Michael McDowell (Dublin South East, Progressive Democrats)

It is proposed to transfer section 119 to a new Part 12, as set in amendment No. 69. As regards the substance of the section, the writ of fieri facias is an old common law remedy which allows the sheriff to seize the chattels of a debtor on foot of an execution order. Courts have held that chattels in this context include chattels real. Chattels real include leasehold property. A leasehold property is not realty. It is personality but it is called chattels real. Therefore, the sheriff can, on a fieri facias order, seize a leasehold itself.

For a reason which I will set out shortly, the remedy is rarely used today. I will set out the background to the inclusion of the proposed abolition of the sheriff's power to seize leasehold in section 119. In 1988, the Law Reform Commission published a report entitled Reported Debt Collection: (1) The Law Relating to Sheriffs. Chapter 8 of the report considered issues relating to sheriffs' powers to seize leasehold land. It argued that the advantage to creditors of infrequent use of this power was more than outweighed by the unnecessary inconvenience to purchasers of leasehold who must search in the sheriff's office for lodgements of an execution order. While the commission concluded that there was much to be said for abolishing the power or leaving judgment creditors with a more appropriate remedy of a judgment mortgage, it deferred making a definitive decision until it had considered the reform of the law relating to judgment mortgages.

In March 2004, a consultation paper on judgment mortgages was published. It recommended that the seizure of leasehold land by sheriffs as a means of enforcing debts be abolished. In October 2004, the Law Reform Commission published the consultation paper on reform and modernisation of land law and conveyancing law, which completed the first stage of the joint project between my Department and the commission to develop the legislation we are discussing today. It also recommended the abolition of sheriffs' powers to seize leasehold land and the implementation of reforms in respect of judgment mortgages. During the extensive consultation process which followed the October 2004 consultation paper, no submissions were received in respect of this recommendation with the result that the proposal to abolish leasehold seizure power was included in the draft land and conveyancing Bill set out in the Law Reform Commission report which was published in July 2005.

This Bill is based on the draft Bill contained in the 2005 report. As regards the substance of objections to the abolition of the power of seizure, it appears that the threat of seizure may be a useful instrument for enforcing debts against land only in certain circumstances. However, as already stated in the Law Reform Commission's 1988 report, any seizure would encounter the difficulties to which I referred in that report. These difficulties include the fact that seizure does not vest legal ownership in the sheriff and the fact that in the case of unregistered land, the sheriff has no means of ascertaining the title. Indeed, it has been stated that a sale under a fieri facias order is notice to buyers that the sheriff has no knowledge of the title and buyers and that buyers would consequently buy at their own peril, which would make it a virtually unmarketable title. The sheriff is not entitled to vacant possession of the property and any purchaser would have to seek ejectment of the tenant. Moreover, any attempt to gain possession by any other means would constitute forcible entry.

In short, the law relating to seizures of leasehold is unsatisfactory and ineffective. The alternative method of enforcing debts is by means of a judgment mortgage. I accept that the existing law and procedures whereby the Revenue Commissioners or any other plaintiff could seek a judgment mortgage on a debtor's land is cumbersome and fraught with difficulties. This is the reason Part 10 simplifies and clarifies the law relating to judgment mortgages. For these reasons, I suggest that Senator Cummins gives further consideration to the reforms set out in Part 10 of the Bill as a more effective method than retaining the power of seizure under the fieri facias order.