‘Older possession orders still enforceable’
RDJ partner Darryl Broderick says that a recent Court of Appeal decision has “significant practical implications” for lenders and those holding interests in secured property loans where possession orders were obtained some years ago.
The court held that the 12-year limitation period prescribed by the Statute of Limitations 1957 for "actions upon a judgment" does not apply to applications for leave to issue execution of a possession order.
In an analysis on the firm’s website, Broderick explains that the case arose from an order for possession of a property that Start Mortgages obtained in the High Court in March 2012.
The order was subject to a six-month stay on execution, which expired in September 2012.
High Court decision
Just over 12 years later, the underlying loan and mortgage were transferred to Mars Capital Finance Ireland DAC.
In October 2024, Mars Capital brought a motion seeking to be substituted as the plaintiff in the proceedings and to obtain leave to issue execution of the possession order.
The first defendant opposed the application, arguing that the 12-year limitation period for "an action upon a judgment" in the 1957 statute applied and that the application was, therefore, statute-barred.
The High Court rejected the argument, after which the first defendant appealed to the Court of Appeal.
Originating application
In Mars Capital Finance Ireland DAC v McDaid & Anor, a judgment delivered by Ms Justice Costello and Mr Justice McDonald dismissed the appeal.
Broderick notes that the statute defines ‘action’ as "any proceeding (other than a criminal proceeding) in a court established by law".
The court concluded that ‘proceeding’ in this context referred to an originating application – one that commenced or brought a new matter before the court – rather than an application made within the framework of proceedings already in existence.
‘Welcome clarity’
The judges held that an application for leave to execute a possession order falls outside the definition of an ‘action’, as it is brought within the proceedings in which the original order was granted.
The RDJ lawyer also notes that the court’s analysis of pre-1957 legislation found that an application for leave to execute was treated differently from an "action upon a judgment".
He concludes that the ruling provides “welcome clarity” for lenders and assignees of mortgage portfolios in a number of areas:
- Older possession orders remain enforceable,
- Transfers of loan books are not affected, and
- Order 42, rule 24 of the Rules of the Superior Courts – under which the application was made – remains the correct mechanism and is not subject to the 12-year limitation period.