Debt Problems | Bankruptcy Property Law

Lay litigant succeeds in having Circuit Court order for repossession quashed by the High Court

A Wexford woman succeeded in the High Court with an application to set aside a Circuit Court order for possession of the family home.

In February 2019 the Circuit Court in Wexford was satisfied that the papers and proofs were in order and granted the order for possession to the lender. Ms Cody claimed that the original mortgage had been entered in her name without her knowledge or consent.

She also claimed her husband had witnessed her signature in her absence and colluded with the lender bank. As a consequence of these allegations she claimed that the mortgage was invalid and any order flowing from that mortgage, for example for possession, was also invalid.

The High Court agreed with her and quashed the Circuit Court order.

The lender bank made a number of mistakes which led to this High Court decision. The first was the bank’s failure, by way of its affidavits, to deal with the issues raised by Ms Cody. Secondly, it failed to explain the issues raised and failed to reply to Ms Cody’s allegations. Finally, it did not cross examine Ms Cody in the Circuit Court with the purpose of establishing her indebtedness. It followed from this that this matter could not be rectified in the High Court at the appeal stage and the finding of indebtedness of Ms Cody could not be established to the High Court’s satisfaction.

High Court decision

The High Court held that the bank had failed to establish her indebtedness and had failed to prove she had executed the mortgage. For this reason it quashed the Circuit Court order.

What the bank needed to do to succeed was to

  1. Prove due execution of the mortgage by Ms Cody
  2. Cross examine Ms Cody in the Circuit Court to establish indebtedness

It did neither of these things.

The bank sought to have the High Court remit the case back to the Circuit Court to be reheard by plenary hearing. The High Court saw this as an audacious application to have a case which was already decided reheard. It said such an action would be “an affront to the proper administration of justice”,

With respect, this refined position simply serves to expose the audacity of the bank’s application. The bank, having failed in its proceedings for an order for possession because it came up short in the requisite proofs, now wishes to rewind the clock to the
very start of the proceedings. It wishes to rerun its application before the Circuit Court, on the basis of new evidence, with a right of appeal thereafter to the High Court. In effect, the proceedings before the Circuit Court and the High Court to date would be set at naught, and Ms Cody would be dragged through the courts a second time. Such a
result would be an affront to the proper administration of justice

High Court, February 2020

To rub salt into the wounds of the bank Ms Cody the High Court made an order allowing Ms Cody, a litigant in person, to recover her expenses of the proceedings in the Cirucit Cout and the High Court as against the bank.

Read the full decision in Bank of Ireland Mortgage Bank v Peter Cody and Heather Cody [2020] IEHC 99

Property Law Property Purchases and Sales

Capital Gains Tax on Property Sales-the Essentials

Capital Gains Tax (CGT) arises when there is a chargeable gain on the disposal of an asset. CGT is calculated on the gain on the disposal of an asset.

For example, if you buy a house for €150,000 in 2011 and sell for €195,000 in 2020 the tax is charged on the gain of €45,000. You will have certain expenses which you are allowed to write off, and you may have a tax exemption you can avail of, too-for example, principal private residence relief.

The capital gains of a company are generally, but not always, charged to corporation tax.

The disposal of an asset includes:

  1. The sale of an asset
  2. The gift of an asset
  3. A part disposal
  4. The setting up of a trust

Allowable deductions in calculating your capital gain

Allowable deductions include

  1. The cost of the asset together with the costs of acquisition
    This would include stamp duty in the case of property, legal fees, auctioneering fees.
  2. The amount of capital expenditure spent on the asset.
    This would include the cost of improvements to the asset-for example, an extension to the property.
  3. The costs of making the disposal.
    This would include solicitor’s fees, auctioneer’s fees, and any other incidental costs in respect of the disposal.

The multiplier

CGT was introduced in 1975 and a table containing a multiplier was introduced to take into account the effect of inflation on assets and had the effect of increasing the base cost of the asset. After 1st January 2003 indexation is not allowed for acquired assets.


Capital losses can be used to offset gains and unused losses can be carried forward to later years.

Annual exemption

Individuals have an annual exemption which can be deducted from the gain before calculating the appropriate tax. This annual exemption, or any unused portion, cannot be carried forward to later years. In 2020 the annual exemption is €1,270.00.

