Colm Burke (Fine Gael)

I thank Senator Marc MacSharry and his colleagues for introducing these proposals. However, I do not support the draft Bill because, like the Minister of State, I am of the view that it is unconstitutional. The judgment delivered by Ms Justice Dunne on 25 July casts doubt on the legality of any repossessions in respect of a certain cohort of distressed mortgage holders. It is interesting to note that in all four of the cases she dealt with, the moneys were advanced in 2007 and the borrowers ran into arrears by 2008.

Ms Justice Dunne's findings point to a defect in the Land and Conveyancing Law Reform Act 2009. The Government will have to introduce amending legislation to deal with that. The judgment observes of the 2009 Act, which sets out the obligations, rights and powers of mortgagees:

It only applies therefore to mortgages created by deed after the 1st December, 2009. It appears that there is a lacuna created by the repeal of [section] 62(7) in that, as I have found, those lenders who did not have an entitlement to apply for an order pursuant to [section] 62(7) by the 1st December, 2009, are not in a position to avail of the provisions of the 2009 Act to apply for an order of possession, as their right to apply for such an order is not saved by the provisions of the [Interpretation Act 2005]. It is not for the court to supply that which is not contained in the 2009 Act.

The 2009 Act has created its own problems in repealing section 62(7) of the Registration of Title Act 1964 and replacing it with a provision that does not apply in certain circumstances. One assumes a significant number of cases were on hold pending this decision. This development emphasises the importance of looking carefully at legislation. Even the best brains in the Attorney General's office and in Departments do not foresee all the implications and potential legal anomalies of legislation, as is clear in this case.

I agree with the Minister of State that certain aspects of the Bill are not constitutional. For example, section 6(1)(e) refers to "an order that the principal sum due on the mortgage be reduced". In layman's terms, that is similar to informing someone who owns 100 acres that a court can make an order stating that he or she now only owns 50 acres. In a technical sense, that is what the section does and it would not stand up to scrutiny if the Bill were passed and referred to the Supreme Court by the President.

Other speakers referred to the market that previously existed in the context of mortgages. Earlier, I mentioned the four cases in respect of which Ms Justice Dunne handed down her judgment on 25 July and I outlined the fact that those to whom these cases relate borrowed all of the moneys involved in 2007 and got into serious difficulties within 12 months of doing so. The difficulty in respect of the period 2004 onwards is that one could not give people advice. My experience of that period was that when approached by people if I informed them that what they proposed was not a good idea and that they should not proceed with it, they would go elsewhere. That was the problem which we in the legal profession encountered at that time. My major complaint in respect of the period to which I refer relates to mortgage brokers and people being encouraged to borrow because the structure relating to how we earned our fees was based on how much money was loaned out. As a result, mortgage brokers were shopping around and giving out loans which should never have been extended to people. I agree with other Senators regarding alterations being made in respect of the incomes people were deemed to earn and the fact that bonuses, travel expenses and overtime were taken into account in this regard as if these were entitlements that would automatically be paid into the future. That was not the case.

I agree with the Minister in respect of the Bill. While I welcome the discussion on the matters to which it relates and while I accept that a solution must be found as soon as possible, I do not believe the legislation deals adequately with the problems.