High Court dismisses appeal allowing Pepper Finance to substitute as plaintiff after loan book sale to Ulster Bank.

APPROVED [2026] IEHC 318

THE HIGH COURT

CIRCUIT APPEAL

2026 1 CA

BETWEEN

PEPPER FINANCE CORPORATION (IRELAND) DAC

PLAINTIFF

AND

PAUL O’BRIEN

CAROLINE O’BRIEN

DEFENDANTS

JUDGMENT of Mr. Justice Garrett Simons delivered on 21 May 2026

INTRODUCTION

1. This judgment is delivered in respect of an appeal from the Circuit Court. The order under appeal is an order substituting Pepper Finance Corporation (Ireland) DAC as plaintiff in lieu of Ulster Bank Ireland DAC (“the substitution order”). The substitution order was made pursuant to Order 22, rule 4 of the Circuit Court Rules.

PROCEDURAL HISTORY

2. Ulster Bank Ireland instituted these proceedings before the Circuit Court on

21 July 2021. The proceedings seek an order for possession of the lands comprised in Folio 48607F, County Kildare, on foot of a charge for present and future advances registered against that folio. The lands will be referred to as the “mortgaged lands” as convenient.

3. The proceedings had been adjourned from time to time before being adjourned generally on 27 February 2023 to facilitate engagement between the parties with a view to a resolution. Pepper Finance Corporation (Ireland) DAC (“Pepper Finance”) has since filed a motion, dated 23 April 2025, seeking to re-enter the proceedings with a view to having itself substituted as plaintiff. More specifically, the motion seeks an order, pursuant to Order 22, rule 4 of the Circuit Court Rules, substituting Pepper Finance as plaintiff in lieu of Ulster Bank Ireland DAC (“Ulster Bank”).

4. The motion is grounded upon an affidavit sworn on 25 March 2025 by Caroline Loftus. Ms. Loftus describes herself as a senior operations manager of Pepper Finance. Ms. Loftus deposes that the substitution application arises from the sale of a loan book by Ulster Bank to Pepper Finance, and that the facility and security the subject of the within proceedings have been transferred to Pepper Finance pursuant to a deed of transfer dated 3 November 2023. Ms. Loftus also exhibits a Form 56 said to have transferred the charge, and refers to the subsequent registration of Pepper Finance as owner of the charge on Folio 48607F on 29 April 2024.

5. The Circuit Court (His Honour Judge O’Sullivan) granted the substitution order on 4 December 2025. The question of costs was reserved to the trial of the action. The proceedings were then adjourned to the County Registrar’s Civil Motion list on 9 February 2026.

6. The defendants to the proceedings lodged a notice of appeal against the substitution order in early January 2026. The appeal came on for hearing before me on 13 April 2026. Mr. Paul O’Brien, the first defendant, appeared in person on his own behalf and that of his wife. Pepper Finance was represented by solicitor and counsel. I reserved judgment to today.

7. For completeness, it should be explained that the defendants make the objection that Pepper Finance did not comply with the timetable stipulated by Gearty J. for the exchange of written legal submissions. Pepper Finance was to have delivered its submissions to the defendants by 12 February 2026, with the defendants’ replying submissions to be served by 26 March 2026. On 26 March 2026, Pepper Finance sought and obtained an extension to 27 March 2026 on an ex parte basis. The defendants protest that the time available to them to deliver replying submissions had been compressed. I am satisfied that no unfairness has been caused by this. The defendants have not been confined to their written legal submissions. Rather, they were afforded ample time to advance additional arguments at the hearing on 13 April 2026. These additional arguments have been carefully considered in the preparation of this judgment.

LEGAL TEST FOR SUBSTITUTION APPLICATION

8. This matter has come before the High Court by way of an appeal from the Circuit Court. The High Court is thus exercising its statutory appellate jurisdiction under the Courts of Justice Act 1936. Accordingly, it is necessary to consider the relevant rule under the Circuit Court Rules.