The rate of CGT in Ireland is 33% for most gains.

Capital Gains Tax Computation

Proceeds of sale/disposal xxxxxxx


Cost of asset (xxx)

Cost of acquisition of asset (xxxx)

Enhancement expenditure on asset (xxxx)



Allowable losses (xxx)

Annual exemption (xxx)



Note: if the asset was purchased before 1st January 2003 indexation will be allowed in calculating the cost of the asset, cost of acquisition, and enhancement expenditure, if any.

Voluntary transfers

For the purposes of CGT a voluntary transfer is a “disposal” and may give rise to a CGT liability. The cost of the asset will be the market value at the time of transfer.

Part disposals

CGT also applies to part disposals.

The formula for calculating the cost of the part which was sold is as follows:

Total cost of asset X Sale proceeds/Sales proceeds plus market value of the retained portion

For example, asset cost €200,000 and part was sold for €150,000 and the unsold part is valued at €100,000


So, €120,000 is the cost of the  part disposal. 

Therefore the capital gain is €150,000-€120,000=€30,000.

Development land

Development land (land whose market value exceeds its use value), from the perspective of CGT, has had special rules and a company must pay capital gains tax on such disposals, not corporation tax. Indexation Relief applies only to the current use value at the time you became the owner. The development value (current use value deducted from the market value) is an allowable expense but cannot be indexed.

There is no CGT on wasting chattels-that is, an asset that has a predicted life of less than 50 years. A lease, however, does not qualify for the exemption. Compensation and winnings are also non-chargeable gains.

CGT Reliefs

  1. Principal private residence relief
    There is no CGT on the disposal of your principal private residence including grounds up to 1 acre. the house must have been occupied as her main or only residence throughout the period of ownership. There are periods of deemed ownership-for example, you may have been working abroad.
  2. Dependent relatives and principal private residence
    If a dependent relative has been occupying your house, rent free and with no consideration, there is a relief available.
  3. Transfer of a site to a child
    The market value of the land being transferred must not exceed €500,000 and the site’s size must not exceed 1 acre. The purpose of the transfer must be for the child to build a dwelling and the child must occupy the property as his principal or only residence. Failure to comply with these requirements may result in a clawback of the relief and a CGT liability.
  4. Credit of CGT against CAT
    In an inter vivos transfer there is a relief which allows the person paying CAT/gift tax to reduce the amount of CAT payable by the amount of CGT paid by the donor/disponer/person making the gift.
  5. Inter vivos disposal between spouses
    No CGT arises from a transfer between spouses provided they are living together.
  6. Assets passing on death
    There is no charge on the estate of a deceased person where the assets of the deceased pass on his/her death.
  7. Settled property
    There are two reliefs which trustees might avail of: i) principal private residence relief ii) retirement relief
  8. Disposal of business or farm (“retirement relief”)
    Where an individual disposes of his business or farm to his children there may be “retirement relief”, provided the value of the assets does not exceed €750,000 or €500,000. The qualifying criteria are that a) it must be an individual b) over 55 years c) he is disposing of qualifying assets
  9. Disposal of business to a company
    This arises where an unincorporated business is transferred to a company; there is a deferral of the tax payable on the amount of the consideration for the transfer taken in the form of shares in the company.


Always obtain tax advice if you are buying or selling property because the consequences of mistakes in respect of capital taxes such as capital gains tax and capital acquisitions tax can be costly.

Property Law

Buying a House in Ireland-Kindle Book Promotion

I am starting a Kindle Countdown Deal price promotion starting at 8 am, Sunday 2nd August on my property book, “Buying a House in Ireland: A Step by Step Guide by a Builder/Solicitor”.

For a limited period of time the price of this book, “Buying a House in Ireland: A Step by Step Guide by a Builder/Solicitor” will be slashed to less than £1. It will cost just £0.99.

I have been buying and selling property in Ireland since 1986 so I have a good handle on what to look for and what to avoid when it comes to property.

And I have just updated the book with new material including

-Help to Buy relief, statements made outside the contract, deed of confirmation for gifts, how to negotiate successfully, buying in Ireland from abroad, buying for cash, what happens on closing day.

