High Court remits mortgage possession order to plenary hearing due to unclear loan history and potential unfair terms.

APPROVED [2026] IEHC 16

THE HIGH COURT

CIRCUIT APPEAL

2019 22 CA

BETWEEN

PEPPER FINANCE CORPORATION (IRELAND) DAC

PLAINTIFF

AND

TRACEY O’REILLY

(OTHERWISE TRACY O’REILLY)

DEFENDANT

JUDGMENT of Mr. Justice Garrett Simons delivered on 15 January 2026

INTRODUCTION

1. This matter comes before the High Court by way of an appeal from the Circuit Court. The order under appeal is an order directing the defendant to deliver up possession of a property pursuant to section 62(7) of the Registration of Title Act 1964. The order of the Circuit Court (Her Honour Judge Linnane) is dated

16 January 2019.

NO REDACTION REQUIRED

2. For the reasons explained below, the plaintiff has not yet established its proofs and the matter will have to be remitted to plenary hearing.

PROCEDURAL HISTORY

3. The original plaintiff in the proceedings had been KBC Bank Ireland plc (“KBC Bank”). The High Court (Ferriter J.) made an order, on an ex parte basis, on

6 March 2023 substituting Pepper Finance Corporation (Ireland) DAC (“Pepper Finance”) as the plaintiff in the title of the within proceedings. As is standard practice, the order contained a proviso to the effect that the defendant be informed, by notice in writing, of the following:

(a) That copies of the affidavit and exhibits grounding the (substitution)

application are available on request,

(b) That an application may be made to court on notice to set aside the order,

(c) That the defendant has an entitlement to contest the transfer of the loan and/or security involved to Pepper Finance Corporation (Ireland) DAC at the hearing of the action.

4. In other words, precisely because the application had been made ex parte, i.e. without hearing from the defendant, the order had built into it a number of important safeguards which allowed the defendant, if she so wished, to agitate the question of the validity of the transfer and the relevance of same to the proceedings.

5. The form of the order is that Pepper Finance has effectively stepped into the shoes of, or has been substituted for, the original plaintiff, KBC Bank Ireland plc.

6. The High Court (Simons J.) referred the following point of law to the Court of Appeal, by way of consultative case stated, on 30 January 2025:

“In circumstances where there has been an assignment of

interest in a registered charge and the underlying debt

subsequent to the making of an order for possession by the

Circuit Court, but prior to the hearing of an appeal to the

High Court, is it appropriate to substitute the

transferee/assignee as plaintiff in lieu of the original plaintiff.

Alternatively, should the transferee/assignee be joined to the

appeal proceedings as an additional party.”

7. The Court of Appeal delivered a reserved judgment on the case stated on 8 July 2025: Pepper Finance Corporation (Ireland) DAC v. O’Reilly [2025] IECA 140.

8. The Court of Appeal answered the case stated as follows (at paragraph 50):

“[…] In general, in circumstances where there has been an

assignment of interest in a registered charge, and the

underlying debt subsequent to the making of an order for

possession by the Circuit Court, but prior to the hearing of

an appeal to the High Court, it is appropriate to substitute the

transferee/assignee as plaintiff in lieu of the original plaintiff.

I say in general because there will be cases where it will be

appropriate to retain the assignor as a party to the

proceedings, for example if there is a counterclaim against

the original plaintiff, liability for which could not have been

assigned. In such cases substitution will not be appropriate

because the original party remains a necessary party and

there is not an identity between the interests of the assignor

and the assignee.”

9. The case returned to the High Court and was heard before me on 20 October 2025. Judgment was reserved to today’s date.

LEGISLATIVE FRAMEWORK

10. The application for an order for possession is made pursuant to section 62(7) of the Registration of Title Act 1964 (as applied by section 1 of the Land and Conveyancing Law Reform Act 2013). Pepper Finance, as moving party, must establish, first, that it is the owner of the registered charge, and, second, that the “principal money” in respect of a debt secured by the charge has become due and owing.

11. The Circuit Court Rules envisage that an application for an order for possession will normally be made on a summary basis: see Order 5B. However, the Circuit Court—and the High Court on appeal—enjoys a broad discretion to remit an application to plenary hearing.

12. The principles guiding the exercise of this discretion have been clarified by the Supreme Court in Bank of Ireland Mortgage Bank v. Cody [2021] IESC 26, [2021] 2 IR 381. Baker J., delivering the unanimous judgment, explained that there are a range of responses available to a court in an action for summary judgment. At one end of the range are cases where a plaintiff establishes its claim on the affidavit evidence because the defendant is not able to persuade the judge either that the evidence is incomplete nor that there is a basis on which a credible defence exists. At the other end of the range are cases where a defendant either positively establishes a defence at law or on the merits, or, alternatively, persuades the judge that the plaintiff has not established its proofs.