9. The substitution application has been brought pursuant to Order 22, rule 4 of the Circuit Court Rules. The rule reads as follows:

“Where, by reason of the death, or bankruptcy, or any other

event occurring after the commencement of an action,

proceeding or matter, and causing a change or transmission

of interest or liability, or by reason of any person interested

coming into existence after the commencement of the action,

proceeding, or matter, it becomes necessary or desirable that

any person not already a party should be made a party, or that

any person already a party should be made a party in another

capacity, an order that the proceedings shall be carried on

between the continuing parties, and such new party or

parties, may be obtained ex parte on application to the Court

upon an allegation of such change or transmission of interest

or liability, or of such person interested having come into

existence.”

10. The interpretation of the equivalent provision of the Rules of the Superior Courts, i.e. Order 17, rule 4, has been considered in a number of judgments. The Court of Appeal addressed two aspects of the wording of the rule as follows in Stapleford Finance Ltd v. Lavelle [2016] IECA 104. First, it was held that the phrase “any other event”, in the opening sentence of the rule, included events such as the assignment of loans and a chose in action. An “event” is not confined to an extraneous event (such as death or bankruptcy) but also embraces an event such as a contract for the sale of loans and mortgages.

11. Secondly, it was held that the phrase “change … of interest” was not confined to an interest in land but embraced an assignment of a chose in action. It was further held that there was no distinction in this regard between the assignment of a chose in action and the assignment of an existing cause of action. The Court of Appeal held (at paragraph 20) that the legislative intent of the Supreme Court of Judicature Act (Ireland) 1877 would be defeated if it were not possible to substitute the assignee as a party:

“Since the Supreme Court of Judicature Act (Ireland) 1877 it

has been possible legally to assign a chose in action. The

intent of the statute is to do away with the formal necessity

of joining the assignor in any proceedings brought by the

assignee to enforce the chose in action. The legislative intent

is defeated if the rules of court do not provide for of the

substitution of the assignee of the chose in action as plaintiff

in proceedings commenced by the assignor. […]”

12. At a later point in the judgment, the Court of Appeal observed that a requirement for an assignee to have to commence new proceedings (as opposed to its being made a party to existing proceedings taken by the assignor) could lead to very considerable wasted time, effort and expense. It could also present difficulties in respect of the Statute of Limitations.

13. The question of whether Order 17, rule 4 can be invoked in proceedings seeking the recovery of lands by way of an order for possession has been expressly considered in Danske Bank v. Macken [2018] IEHC 356, [2019] 1 IR 677 (upheld by the Court of Appeal in [2021] IECA 15) and Permanent TSB v. Doheny [2019] IEHC 414. In each instance, the High Court accepted that it is open to the transferee under a deed of transfer to apply to be made a party to possession proceedings which had previously been instituted by the transferor.

14. The nature and extent of the evidence which must be adduced in support of an application under Order 17, rule 4 has also been addressed in the case law. The leading judgment remains that of the High Court (Kelly J.) in Irish Bank Resolution Corporation v. Comer [2014] IEHC 671. The judgment was delivered in respect of an application by the purchaser under the sale of a bank’s loan book to be substituted as plaintiff in existing proceedings. The sale was characterised as an assignment of a chose in action for the purposes of section 28 of the Supreme Court of Judicature Act (Ireland) 1877. Crucially, the application had been made prior to the substantive hearing of the proceedings. The High Court held that the legal test for such an interlocutory application is whether there is prima facie evidence that there has been (i) a valid sale of the underlying assets; (ii) a valid assignment of the chose in action; and (iii) a valid notice given. It was not necessary for the court to adjudicate, at that juncture of the proceedings, on the efficacy or validity of the assignment or the efficacy or validity of the notice. Those were matters to be determined at the substantive hearing.

