I move amendment No. 31:
In page 66, between lines 28 and 29, to insert the following:
"(4) Subject to subsection (5), an application under section 96(2) or section 99(3) may be made to the High Court.
(5) Where an application under section 96(2) or section 99(3) concerns property which is subject to a housing loan mortgage the Circuit Court shall have exclusive jurisdiction to deal with the application and the application shall not be made to the High Court.
(6) The jurisdiction of the Circuit Court to hear and determine applications under sections 96(2) and 99(3) concerning property which is subject to a housing loan mortgage shall be exercised by the judge of the circuit where the property or any part of it is situated.”.
This is a new subsection on court jurisdiction. This was brought to my attention by a family member some time ago. Since then, when I saw what was happening with house repossessions, I asked the Department examine this.
Since the issue was raised a couple of months ago, it became clear that there are some lending agencies that are bypassing the Circuit Court. Some constituents who got into trouble with lending institutions and found themselves in arrears were taken to the High Court, an alien environment for most ordinary people. The newspapers have carried reports on substantial numbers of people being taken to the High Court for repossessions, particularly by sub-prime lenders. There is an agreement among most of the major lending institutions on repossessions and that is why the majority of substantial home loan lenders do not have many repossessions despite the adverse publicity about banks. The major banks and lenders do not go for repossessions unless they absolutely must.
It has been the practice, however, for sub-prime lenders generally, even when people default on very small sums, to immediately run to the courts. The question must be asked why and how these lenders were allowed to give such loans to people who could not secure them from the major institutions. The borrowers are now being taken to the High Court. Having spoken to some of my constituents, receiving a High Court order is so unusual that some people tended to ignore the issue and then found themselves subject to a repossession order.
I asked my officials to examine this and we discussed it with the Attorney General. We are now introducing this proposal which will insert new subsections into section 100 that will make it obligatory for lending institutions to commence repossession proceedings in the case of house loan mortgages in the Circuit Court rather than in the High Court. Proceedings for repossession other than those for a house loan may continue to be taken in the High Court or the Circuit Court. The allegation was made on the Order of Business this morning that we were guillotining this legislation, although we probably will not end up guillotining it because we will finish it before the end of business tonight. The reason I wanted this Bill is that if we can get it passed and implement it before the summer, all repossession orders on household loans that take place subsequent to its passing will have to be taken in the Circuit Court and not in the High Court. That is only right and proper.
When I raised this originally it was said to me that if the amount involved was within the Circuit Court jurisdiction but the order is taken in the High Court, the lending company and its solicitors can recoup only the costs of a Circuit Court order. However, that is still not good enough because many of the repossession orders taken in the Circuit Court are taken, in effect, in the county registrar's court, and the county registrar has more discretion than, for example, the Master of the High Court. The Master of the High Court has mentioned on a number of occasions that something should be done about this, but I was already doing something about it. It is quite a number of months ago that I asked my officials to see if we could find a Bill in which we could include this and I am glad we have been able to do that here. I realise I am pushing on an open door with colleagues around the House.
This provision will make life somewhat easier for those people who are subject to repossessions in that they will be able to go to courts in their own localities where there will perhaps be more discretion with regard to such orders. I do not mean this as a slur on the High Court, but whereas there is little or no discretion in the High Court with regard to such orders — once it is established that money is owing — there is a certain discretion within the jurisdiction of the Circuit Court, particularly in the context of such applications' going before the county registrar's court, as it is known.
I strongly recommend this amendment to the House and I hope it will make life a little easier for those who are subject to repossession orders and ensure there is more understanding. It is wrong that some lending agencies — not the major ones — have taken people to the High Court even with relatively small amounts of money owing and a relatively short period into the mortgage. It is unfair to drag people — particularly those who live outside Dublin — up to the High Court to enforce repossession orders when it could be done in the Circuit Court, within the person's own locality and where there is a little more discretion. For the people involved it may be their first time in court and at least they would be in their own locality. Because of the types of costs and the discretion available in the Circuit Court, it would make much more sense to use this court. Once we pass this legislation all lenders will have to commence applications for repossession on house loans in the Circuit Court and not in the High Court.