Background
The case[1] involved a loan provided by Bank of Scotland Ireland which was secured by way of mortgage and charge registered on the mortgaged property in March 2006. The assets and liabilities of Bank of Scotland Ireland were subsequently transferred to Bank of Scotland plc on 31 December 2010. Bank of Scotland plc failed to register its ownership of the charge with the Property Registration Authority.
Bank of Scotland plc sold a portfolio of securities which included that charge to Tanager DAC. The Defendant in this case fell into arrears and Tanager DAC issued proceedings seeking possession of the mortgaged property in the Circuit Court.
In the Circuit Court the Defendant argued that as Bank of Scotland plc had never registered its ownership of the charge that therefore the Plaintiff’s charge should not have been registered by the Property Registration Authority, meaning that the Plaintiff should not be allowed to enforce the charge.
The Circuit Court refused to grant an Order for Possession and the Plaintiff sought to appeal the matter to the High Court. The High Court was required to consider whether Bank of Scotland plc, without itself being a registered owner of the charge could validly have transferred same to the Plaintiff. The High Court invited the parties to apply to the Court to have the matter referred to the Court of Appeal.
The Court of Appeal
In the Court of Appeal Ms Justice Marie Baker noted the public interest of having the issues decided “cannot be denied”.
The Court further noted that the case essentially concerned both Sections 64 and 90 of The Registration of Title Act 1964. Section 64 deals with how the transfer of a charge may be protected with Section 64 (1) stating “The registered owner of a charge may transfer the charge to another person as owner thereof, and the transferee shall be registered as owner of the charge.” Section 90, meanwhile conveys powers on a person who is entitled to be registered as owner of land or of a charge.
The Court found that the register of title is conclusive evidence of ownership of a charge on property. The Court also ruled that the Property Registration Authority could not be joined to the case for the purpose of hearing further arguments regarding the entering of Tanager plc as the owner of the charge.
Conclusion
This decision will provide comfort to purchasers of loan portfolios, as it confirms the Courts will not look behind the registration of a charge holder even where the validity of the transfer is called into question.
[1] Tanager DAC -v- Rolf Kane 2017/122 CA