Important High Court Decision on Central Bank’s Code of Mortgage Arrears

We were recently involved in a High Court action acting for the Defendant.  We successfully defended the action.  The case brought by the bank was dismissed with costs in favour of our client.

Background

In AIB v Sean Buckley [2019] IEHC 97 , the Bank had issued a special summons seeking possession of property owned by the Defendant. The property comprised both the Defendant’s home and farming lands. The Defendant argued that the Bank had not complied with the Code of Conduct on Mortgage Arrears (“CCMA”) and therefore could not succeed with the application. The Bank argued that it had no obligation to apply the CCMA in this instance as the loan which it was relying on was used for the Defendant’s farming business and not for the purposes of funding his primary residence. Simons J. however accepted the Defendant’s argument that the CCMA applies to the target of the proceedings, rather than the nature of the loan. Accordingly, even though it was a business loan, it was secured on inter alia the primary residence and as the special summons sought possession of property which included the primary residence, the moratorium should have been applied.

Takeaway

The High Court held that the Central Bank’s Code of Conduct on Mortgage Arrears 2013 (Code of Conduct) applies to commercial loans where part of the security for the loan includes a Principal Private Residence (PPR).