15. The threshold governing a substitution application has been considered more recently by the Court of Appeal in Pepper Finance Corporation (Ireland) Ltd v. Macken [2021] IECA 15. Murray J. confirmed, at paragraphs 22 to 26 of his judgment, that what is required at the substitution stage is the production of prima facie evidence capable of substantiating the applicant’s claim that it has acquired legal title to the assets in question sufficient to maintain the action. The court is not required, on an application of this nature, to resolve conflicts in the evidence or to determine the merits of competing accounts of the underlying transaction; such matters are for the ultimate determination of the trier of fact at trial. Rather, the inquiry is confined to whether the material adduced is sufficient, if accepted, to permit the claim to proceed. In that sense, and adopting the formulation of Murray J. that the test may be “usefully aligned” with other procedural thresholds, the exercise is analogous to that undertaken on an application to dismiss: the court is concerned not with whether the applicant will ultimately succeed, but with whether it has adduced a sufficiently cogent basis upon which it should be permitted to advance its claim.

16. The standard of proof is, however, materially different where the substitution application is made after the substantive hearing. This is because there will, by definition, be no further hearing at which the issues can be ventilated. Put shortly, in such cases the efficacy or validity of the assignment will have to be considered on the substitution application itself. The position is explained as follows by the Court of Appeal in McDermott v. Ennis Property Finance DAC [2019] IECA 142 (at paragraph 37):

“Where, as in the present case a substitution application is

made after judgment has been granted, and where therefore

there is no opportunity at trial to raise any issues in relation

to the proofs adduced in support of the application, it seems

to me that the prima facie test referred to by Kelly J. in

IBRC v. Comer is not the correct test. In such cases the

correct test is that applicable in civil proceedings generally,

namely on the balance of probabilities. The evidence will

nonetheless be adduced in the normal way in such

applications by affidavit, and if necessary any deponent may

be cross-examined on their affidavit as provided for by the

Rules of the Superior Courts. But such applications remain

purely procedural in nature, and there can be no question of

such an application becoming in the nature of a mini-trial.”

17. In summary, the case law posits two distinct standards of proof. Where the substitution application is made prior to the substantive hearing, the moving party must adduce prima facie evidence capable of substantiating the claim that it has acquired legal title to the assets in question sufficient to maintain the action. Where the application is made after judgment has been entered, or otherwise at a point at which the defendant would have no further opportunity to challenge the assignment, the standard rises to the balance of probabilities. The choice between the two standards is dictated not by the form of the order sought but by the question of whether the defendant retains the opportunity to challenge the assignment at a subsequent stage of the proceedings.

DISCUSSION AND DECISION

18. The substitution application has been made prior to any substantive hearing of the possession proceedings. Accordingly, the application is subject to the prima facie threshold described in Comer and confirmed in Macken.

19. Mr. O’Brien, the first defendant, urged upon me that the standard ought to be a higher one, and that the heavily abbreviated form in which Pepper Finance has chosen to put forward the underlying transactional documentation warranted close scrutiny.

20. With respect, the standard of proof on a substitution application is not a function of the strength or weakness of any particular piece of evidence relied upon by the moving party. Rather, it is a function of the stage of the proceedings at which the application is made and the existence (or otherwise) of a further opportunity at which the defendant can ventilate its objections. Here, the defendants will have an opportunity to reagitate these issues at the substantive hearing.

21. Before turning to consider whether Pepper Finance has satisfied the prima facie evidence threshold, it is salutary to pause to consider the nature of the proofs which will have to be established, on the balance of probabilities, at the substantive hearing. The essence of the claim advanced in these proceedings is that the underlying debt, which has been secured by way of a charge registered against the mortgaged lands, has become due. The party seeking to pursue proceedings of this type—whether the original plaintiff or a substituted plaintiff—must ordinarily establish two things. First, that it is the registered owner of the charge, and, secondly, that the underlying debt (otherwise, the “principal money”) has become due.

