Background

In Tanager V Kane, Bank of Scotland (Ireland) Limited (“BOSI”) had been the registered owner of a charge over the defendant’s home in the Property Registration Authority. In 2010 all assets and liabilities of BOSI were transferred to Bank of Scotland Plc (“BOS”) following a cross border merger pursuant to the European Communities (Cross – Border Mergers Regulations) 2008 and related UK legislation. Following the merger, BOSI was automatically dissolved by operation of law.

Later, BOS sold a portfolio of secured loans, which included security over Kane’s home, to Tanager, a fund owned by a US private equity house that bought Bank of Scotland mortgages. Tanager was subsequently registered as owner of that charge. However, prior to the transfer to Tanager, BOS had not been registered as owner of the charge (it remained registered in the name of the now dissolved BOSI).

Issue before the Circuit Court

Kane had ceased repaying his mortgage and had fallen into significant arrears. Tanager as registered charge holder sued Kane seeking possession. Kane challenged Tanager’s entitlement to rely on its registered ownership of the charge because BOS were not the registered owner.

The Circuit Court dismissed Tanager’s application for possession on the basis that as BOS were never the registered owner of the charge on the folio it was not entitled to transfer the charge to Tanager.

The High Court Decision

The matter was referred to the High Court and in the High Court Mr. Justice Noonan confirmed that Kane had raised a legitimate question which could potentially affect hundreds of cases. In the circumstances, Noonan J., stated he would like the questions to be determined by the Court of Appeal.

The Court of Appeal Decision

In the Court of Appeal, Ms. Justice Baker held that under the relevant provisions of the Registration of Title 1964 Act BOS as the party entitled to be registered as owner of the charge on the folio was entitled to pass that interest to Tanager without first having to register itself as owner on the folio. She also found that Kane had no grounds to challenge the conclusiveness of the folio which evidenced Tanager as being validly registered as owner of the charge over Kane’s family home. In reaching the decision, it was noted that under the 1964 Act there are certain powers and rights exercisable by a charge holder which do require registration, however in the circumstances, on which the business of BOSI had merged with and transferred to BOS, the entitlement of BOS to pass its interest to Tanager was not one of them.

Conclusion

Judgment having been given on the questions which had been referred to the Court of Appeal by way of case stated it is now a matter for the High Court to determine the appeal of the original Circuit Court decision.

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