The promotion starts on Sunday morning and lasts for only 3 days and ends on 5th August 2020. 

Then over the few days it will go to £1.99, then £2.99, then £3.99 until it reverts to the regular price on 5th August at £9.99.

It’s a good deal and this book sells well anyway.

But Amazon lets authors promote their book every 6 months with a Countdown deal like this and it is very effective.

You can learn more about the book here.

To be honest the main reason I am doing this promotion is to get reviews for the book, which I have just updated. So if you buy one I would appreciate if you left an honest review on


Property Law

Beware of the Representations Made to You in the Lead Up to Signing a Property Contract

Are you thinking about buying a property? Or a business?

If you are, you need to be cautious and vigilant about the statements you are tempted to rely on, and who is making those statements.

Let me explain.

I act for large numbers of people who are buying (or selling) property. When I meet the purchasers or speak to them on the phone they frequently tell me “the auctioneer said” or “the developer said” or “the seller said”.

I have to tell them to ignore, or at the very least treat with a great deal of caution, these statements because from a legal perspective they cannot rely on them. Because invariably when the auctioneer’s sales advice note issues or when the contract is issued by the vendor’s solicitor there will be disclaimers and conditions along the lines that the purchaser cannot rely on any statement outside of the written contract of sale.

And that the contract contains the entire agreement between the purchaser and vendor.

In other words, the vendor’s solicitor will go to the trouble in many cases of inserting a special condition similar to the following:

Entire Agreement and Representations

  1. The purchasers agree and accept that no statement or measurement contained in any brochure or advertisement issued by the Vendor or any agent on behalf of the Vendor relating to the Subject Property shall constitute a representation inducing the Purchasers to enter into the sale or any warranty forming part of this Agreement.
  2. Any statement, description or measurement contained in in any such particulars or in any verbal form given by or on behalf of the Vendor is for illustrative purposes and are not to be given as matters of fact.
  3. Any misstatement or omission or mis-description or incorrect information given verbally or in form of any printed particulars by any person on the Vendor’s behalf shall not give rise to any cause of action claim or compensation or to any right of rescission under this Agreement.
  4. The Purchaser shall have no right of action against any agent, employee or any person whatsoever connected directly or indirectly with the Vendor whereby any mistake, omission, discrepancy, innaccuracy, misstatement or misrepresentation may have been published or communicated to the Purchaser during the course of any representation or negotiation leading up to the sale.
  5. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and extinguishes any representations or warranties (if any) previously given or made accepting those contained in the Agreement and no variation shall be effective unless agreed and signed by the parties or by some person duly authorised by each of them.

You will also note that the sales advice note from the auctioneer/estate agent will be “subject to contract/without prejudice/contract denied” which is an indication that you will only be able to rely on what is contained in the contract or is clarified/confirmed between the solicitors as they negotiate a binding contract.

It can be a struggle for the solicitor to temper the enthusiasm of the inexperienced purchaser because they will assume what is being said to them by the agreeable vendor or estate agent can be relied on. Maybe it can, maybe it cannot and if there is a dispute you will need to look to the written agreement between the parties to see exactly where you stand.

And the written agreement between the parties is the Law Society Standard Conditions of Sale 2019 edition.


11. (a) The Purchaser Accepts the evidence of identity as may be gathered from the documents specified in the Documents Schedule. The Vendor confirms that he has furnished to the Purchaser such information as is in his possession relative to the identity and extent of the Subject Property, but the Vendor is not and shall not be required to define exact boundaries, fences, ditches, hedges or walls or to specify which (if any) of the same are of a party nature, and the Vendor is not and shall not be required to identify parts of

the Subject Property held under different titles.


13. The Vendor confirms that he has disclosed before the Date of Sale, in the Particulars the Special Conditions or otherwise, all easements, rights, reservations, exceptions, privileges, covenants, conditions, restrictions, rents, taxes and other liabilities (not already known to the Purchaser or apparent from inspection) which are known by the Vendor to affect the Subject Property and are likely to affect it following Completion.

