On the 20th of March 2024, the Circuit Court Rules Committee formally amended the previous provisions of Order 36 Rule 9 and Order 36 Rule 10 of the Circuit Court Rules to remove the longstanding reference to the 12-year limit regarding the enforcement of Court Orders.
This is a significant development that will have major consequences for financial institutions regarding the amount of time that they may have available to enforce an Order for Possession that has been made by the Circuit Court against respective borrowers.
The Old Rules: Pepper v Doyle
As affirmed by the recent High Court decision of Pepper v Doyle, [2023] IEHC 662, the previous wording of Order 36 Rule 9 and Order 36 Rule 10 provided that an Order for Possession made within the jurisdiction of the Circuit Court remained in force for a 12-year period. The previous rules stated that:
Rule 9: “Every decree of the Court, and every judgment in default of appearance or defence, shall be in full force and effect for a period of twelve years from the date thereof, and an execution order based on any such decree or judgment may be issued in the Office within the said period, but not after the expiration of six years from the date of such decree or judgment without leave of the Court. An application for such leave shall be made by motion on notice to the party sought to be made liable.”
Rule 10: “If, at any time during the period of twelve years, any change has taken place, by death, assignment or otherwise, in the parties entitled or liable to execution, the party claiming to be so entitled may apply to the Court on notice for leave to issue execution, and the original decree or judgment may be amended so as to give effect to any order made by the Court on the application.”
This previous position did not allow for any attempts at engagement by financial institutions or any moratoriums on enforcement of security to be taken into account and once the 12-year period had passed, any Orders for Possession made by the Circuit Court simply became unenforceable.
The New Rules: Start v Hendrick
However, as per Statutory Instrument, S.I. No 107 of 2024, the above provisions have been amended and the reference to the 12-year rule has been removed to now state as follows:
Rule 9: “An execution order based on any decree of the Court or judgment in default of appearance or defence may be issued in the Office within six years from the date of such decree or judgment. After the expiration of six years from the date of such decree or judgment, an execution order may be issued with the leave of the Court. An application for such leave shall be made by motion on notice to the party sought to be made liable.
Rule 10: “If, at any time after the making of a decree or judgment in default referred to in rule 9, any change has taken place, by death, assignment or otherwise, in the parties entitled or liable to execution, the party claiming to be so entitled may apply to the Court on notice for leave to issue execution, and the original decree or judgment may be amended so as to give effect to any order made by the Court on the application.”
Importantly, the new Circuit Court rules also establish consistency with the current High Court position on this matter as per the decision of Start v Hendrick [2023] IEHC 11, which clarified that Plaintiffs who had not executed Orders as per the 12-year period set out in Section 11 (6) (a) of the Statute of Limitations Act 1957, were not precluded from seeking leave to execute an Order for Possession despite the expiry of the 12-year limitation period.
Welcome Development
The recently amended Order 36 Rule 9 and Order 36 Rule 10 of the Circuit Court Rules is a welcome development in the area of Mortgage Litigation.
The new rules strike a balancing act between allowing borrowers in financial difficulty who have been subject to Orders for Possession against their property, sufficient time to achieve resolution. They also remove the potentially punitive 12-year element contained in the previous rules for financial institutions in enforcing their security who may have been unfairly prejudiced for attempting engagement with borrowers or by reason of moratoriums such as those imposed by the Covid-19 pandemic.
Conclusion
It is anticipated that the new rules will create a more balanced regime which has the effect of encouraging financial institutions to engage with borrowers instead of prematurely proceeding with execution due to time constraints. It also provides fairer provision for the enforcement of securities in circumstances where attempted engagement from such institutions has not been reciprocated by the relevant borrowers and / or where there have been external factors which have prevented the financial institution from enforcing their security.
The above is of course subject to the crucial caveat that the delay in executing such Orders is adequately explained by the respective financial institution once the initial 6-year period for execution (during which leave of the court to execute Court Orders is not required) has passed.
Further Information
For further information on mortgage litigation or any related matters, please contact Georgina Lanigan or Kevin O’Keeffe, Solicitors in our Asset & Debt Recovery Team.
