This is to delete sub-section (2), which has reference to foreclosure. The sub-section is as follows:—
"(2) In this Act references to a foreclosure action shall, in relation to land, be construed as including references to an action claiming the sale of the land instead of foreclosure."
It is proposed now to delete that sub-section. As the Minister mentioned on the Second Stage there is no such thing as foreclosure in Ireland. When the Bill was being prepared, we relied on an earlier case and did not advert to a later leading case of Waters v. Lloyd (1911) 1 I.R. in which Lord Justice Holmes in the old Court of Appeal dealt comprehensively with the differences between the law in Ireland and in England. Some of his judgment will, I hope, clarify what the position is with us:
"The remedies given by the well-settled law and practice of this country to mortgagees differ in one essential feature from those usually adopted in England. In both countries, the mortgagee is entitled to gain possession of the land by an action of ejectment or otherwise; but as the mortgagor may years afterwards bring a suit to redeem the mortgage, in which the mortgagee must account for the rents and profits he has received, this is a course rarely resorted to. In England, the usual remedy of the mortgagee is an action to foreclose, the judgment in which makes him the absolute owner of the mortgaged lands if the mortgagor does not redeem within a limited period.
I understand that this is the course taken, not only by the first mortgagee, but also by mortgagees of the equity of redemption who undertake to redeem the earlier mortgages, and even by a person whose right as mortgagee arises from a deposit of the title-deeds of the lands. In these cases the lands themselves become the property of the foreclosing mortgagee; and they seem to me to be actions or suits to recover land within the meaning of the first section (Section 1 of the Real Property Limitation Act, 1874). In Ireland foreclosure is unknown. The mortgagee who desires to put an end to the mortgage takes proceedings to obtain, not the mortgaged land, but the money secured by it. The judgment he seeks is that the lands be sold by the court, and that all persons interested therein be paid out of the proceeds in due priority. This court recently considered the effect of this mode of procedure in connection with the arrears of interest which a mortgagee was entitled to be paid out of the purchase money of the mortgaged property; and, as far as we could ascertain, sale of the lands, by the Court of Chancery, and in later times by the Landed Estates Court, has in Ireland always taken the place of foreclosure in England. Mr. Ronan has called our attention to a remarkable legislative recognition of the difference of practice in the two countries which is to be found in Section 25 of the Conveyancing and Law of Property Act, 1881. This section, which authorises the court to direct a sale of the property in foreclosure and redemption suits, ends with the provision that it does not extend to Ireland, which can only be accounted for by the fact that the settled practice in this country made it unnecessary. Now, while an English foreclosure action may be properly described as an action to recover land, a proceeding taken by an Irish mortgagee to realise his charge by selling the lands subject thereto is not so. It is, in the words of Section 8, that is, Section 8 of the Real Property Limitation Act, 1874, an action, suit, or other proceeding to recover money secured by a mortgage, similar to a proceeding to realise a lien for unpaid purchase money or any other sum charged upon or payable out of land."
The question which arose in Waters v. Lloyd was as to whether an acknowledgment of a mortgage debt having been made by an agent was sufficient to keep alive the right to have the lands sold and the debt realised. If an action for sale was an action to recover land, the acknowledgment made would not satisfy the law as it was made by an agent. If, however, it was an action to recover money secured by a mortgage the acknowledgment was sufficient. The court of appeal held that it was an action to recover money. The point as to the type of acknowledgment required will, in future, be academic in view of Section 47 of the Bill which proposes to allow an acknowledgment made by an agent to be effective in every case. But the point at issue in the case could still be vital where an acknowledgment is made after the period of limitation has expired, and for the reason that, if actions for sale were to remain, for the purposes of the Statute, actions to recover a mortgaged debt, these actions could still be brought irrespective of the date of the acknowledgment.
In this respect, we think that Waters v. Lloyd should be overruled and that actions for the sale of mortgaged property should be put on the same footing as actions for the recovery of land. In other words, once the period has elapsed both the remedy and the right should be barred. At present the position is anomalous. A mortgagee may want to get possession of land to effect a sale and, as I have indicated in dealing with amendment No. 3, this type of action may now become more popular than in the days of Lord Justice Holmes. At the end of the statutory period, if there has been no acknowledgment, an action to get possession of the mortgaged land is barred but an action to have the land sold may not be, if there is a subsequent acknowledgment.
We think that, when an action to eject the mortgagor is barred and the right extinguished, an action to sell him out should also be barred and the right extinguished. The law, as we propose it should be, in regard to actions for sale, will be found in amendments Nos. 36 and 37, and the matter will arise there. Our proposals will cover all actions by a mortgagee specifically and clearly and the different categories into which they are to be placed will be clearly indicated. I have gone into this matter in detail on this amendment in order that our proposals may appear in proper perspective, but they will arise on the two amendments that I have referred to— 36 and 37.