14. Subject to General Condition 13, the Purchaser Accepts that the Subject Property is sold and the Purchaser shall be deemed to buy:

(a) with full notice of the actual state and condition of the Subject Property and

(b) subject to (i) all Leases (if any) mentioned in the Particulars or in the Special Conditions and (ii) all easements, rights, reservations, exceptions, privileges, covenants, conditions, restrictions, rents, taxes, liabilities, outgoings and all incidents of tenure affecting the Subject Property (each a “Relevant Provision”) and

(c) notwithstanding any partial statement or description of the Lease or the Relevant Provision in the Particulars or in the Special Conditions or in any document specified in the Documents Schedule.


I hope you see from these conditions in the contract for the sale of property are sufficient to cast aside any warranty or representation that was made in the run up to the binding contract coming into effect.

And that you simply cannot rely on these statements, no matter how well intentioned or helpful or clarifying they were intended to be.

Debt Problems | Bankruptcy Property Law

Did Lease Granted by Borrower Prevent AIB From Securing Possession of D4 Property?

differential costs order

AIB granted a loan to Richard Finbarr Fitzgerald and the parties entered into a mortgage contract. The 1995 mortgage, registered in the Registry of Deeds, was secured on a flat in Dublin 4 and the bank now sought an order for possession.

However, there was a problem.

Fitzgerald had gone bankrupt in January 2020 but had previously granted a 35 year lease on the flat to Ms Daly in 2002. The question then arose in this case as to whether this lease was void as against the bank and they could go ahead and recover possession, or did this lease snooker the bank and prevent repossession.

The bank were seeking to recover a debt outstanding from a loan granted in 2015.

The bank’s position was that Fitzgerald needed the consent in writing of the lender if he was going to grant a lease on the property, pursuant to the 1995 mortgage which states

“The Mortgagor shall not be entitled without the consent in writing of the Bank to exercise the powers vested in him by section 18 of the said Conveyancing Act of 1881 so long as any moneys shall remain unpaid on this present security.”

It is worth noting that the Land and Conveyancing Law Reform Act 2009 changed the law in this area, specifically section 112 which states:

112.— (1) A mortgagor of land, while in possession, may, as against every other incumbrancer, lease the land with the consent in writing of the mortgagee, which consent shall not be unreasonably withheld.

[CA 1881, s. 18][CA 1911, s. 3]

(2) A lease made without such consent is voidable by a mortgagee who establishes that—

(a) the lessee had actual knowledge of the mortgage at the time of the granting of the lease, and

(b) the granting had prejudiced the mortgagee.

(3) A mortgagee of land while in possession or, after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver, may, as against all prior incumbrancers, if any, and the mortgagor, lease the land provided—

(a) it is for the purpose of—

(i) preserving the value of the land, or

(ii) protection of the mortgagee’s security, or

(iii) raising income to pay interest due under the mortgage or otherwise reduce the debt,


(b) it is otherwise an appropriate use of the land pending its sale, or

(c) the mortgagor consents in writing, or

(d) the court in any action relating to the mortgaged land makes an order permitting such lease.

(4) In this section “ mortgagor” does not include an incumbrancer deriving title from or under the original mortgagor.

(5) The power of leasing conferred by this section applies only to mortgages created after the commencement of this Part.

However, the contractual position between Fitzgerald and the bank, as a consequence of the mortgage entered into between the parties, could not be retrospectively amended by the 2009 act as this act was not applied retrospectively to existing contracts and mortgages.

The High Court held that the 1995 mortgage was not affected by the 2009 act and held that all the authorities led one to the conclusion

“If such prior written consent is not obtained by the mortgagor and the mortgagor proceeds to enter into a lease with a tenant, the lease will be binding on the mortgagor as lessor, but as against the mortgagee, the lease will not be binding.”

The bottom line is that any potential impediment to the realisation of the security must be approved of by the lender. The principles in N17 Electrics Limited have been applied consistently and the onus on proving that a mortgagee had consent to a lease lies with the party seeking to rely upon the terms of the lease.

This lease, therefore, was void as against AIB and an order for possession was granted, with a stay for 6 months to allow obtain new accommodation having regard for the fact that she had lived there for two decades.

Read the full decision in Allied Irish Banks PLC and Richard Finbarr Fitzgerald [2020] IEHC 197.