22. As an aside, it should be noted that Pepper Finance has indicated, through counsel, that it intends to advance the novel argument at the substantive hearing that it may not be necessary to establish that the principal money is payable to the substituted plaintiff. It may be sufficient that same has become due to the original plaintiff. Pepper Finance relies on section 64(4)(b) of the Registration of Title Act 1964 to assert that, upon registration as owner of the charge, it enjoys the same rights and powers of enforcement as if the charge had originally been created in its favour. On this analysis, it submits that it is entitled to maintain and continue the possession proceedings in place of Ulster Bank.

23. It is unnecessary for me to say anything further in relation to these arguments now, in circumstances where I am satisfied that there is prima facie evidence that the underlying debt has been transferred to Pepper Finance. Put otherwise, for Pepper Finance to succeed on the substitution application, it is not necessary to go beyond the conventional analysis outlined at paragraph 21 above. Pepper Finance does not have to be correct in its more ambitious arguments.

24. The first of the two conventional proofs, namely that the substituted plaintiff is the registered owner of the charge, is usually the more straightforward. The application will usually be grounded on a copy of the relevant folio which identifies the substituted plaintiff as the registered owner. 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 [2021] IESC 26, [2021] 2 IR 381.

25. The second proof, namely that there has been a transfer of the underlying debt to the substituted plaintiff, can be more problematic. This is especially so in circumstances where, as in the present case, the transfer has been achieved, if at all, by a complex commercial transaction involving the nomination of a third party to take the legal title under a deed between other parties. Matters are further complicated by the practice of exhibiting heavily redacted versions of the contractual and conveyancing documentation said to give rise to the transfer. In other instances, all that is exhibited is a short deed which is parasitic on an earlier deed for its legal effect and definitions. In the event of a dispute as to the legal effect of the deed which has been exhibited, it might seem inevitable that it will be necessary to have sight of the other deed. (cf. Pepper Finance Corporation (Ireland) v. O’Reilly [2026] IEHC 16).

26. The evidential position in relation to a substitution application is different. This is because the evidential threshold is lower. The court may well be prepared to accept, at this preliminary stage, documents in a form which might not ultimately meet the higher threshold at the substantive hearing.

27. For the reasons which follow, I have concluded that the lower threshold has been met in the present proceedings.

28. First, the evidence before the court establishes to the prima facie standard that Pepper Finance has succeeded to Ulster Bank’s interest in the charge which it is sought to enforce. Folio 48607F, County Kildare shows, at Part 3, the following entries. Entry No. 2, dated 20 January 2006 records a charge for present and future advances repayable with interest in favour of Ulster Bank Ireland Limited.

Entry No. 3, dated 29 April 2024 records that Pepper Finance Corporation (Ireland) Designated Activity Company is the owner of the charge registered at Entry No. 2.

29. The defendants make the objection that the deed of mortgage, upon which Ulster Bank’s original title was derived according to them, describes the lands by reference to Folio KE25134F, whereas the charge which it is sought to enforce is registered against Folio 48607F.

30. In reply, counsel for Pepper Finance draws attention to the fact that there is a note to Folio 48607F which states as follows: “From Folio KE25134F”. Counsel submits that this note, taken with the further entries on the folio, indicates that Folio 48607F was at some point carved out of, or otherwise derived from, Folio 25134F. This explanation more than satisfies the prima facie threshold. It is not unusual for a charge originally registered against a parent folio to follow some portion of the registered land when that portion is brought onto a new folio. If the defendants wish to dispute that this is, in fact, what happened in respect of the lands the subject of the within proceedings, they will have an opportunity to do so at the substantive hearing.

