High Court finds receiver to be invalidly appointed and a trespasser

Discussion in 'Mortgage arrears & negative equity case studies' started by Asphyxia, Oct 3, 2015.

  1. Mr Holmes

    Mr Holmes Frequent Poster

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    I agree with you in this regard, however I expect significant fallout from the judgement, indeed the very fact of Danske bank attempting to import extra powers ( informing the borrower that the receiver is attorney for the mortgagor ) within a deed of appointment of a receiver that are not contained within the mortgage debenture could render such receivership appointments void ab initio, see the Masters comments on the matter below:

    • “It is noted that the receiver… is agent of the mortgagor and, so far as is necessary (?), shall be attorney of the mortgagor and the mortgagor alone shall be responsible for his acts.”
    This recital does not tally with the legal position in this case. There is no question of the receiver enjoying the status of attorney for the mortgagor, and neither is he the agent of the mortgagor if he exercises the mortgagee’s power of sale, which power is not listed in the 1881 Act. The recital is, in short, an actionable misrepresentation on the part of the plaintiff bank. It was rather late in the day for the bank to try unilaterally protect its position. If the receiver’s actions have unlawfully caused the defendants loss, the bank, as the receiver’s principal, will be liable.
     
  2. Black_Adder

    Black_Adder Frequent Poster

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    Mr Holmes
    I am aware of a case that is winding its way forward involving a particular bank. The jist is they appointed a Receiver prior to the accounts going two payments into arrears when in fact fact it was 1.7 payments. Did not contact all the borrowers. Trespassed. Changed the locks and sold the properties. The only issue for the litigant is that the law is far from certain regardless of the merits. He seems determined to teach the Bank a write off.
     
  3. Mr Holmes

    Mr Holmes Frequent Poster

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    Black_Adder,

    The following case law may be of assistance to the litigant, Windsor Refrigerator Co. Ltd. v. Branch Nominees Ltd [1961] 1Ch. 375., basically, the upshot is that the appointment of a receiver should be in strict compliance with the mortgage deed, any deviation from the mortgage deed and the deed of appointment is void.
     
  4. Mr Holmes

    Mr Holmes Frequent Poster

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    Last edited: Jan 20, 2016
    Just to explain to readers what a recital is within a deed, in legal terms : a recital is a formal statement or setting forth of some matter of fact, in any deed or writing, in order to explain the reasons upon which the transaction is founded. So, if a recital is found to be a lie ( misrepresentation ) and is not based on a matter of fact, it brings the whole deed into disrepute, so that, in this particular case, the very deed of appointment of the receiver could be found by a court to be void, the result of which, has obvious serious consequences for the bank in question.
     
    Last edited: Jan 20, 2016
  5. Micky

    Micky Frequent Poster

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    Where could one find a list of "authorised signatories" of Danske Bank for say the year 2013?
     
  6. Mr Holmes

    Mr Holmes Frequent Poster

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    Last edited: Jan 20, 2016


    There is a register in Denmark where this info can be accessed, but you must be able to understand Danish to navigate the register. My advice to you would be to simply write to Danske bank and ask them for the list of authorised signatories with special power of attorney to bind the branch in Ireland for 2013. Have receivers been appointed by the bank over your properties ?
     
    Last edited: Jan 20, 2016
  7. Dermot

    Dermot Frequent Poster

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    Mr Holmes. Have you any idea on the list of persons authorised to appoint a receiver in the case of ICS/BoI repossessions?.
     
  8. Black_Adder

    Black_Adder Frequent Poster

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    ICS is now BoI btw.
     
  9. Dermot

    Dermot Frequent Poster

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    Sorry if I was not clear. The mortgages were taken out with ICS before BoI took over ICS.
     
  10. Mr Holmes

    Mr Holmes Frequent Poster

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    Last edited: Jan 22, 2016
    Dermot, on the 1st September 2014 the assets and liabilities of the ICS were transferred from the ICS Building Society to Bank of Ireland pursuant to statutory instrument 257/2014, therefore the authorised signatories of Bank of Ireland can now be used to appoint a receiver over a property that was originally mortgaged with the ICS. What is your current position with regard to the BOI ?
     
    Last edited: Jan 22, 2016
  11. Dermot

    Dermot Frequent Poster

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    Very briefly the receivers have been appointed to my friends RIP's. Just wanted to see if the appointment of the receiver was signed by an authorised signatory. I started a thread since closed on the my friends problems which is alluded to in the opening post on this thread.
     
  12. Mr Holmes

    Mr Holmes Frequent Poster

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    Is your friend fighting summary judgment by BOI ?
     
  13. Dermot

    Dermot Frequent Poster

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    No he is not. Hoping to do some type of deal on PPR which is not very likely to succeed
     
  14. Mr Holmes

    Mr Holmes Frequent Poster

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    Has summary judgment already been granted ?
     