13. Baker J. went on then to explain, at paragraph 80 of the reported judgment, that many cases fall between these two extremes:

“Many applications for summary judgment would fall

between these two extremes and will involve the proffering

of evidence or argument by a defendant by way of defence

which is not sufficient to rebut the evidence of the plaintiff

to enable the judge to make a positive finding against the

plaintiff, but which offers enough doubt as to the truth or

completeness of the plaintiff’s evidence, or credibly presents

reasonable arguments or evidence that a defendant has a

basis of defence which merits further scrutiny, evidence or

argument. In that instance the trial judge is constrained by

the inability to decide between contested affidavit evidence

of fact, or resolve complex questions of law, the action

cannot therefore be disposed of summarily and will be

adjourned to plenary hearing.”

14. The position was summarised as follows at paragraph 105 of the reported judgment:

“The jurisdiction is one vested by the CCR but may properly

be said to be one that exists in any case heard on affidavit. It

is perhaps the default position in any case where the affidavit

evidence is evenly balanced, where there is a conflict on the

affidavits between the parties which cannot be or has not

been resolved by way of further affidavit, where the court

considers that a matter raised on affidavit, particularly one

raised in defence, might have such a bearing on the outcome

that its credibility deserves to be fully tested, or where a

judge considers that in the light of certain averments which

are credible, but not dispositive, it would be either difficult

or unfair to resolve the matter without giving both sides the

opportunity to further advance that evidence or, where

necessary, to test it. The adjudicative function is not a matter

of box ticking or a purely logical engagement with a

checklist of proofs that must be met by a plaintiff. Certain

evidential presumptions or burdens can make the task of

adjudication at times appear almost effortless, but the fact

remains that a judge met with evidence, whether contested

or not, must weigh that evidence, assess its veracity,

credibility, and importance for the purposes of proving those

matters that are required to be established. In a case where

the action is heard on affidavit, courts are vigilant to consider the option to adjourn the matter for plenary hearing. The vigilance derives from the fact that affidavit evidence of its nature is often in terms which have a tone of certainty which is not always found in oral testimony, particularly where that is cross-examined, and because the affidavits are often drafted by lawyers with a view to the legal test.”

15. I turn next to apply these principles to the circumstances of the present case.

(1). OWNERSHIP OF CHARGE

16. The first proof to be established by the moving party in an application under section 62(7) of the Registration of Title Act 1964 is that they are the registered owner of the charge. Here, Pepper Finance asserts that it is now the registered owner of a charge registered on Folio 143193F, County Dublin. The lands are known as 35 Cherry Orchard Avenue, Ballyfermot, Co. Dublin. The folio identifies Pepper Finance Corporation (Ireland) DAC as the owner of a charge for present and future advances repayable with interest. This entry is dated

3 March 2022.

17. Section 31 of the Registration of Title Act 1964 provides that the register shall be conclusive evidence of any right, privilege, appurtenance or burden appearing on the register. The Court of Appeal in Tanager DAC v. Kane [2018] IECA 352, [2019] 1 IR 385 held, inter alia, that the correctness of the register cannot be challenged by way of defence in summary possession proceedings, and that a court hearing an application for possession is entitled to grant an order at the suit of the registered owner of the charge, or his or her personal representative, provided it is satisfied that the plaintiff is the registered owner of the charge and that the right to possession has arisen and become exercisable. This decision has since been approved of by the Supreme Court in Bank of Ireland Mortgage Bank v. Cody (cited above). If and insofar as a defendant wishes to challenge the correctness of the register, it is necessary for them to institute separate proceedings against the Property Registration Authority of Ireland.

(2). OWNERSHIP OF UNDERLYING DEBT

18. Having established that Pepper Finance is the registered charge holder, it is necessary next to examine whether it has established the second essential proof, namely, that the “principal money” in respect of a debt secured by the charge has become due and owing.

19. The usual way in which a creditor establishes that the principal money secured by the instrument of charge has become due is to exhibit: (i) the loan agreement itself; (ii) the demand for repayment (if this is a prerequisite to the principal money becoming due and owing); and (iii) a statement of account which indicates that an event of default, which triggers the obligation to repay the principal money, has occurred and has not been remedied. There is then normally an affidavit confirming that the account is still in arrears as of the date the proceedings are issued. The exhibits in the present proceedings contain documentation of this type.

20. In the present case, the debt is said to arise under a series of four loan agreements entered into between IIB Homeloans and the defendant on various dates between November 2001 and September 2007. It has been explained in the grounding affidavit that IIB Homeloans changed its name to KBC Mortgage Bank on

24 October 2008. Thereafter, KBC Mortgage Bank transferred its banking business to KBC Bank Ireland plc on 26 February 2009 pursuant to a scheme of transfer approved under section 33 of the Central Bank Act 1971. A copy of the approval under S.I. No. 125 of 2009 has been exhibited.

