Lost Deed of Mortgage a Bar to Possession of Property

A recent case before the High Court (Promontoria (Finn) Limited –v. Coleman Flavin) considered whether or not a lender could enter possession of property where it could not produce a copy of the actual mortgage deed itself signed by the borrower.

In this case, the lender could only produce a memorial of the Deed of Mortgage.  A memorial is a summary of a document that is registered in the Registry of Deeds.  It contains the date, parties and description of the property to the Deed of Mortgage and is a record retained by the Registry of Deeds.  It was this document the lender sought to rely upon as to the existence of the Deed of Mortgage.

The High Court held it is an essential proof in an application for an order for possession to establish that the party bringing the application for possession has in fact a right to take possession of the lands.  In the case of unregistered lands, which is subject to a mortgage created prior to 1 December 2009, this proof can normally only be established by producing a copy of the mortgage deed itself.  This is because the actual mortgage deed itself contains the inherent right of possession and may very well also constrain the terms of that right to possession.  The High Court therefore held that the only basis upon which a court can be satisfied that a right to take possession has in fact arisen on the facts presented to it is to examine the terms of that mortgage deed.  The High Court held it was not appropriate for it to speculate as to what the terms of the mortgage deed might be.

Curiously, the Plaintiff in this case never stated on Affidavit that the original mortgage deed had been lost or was otherwise unavailable. Nor did the Plaintiff seek to adduce secondary evidence and specifically sought to rely on the Memorial.  The court did not therefore consider what might be permissible as secondary evidence in the case of a missing or lost Deed of Mortgage as the issue did not arise.

Given that the memorial was a summary document only and did not contain all of the terms of the Mortgage Deed, the High Court held that the Plaintiff had failed to establish its right to possession had arisen and set aside the order for possession that had been made by the Circuit Court.

In the judgment the High Court did point out that this judgment was concerned with the old style mortgage deeds in respect of unregistered land which largely arose prior to 1 December 2009.  It did specify different considerations might arise in the case of mortgages created after 1 December 2009.

This case serves as a useful reminder to all parties seeking to purchase properties in the case of distressed sales, that a copy of the original mortgage deed should be produced and that some lesser form of evidence should be viewed with high caution!

For further information on this topic, please contact Brendan Sharkey at bsharkey@reddycharlton.ie