  15. Carl O' Vian

    Carl O' Vian New Member

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    Hi Mr. Holmes,

    I'm defending against summary judgement that B o I are seeking after they sold my properties at 60% of market price which left significant Negative Equity. I'm of the view that the receivership appointment is invalid, for several reasons which I list as questions below. I would welcome your opinion on the below. Unfortunately I'm struggling to get any representation and have had to plough on myself in the absence of same

    Q 1: I've gotten copies of the Deeds of Charge, neither of which are signed or sealed. Does the absence of same make the same Deeds of charges void?
    Q 2: If they are void, presumably the receivership appointment would be void also?
    Q 3: The receivership appointment seems to have been made from the same Deeds of Charge which references Sect 24 of the 1881 Conveyancy Act. The receivership appointment documents seem to be made by seal, (seal is not visible) witnessed by an individual described as Authorised Signatory and further witnessed by another. The Authorised signatory however is not the Secretary but an Assistant Secretary? Does that also invalidate the appointment?
    Q 4: In terms of remedy, if the Deeds of Charge are defective does that have the meaning that the powers of the 1881 Act are not applicable in terms of potentially seeking restoration of the property to my ownership by Sect 74 of the Land Conveyancing Act 2009 and damages etc?

    Thanks
     
  16. Mr Holmes

    Mr Holmes Frequent Poster

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    Last edited: Feb 10, 2016

    Carl O'Vain,

    Q1. By deeds of charge I am presuming you mean the debenture. Is the debenture signed by you ? If the debenture is not signed by you, the bank could have a problem. The mortgage deed ( debenture ) should have been signed by you, most likely in the presence of the solicitor, employed by you, that was involved in the conveyance of the property. It is not necessary for the bank to sign the mortgage deed at the time of drawdown of the mortgage. They may sign the deed later on, for example, when they are registering their interest in the property with the land registry. In relation to the seal, sometimes photocopies of photocopies tend to remove any trace of a seal, especially if the seal is white. You are entitled to inspect the original mortgage documentation for an appropriate fee. ( usually at the offices of the bank's solicitor )

    Q2, If the debenture is in fact void, then, yes, the appointment of the receiver is most likely void also. However, there have been cases, were there was no express power to appoint a receiver in the debenture and the bank utilised the statutory power to appoint same. You must have received the deeds of appointment of the receiver, if the appointment was made from the debenture, the appointment must be made in strict compliance with the terms as set out in the debenture, otherwise the said appointment is invalid.

    Q3, Request the the memo and articles of association of BOI applicable, on the date the receiver was appointed. Look also for the list of authorised signatories applicable, with the power to bind the bank on that date. If the person who signed the deed of appointment of the receiver is not so authorised by the bank, then the appointment may be found to be invalid.

    Statutory provisions as they currently stand,

    Section 64 of the Land and Conveyancing Law Reform Act 2009 abolishes the need for sealing by an individual (but not for companies) and abolishes the rule that authority to deliver a deed has to be given in the deed. A document is identified as a deed by using the appropriate description or wording e.g. Assignment, Conveyance, Charge, Deed, Indenture, Lease, Mortgage, Surrender or other appropriate heading.

    The Act sets out the specific requirements for execution as follows: The deed is to be executed in the following manner:

    • If made by an individual, signed by the individual in the presence of a witness who attests the signature or signed by a person at the individual’s direction given in the presence of a witness who attests the signature, or the individual’s signature is acknowledged by him or her in the presence of a witness who attests the signature.
    • If made by a company registered in the State, it is executed under the seal of the company in accordance with its Articles of Association.
    • If made by a body corporate registered in the State other than a company, it is executed in accordance with the legal requirements governing execution of deeds by such body corporate.
    • If made by a foreign body corporate, it is executed in accordance with the legal requirements governing execution of the instrument in question by such a body corporate in the jurisdiction where it is incorporated.
    • Delivered as a deed by the person executing it or by a person authorised to do so on that person’s behalf”.
    • Any deed executed under this section has effect as if it were a document executed under seal.


    • did the BOI instigate enforcement proceedings prior to 2014, this is important as the Company Act 2014 changed the rules regarding company seal and persons authorised to bind the company.

    Q4. The house has been sold to a third party, so you will not be able to seek restoration of the property, however the court, if they find in your favour, can adequately compensate you for your loss regarding same.

    I would find it highly unusual for a debenture to be void, however given the rush to lend money during the property boom, anything is possible.
     
    Last edited: Feb 10, 2016
  17. Mr Holmes

    Mr Holmes Frequent Poster

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    Carl,

    Did BOI sell your property or did the receiver ?
     
  18. Flanno

    Flanno New Member

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    Last edited: Dec 3, 2016
    That's a great post very clear to understand The AIB receiver's took my properties without valid paper signed by the bank.
    Asphyxia I would love to have a chat with you sometime about the above.
    Peter Flanagan
     
    Last edited: Dec 3, 2016
    Gerry Canning likes this.
  19. dubliner2k15

    dubliner2k15 New Member

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    Do you have any other info on the project circle case? My parents had a property sold in the portfolio. We are unsure what is the next steps to deal with the situation since Cerebus now owns the residual debt.
     
  20. Brendan Burgess

    Brendan Burgess Founder

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