21. The affidavit evidence establishes that the principal money owing under the respective loan agreements is due. More specifically, the defendant failed to make the monthly payments as due and this event of default triggered an entitlement on the part of the lender to demand early repayment of the principal and accrued interest. A formal demand was made on 17 September 2015. As of that date, the arrears stood at €39,039.31.

22. The complicating factor is that each of the four loan agreements was entered into with a different entity than that which is now the plaintiff in the proceedings. More specifically, the various loan agreements entered into by the defendant had been with IIB Homeloans (renamed KBC Bank). Typically, the way in which a subsequent purchaser of a debt establishes its ownership is to exhibit the relevant deed of transfer by which ownership of the debt is said to have been transmitted.

23. Here, Pepper Finance has exhibited a redacted deed entitled “Global Deed of Transfer (Excluding Property)” dated 4 February 2022 (“the deed”). The recitals to the deed have been blacked out in their entirety. It is apparent from the language of the deed that it is parasitic upon one or more other instruments. A number of terms in the deed are capitalised, indicating that they are defined terms. However, no definitions are set out in the deed itself. The relevant definitions are, presumably, contained in one or more other instruments, including the Mortgage Sale Agreement referred to at §2.1 of the deed.

24. It is not possible to determine the legal effect of the deed without sight of the other instrument or instruments. In particular, it cannot be ascertained whether the deed has effected a transfer of ownership of the debt said to be secured by the registered charge. This is because the operative clause of the deed refers to terms such as “Underlying Loan” without explaining how those terms have been defined. Presumably, these terms are defined under the earlier instruments, and the (redacted) recitals explain that those definitions apply to the deed.

25. If a party to litigation wishes to rely on a deed as establishing a particular proposition (here, that the ownership of the debt said to be secured by the registered charge has been transferred to Pepper Finance), then it is necessary for that party to exhibit the deed, and any supporting documents, in a form which is meaningful. Save insofar as it is necessary to protect the privacy of other borrowers who are not involved in the litigation, it will not normally be appropriate to redact any parts of a deed. At the very least, as a first step, the party should provide a detailed explanation, on affidavit, as to what type of information has been redacted and offer a justification for doing so. It is then a matter for the court to determine whether it is appropriate to admit the document in evidence subject to redactions, or whether, alternatively, the document must be disclosed in full.

26. Matters are further complicated by the assertion, not yet substantiated on affidavit, that Pepper Finance notified the defendant, on 13 August 2024, that there has been a further transfer to a company known as Penryn Funding 2004 DAC. Pepper Finance has not informed the court of such an onward transfer.

27. It is not appropriate for a party to attempt to summarise in a few lines of an affidavit what is undoubtedly a complex commercial transaction. In this connection, the following observations of the Court of Appeal in Pepper Finance Corporation (Ireland) Ltd v. Macken [2021] IECA 15 (at paragraph 12), albeit made in a different context, have some resonance:

“All members of this Court fully understand how, in the

course of preparing affidavits seeking to provide reasonably

clear explanations of complex transactions, details can be

omitted and that judgments are necessarily made as to what

it is, or is not, helpful to record on affidavit. Inevitably it

may happen that with hindsight those judgments might have

been made differently. However, in an application of this

kind a partial explanation of a transaction – however

complex it may be – should never be tendered, and the Court

should be advised properly of all key elements thereof. […]”

28. In summary, it is simply impossible for the court to interpret the deed of

4 February 2022 or to determine its precise legal effect. The court cannot be satisfied, therefore, on the basis of the documentation before the court that Pepper Finance is the holder of the debt said to be secured upon the registered charge. It cannot be said, at this time, that Pepper Finance is the party entitled to the principal money secured upon the registered charge.

29. It should be reiterated that this is not a case where minor redactions have been made to a deed on the grounds that same are necessary to protect the privacy of third parties whose debts are said to have been encompassed as part of a global transfer of assets. Nor is it a case where it has been asserted, on a reasoned basis, that certain information has been redacted on the grounds of commercial sensitivity (cf. Farrell v. Everyday Finance DAC [2024] IECA 16).

30. As matters currently stand, therefore, Pepper Finance cannot succeed in its application for an order for possession. That is not, however, an end of the matter. This court, exercising its appellate jurisdiction from the Circuit Court, has discretion pursuant to Order 5B of the Circuit Court Rules to direct that the matter be remitted to plenary hearing. The principles governing the exercise of this discretion have been set out authoritatively by the Supreme Court in Bank of Ireland Mortgage Bank v. Cody (cited above).

