FINANCIAL INSTITUTIONS should not bring repossession cases to the High Court when the cases could be dealt with by the Circuit Court, a High Court judge has said.
Delivering judgment on an application by AIB for possession of a Limerick city property, Mr Justice Liam McKechnie said a fear by the defendant about what the neighbours will think is not “sufficient justification” to bring cases straight to the High Court.
Counsel for AIB, Pauline McRandal, had told the court that people facing repossession orders in the Circuit Court in the 1980s “got very upset” as often their neighbours would be in court for other offences, and would then find out about their financial difficulties.
Nothing else was being heard in the High Court other than repossessions, she said, adding “this is one of the reasons banks decided to bring them to the High Court”.
The criticism comes as new figures show a large increase in repossession cases initiated in the High Court in 2009.
According to figures recorded by the Courts Service, some 207 possession cases were taken in the High Court in the first three months of 2009. This compares to 95 cases for the same period in 2008.
Mr Justice McKechnie also criticised financial institutions seeking repossession orders shortly after default on repayments commences.
Adjourning a case involving GE Capital Woodchester, he said: “Your clients fall into debt of €4,300 and you demand repossession – terribly impressive”.
He further criticised GE Capital, asking how the mortgage lender could read the future. Counsel for the mortgage lender had said “there’s no prospect of payments in the future”.
Some 78 applications for possession orders were listed before yesterday’s chancery summonses hearing, 27 of which were made by subprime lender Start Mortgage.
KBC Bank, formerly known as IIB Homeloans, listed 10 cases before the court.
Adjourning one case involving IIB, the judge said: “I’m not undervaluing the rights of the plaintiff company to seek out debt owed, but orders have really severe personal consequences for defendants.”
Possession orders were granted in two cases, while all new cases were adjourned to give defendants “one last chance”.
Possession of a Co Cork property was granted to GE Capital Woodchester, after the defendants fell into arrears of €25,737.13.
Counsel for the mortgage lender told the court “only four payments were made on this loan since it was drawn down in 2007”.
The court also heard that the defendants said they would make payments of €1,636 per month, but only did so for the month of April.
The judge granted a stay of six months on the order, awarding costs at Circuit Court scale.