact. The court expressly distinguished Stepstone Mortgage Funding Ltd v. Fitzell [2012] 2 IR 318, where an alternative repayment arrangement had been in place, making Provision 59’s mandatory stay obligation directly applicable.
Key Takeaways
- A lender’s voluntary mid-proceedings communication referencing MARP does not revive MARP obligations or create a new moratorium bar where the pre-commencement Code requirements were already met.
- Following Irish Life and Permanent v. Dunne, courts will only refuse possession on Code-compliance grounds where: (a) proceedings were commenced in breach of the pre-commencement moratorium, or (b) an alternative repayment arrangement was actually agreed post-commencement but the lender failed to apply for a Provision 59 stay.
- Lenders are not penalised for engaging in voluntary outreach or correspondence with borrowers during live possession proceedings; doing so does not expose them to a new layer of Code-based defences.
- A defendant may raise, on a de novo Circuit appeal, new legal arguments going to the adequacy of the plaintiff’s proofs, even if not raised below, provided the argument can be sustained on the evidence already before the Circuit Court — per Mars Capital Finance Ireland DAC v. Temple [2023] IEHC 94.
Why It Matters
This decision clarifies a question that had been left open after Irish Life and Permanent v. Dunne: what happens when a lender sends correspondence during active possession proceedings that invokes MARP language without any Code obligation to do so? The High Court draws a firm line, holding that only two categories of Code breach — the pre-commencement moratorium and a post-commencement failure to stay agreed arrangements — can defeat a possession claim. Voluntary engagement beyond those requirements will not be weaponised against lenders.
For practitioners representing mortgage lenders, the judgment provides practical reassurance that maintaining contact with borrowers during proceedings, as encouraged by Provision 59’s general contact obligation, does not carry the risk of inadvertently creating fresh procedural bars to a possession order. For borrowers and their advisers, it underscores that the Code’s protections in the possession context are specifically targeted and limited in scope: absent a concluded repayment arrangement, the courts will not treat ongoing engagement as a reason to withhold relief.