31. Whereas I am not satisfied that Pepper Finance has, as of yet, made out the proofs for an application for an order for possession, neither am I satisfied that the defendant has, as of yet, made out a defence on the basis that legal ownership of the underlying debt has not been transferred to Pepper Finance. The court cannot draw final conclusions, one way or the other, on the basis of the very limited evidence which has been put before the court by Pepper Finance. I have decided, therefore, that the interests of justice require that the matter be remitted to plenary hearing. This will allow the parties an opportunity to put in whatever further evidence they wish (whether oral or documentary). The court can then adjudicate on the matter on the basis of a complete set of evidence.

OTHER GROUNDS OF DEFENCE RELIED UPON

32. For completeness, it should be explained that the defendant has advanced a number of additional grounds of defence, over and above her challenge to Pepper Finance’s assertion that it holds the debt that is the subject of the registered charge. These grounds include, inter alia, the following.

33. First, it is alleged that the mortgage facilities had been negotiated and concluded away from KBC Bank’s premises. This is said to constitute a breach of Council Directive 85/577/EEC to protect the consumer in respect of contracts negotiated away from business premises. The defendant asserts that all the loan and security documents were brought to her home for signature by a broker; that she received no legal advice at the time; and that she could not comprehend the true meaning of the documents. The defendant relies, in particular, on the judgment of the Court of Justice in Crailsheimer Volksbank, Case C‑229/04, EU:C:2005:640. This judgment confirms that when a third party intervenes in the name of or on behalf of a trader in the negotiation or conclusion of a contract, the application of the Directive cannot be made subject to the condition that the trader was or should have been aware that the contract was concluded in a doorstep‑selling situation.

34. Second, it is alleged that the mortgage and underlying loan agreements are in breach of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (S.I. No. 27 of 1995) and in breach of Council Directive 93/13/EEC on unfair terms in consumer contracts. It is also alleged that there has been a breach of the Consumer Credit Act 1995, and, in particular, a failure to comply with section 129.

35. Third, it is alleged that the charged property has been and continues to be occupied by the defendant’s daughter (and partner), not by any person named by Pepper Finance. It is further alleged that Pepper Finance has purported to appoint a receiver and that the receiver’s agents have intimidated the occupants of the charged property. The defendant asserts that she has grounds for a counterclaim for trespass and emotional distress.

36. In circumstances where the proceedings have to be adjourned to a plenary hearing to allow Pepper Finance an opportunity to address, if it can, the shortcomings in its proofs, it is neither necessary nor appropriate to rule upon these additional grounds of defence on a summary basis. Rather, the matter will be remitted to plenary hearing without limiting the grounds upon which the defendant may seek to defend the proceedings.

37. Without in any way trespassing on the merits, it can fairly be said that the circumstances of the present proceedings are not straightforward. This is a case in which IIB Homeloans (KBC Bank) advanced no less than four loans to the defendant, each increasing her exposure to the bank. The circumstances in which these loans came to be negotiated are far from clear and would benefit from a plenary hearing. Similarly, the position in respect of the purported appointment of two separate receivers is unclear. As to Council Directive 93/13/EEC on unfair terms in consumer contracts, given that the court has an “own motion” obligation, it is preferable that this issue is also addressed as part of the plenary hearing rather than the court attempt to do so now on an incomplete set of facts.

CONCLUSION AND FORM OF ORDER

38. For the reasons explained herein, this appeal will be remitted to plenary hearing pursuant to Order 5B of the Circuit Court Rules. The plenary hearing will be before the High Court. (See Bank of Ireland Mortgage Bank v. Cody at paragraphs 110 to 113 of the reported decision).

39. It is important to reiterate that this judgment says no more than that the defendant has demonstrated, on the basis of the limited materials before the court to date, that there are credible grounds for defending the proceedings. The judgment does not say that any of the potential defences are necessarily strong. Rather, the point is that the legal and factual issues raised by the defendant are sufficiently weighty to preclude the case being determined in a summary or peremptory manner. It will be for the trial judge to decide the case on the basis of oral evidence and such further documentation as may be directed to be discovered.

40. The following timetable is prescribed for the exchange of pleadings and the making of discovery:

5 February 2026 Plaintiff to deliver points of claim

5 March 2026 Defendant to deliver points of defence and

counterclaim (if applicable)

26 March 2026 Reply to counterclaim (if applicable)

23 April 2026 Any requests for voluntary discovery to be served

41. This matter will be listed before me on 30 April 2026 at 10.30 a.m. for further directions and to address the issue of costs. The parties have liberty to apply in the interim.

Appearances

Keith Rooney for the plaintiff instructed by Joynt & Crawford LLP The defendant appeared in person