31. The evidence put before the court establishes, to a prima facie standard, that there has been a sale of the underlying loans from Ulster Bank to Pepper Finance. The grounding affidavit deposes that the substitution application arises from the sale of a loan book by Ulster Bank to Pepper Finance, and that the facility and security the subject of the within proceedings were included in that sale. A deed dated 3 November 2023 has been exhibited entitled “Irish Law Deed of Transfer (Excluding Property)” executed by Ulster Bank, as seller, and Pepper Finance, as buyer. The operative clause of that deed records that the seller, “as legal and beneficial owner, free from Encumbrances and as the registered owner or, as applicable, the party entitled to be registered as owner, hereby unconditionally, irrevocably and absolutely grants, conveys, assigns, transfers and assures unto the Buyer”, all of the seller’s right, title, interest and benefit (past, present and future) in and under each underlying loan listed in the schedule, each mortgage asset and each finance document.

32. Although the schedule to the deed has been very heavily redacted, the defendants’ loan accounts are identified on the affidavit by reference to specific account numbers.

33. It does appear, as submitted by the defendants, that the exhibited deed of transfer is parasitic upon two other instruments, namely a mortgage sale deed dated

25 July 2023 (entered into between Ulster Bank and a Cayman Islands company, CVI CVF V Cayman Finance Corporation) and a deed of novation dated

9 August 2023 (whereby Elmscott Property Finance DAC, “Elmscott”, was substituted for the Cayman company as a party to the mortgage sale deed). It is recited that, pursuant to the terms of the mortgage sale deed, Elmscott has appointed Pepper Finance to be the legal title holder of the mortgage assets. Recital C expressly imports the definitions used in the mortgage sale deed into the deed of transfer. It follows that—in the event of a contest at trial as to its true meaning and legal effect—the deed of transfer cannot be read or interpreted in isolation. Neither the mortgage sale deed nor the deed of novation has yet been adduced in evidence.

34. However, the court hearing the substitution application is not required to resolve this issue. It is sufficient to the purpose that there is evidence of a transfer. In this connection, the deed of transfer of 3 November 2023 is itself, on its face, an instrument purporting to transfer all the seller’s right, title and interest in the mortgage assets to the buyer. Whatever may be the precise contractual mechanics established by the mortgage sale deed and the deed of novation, the deed of transfer itself contains language which, on its face, is apt to effect an assignment. Coupled with the formal registration of Pepper Finance as owner of the charge, I am satisfied that the transfer is established at the prima facie level.

35. The grounding affidavit avers that the defendants were notified, by letter, of the transfer of their loan and security to Pepper Finance. The defendants did not, in their replying submissions or in oral argument, deny receipt of such notification, although they did question its terms. For the purposes of the prima facie standard, the evidence of valid notice is sufficient. Whether the notice is ultimately to be regarded as effective notice for the purposes of section 28(6) of the Supreme Court of Judicature Act (Ireland) 1877 is a question which can be agitated at the substantive hearing.

CONCLUSION AND PROPOSED FORM OF ORDER

36. For the reasons set out above, Pepper Finance has met the prima facie threshold described in Comer and confirmed in Macken. The appeal against the substitution order will, accordingly, be dismissed. The order of the Circuit Court of 4 December 2025 will be affirmed. The proceedings will be carried on, as between Pepper Finance, as the substituted plaintiff, and the original defendants. The costs of the appeal will be costs in the cause. Whereas Pepper Finance has succeeded in the substitution application, it has done so by reference to the modest threshold of prima facie evidence. It may yet transpire that the court of trial will not be satisfied that the requisite proofs for an order for possession have been made out.

37. It should be reiterated that nothing in this judgment is to be taken as a final determination of the efficacy or validity of the assignment, the transfer of the loan facility, the transfer of the charge or the transfer of the within proceedings to Pepper Finance. Nor does this judgment determine whether the notice given to the defendants is effective notice for the purposes of section 28(6) of the Supreme Court of Judicature Act (Ireland) 1877. Those questions remain, in their entirety, for the substantive hearing in the Circuit Court.

Appearances

Rudi Neuman for the plaintiff instructed by Mason Hayes & Curran LLP The first defendant appeared in person