Court of Appeal: Borrowers who broke into repossessed property lose appeals

About this case:

• Citation:
  [2026] IECA 80
• Judgment:
  External link
• Court:
  Court of Appeal
• Judge:
  Mr Justice Senan Allen

Delivering judgment for the Court of Appeal, Mr Justice Senan Allen concluded: “As was the defence which the defendants sought to mount to the High Court action, so was the appeal, a transparent abuse of process.”

Background

In April 2005, the first defendant mortgaged a property he wished to buy in Balbriggan, Co. Dublin.

The first defendant failed to meet his obligations, leading to the Circuit Court making an order for possession in respect of the property in April 2016.

The order for possession was subsequently executed by the Dublin County sheriff. The evening of that same day, a mob which included the third defendant broke back into the property and reinstalled the first defendant and his wife, the second defendant.

Rather than appealing the Circuit Court’s order, the first defendant unsuccessfully sought leave to bring judicial review proceedings quashing the order, and failed in his attempt to appeal that refusal.

On 27 February 2018, KBC Bank Ireland plc (KBC) issued High Court proceedings to recover possession of the property. An interim order requiring inter alia the defendants to vacate and deliver possession of the property to the plaintiff was made that same day.

On 20 April 2018, KBC applied for orders of attachment and committal of the first and second defendants due to their failure to comply. In May 2018, it was ordered that the first and second defendants be committed to Mountjoy prison, which order was set aside that same day on the basis of undertakings from those defendants.

Possession was recovered and the property was sold on 25 January 2019.

Between the time when the first and second defendants purged their contempt and the sale of the property, KBC delivered a statement of claim seeking a permanent injunction and claiming damages for trespass.

A defence was received, which alleged inter alia deception and that the mortgage was invalid.

On 29 September 2023, KBC completed a sale to Cabot Financial (Ireland) Limited of its interest in the “rump” of the loan and on 1 December 2023, Cabot completed a transfer to the plaintiff of its remaining assets, liabilities and obligations pursuant to a scheme of transfer approved by the Minister for Finance (S.I. No. 447 of 2023).

In October 2023, KBC issued a motion seeking either summary judgment or an order striking out the defence on the basis that there was no live issue remaining between the plaintiff and defendants, save an undertaking as to damages, and that the defendants had no defence to the action.

The transfer took effect on 1 January 2024 and a further motion issued seeking a declaration that the plaintiff had been substituted into the proceedings by operation of law, or an order substituting it into the proceedings.

The High Court

In respect of the substitution motion, the High Court found inter alia that the effect of the scheme of transfer was automatic and that her view was confirmed by the Supreme Court’s judgment in First Active plc v. Cunningham [2018] 2 I.R. 300.

As to the strike out motion, the court determined that the defence as pleaded, and proposed amendments to that defence, were bound to fail and constituted an abuse of process, where the defendants had failed to advance their objections prior to the making of the possession order, or by way of an appeal of that order.

The first and second defendants appealed the High Court’s orders to the Court of Appeal.

The Court of Appeal

As to the appeal against the substitution order, Mr Justice Allen highlighted that the grounds of appeal did not engage at all with the High Court’s analysis, reasoning or conclusion and that “They betray a complete failure to understand the nature of the order sought and made.”

In particular, the judge considered that the grounds advanced were “littered with outrageous and entirely baseless allegations of fraud” which were “demonstrably false”.

Mr Justice Allen opined: “I think that at the hearing of the appeal the first defendant was finally brought to understand that since the effect of the Transfer Order and the 1971 Act was to transfer to KBC Bank NV any liability – if any – which KBC Bank Ireland plc might theretofore have had to him on foot of the undertaking as to damages it was the correct party and that – contrary to his initial submission – KBC Bank NV clearly had standing to deal with the action for which it would have to foot any bill.”

Dismissing the first appeal, the judge concluded: “But whether he understood it or not, it is so.”

As to the appeal against the order made on the strike out motion, the court agreed with the High Court’s core findings that the then-plaintiff’s right to possession of the property was conclusively and finally determined by the Circuit Court in 2016 and that if the defendants wanted to challenge the possession order on the grounds advanced in the trespass action, they should have advanced their objections before the possession order was made, or should have appealed that order.

Mr Justice Allen further agreed with the High Court that the proposed amended defence and counterclaim was an impermissible attack on the possession order.

Identifying a number of “themes” in the appeal, the judge found that the first “plainly wrong” theme was that the High Court erred in interpreting the defence as a collateral attack on the Circuit Court order.

As to the second theme, which concerned alleged fraud, Mr Justice Allen explained: “The fact is that the defendants asserted fraud by way of a purported defence to a trespass action and have not brought an action to set aside the Circuit Court order which they would collaterally impugn.”

The judge continued: “That apart, I accept unreservedly counsel’s submission that the asserted fraud – which has not been properly pleaded – to the extent that it can be gleaned from the first defendant’s affidavits and submissions, comes nowhere near meeting the threshold. At its height, the assertion is based on a misunderstanding of the securitisation documents and the law and is plainly wrong.”

Noting that at the hearing of the appeal the first defendant first sought to raise, by way of a purported housekeeping matter, that he had not been provided with a copy of the mortgage sale management agency agreement and a “true sale opinion”.

In circumstances where the defendants had lodged interlocutory motions, including in respect of those documents, which had since become the subject of applications for leave to appeal to the Supreme Court, Mr Justice Allen concluded: “The first defendant’s attempt to reopen the issue of his entitlement to those documents by way of a “housekeeping matter” was – as he must well have known – an abuse of process.”

The court also recognised inter alia that the first defendant had essentially conceded that his assertion of fraud could not be properly particularised where he had not been provided with discovery, “In other words, he more or less acknowledged that there was no basis for his bald assertions of fraud but he hoped by fishing to be able to first of all particularise and then substantiate it.”

Conclusion

Accordingly, the Court of Appeal dismissed both appeals.

KBC Bank NV v Gordon Smith & Ors [2026] IECA 80