The case that exercised the Master
In a 13-page written judgment about whether Danske Bank could fast-track a debt judgment against a retired couple, the Master of the High Court queried the public housing shortage, the role of receivers and the role of banks that offload their distressed properties to speculators.
But at the centre of the case was Patrick and Bridget McGeeney, who borrowed from National Irish Bank to buy a house in Ballybofey in Donegal.
They fell into arrears, and in 2012 they put the house on the market. Their estate agent got an offer of €90,000. Danske Bank, which has since taken over National Irish Bank, did not accept the offer.
Two years later, Danske appointed a receiver to sell the property.
The couple later learned their property was in a portfolio of 400 repossessed buy-to-lets and homes sold in July last year to a trust called Finsbury Circle Nominee Ltd.
The property price register listed the sale price as €60,800, while their mortgage account was credited by €52,535. They calculated that receivers' fees of more than €8,000 were deducted from the price.
Mrs McGeeney alleged that the house was sold below its true market value to the trust, and questioned the receivers' fees charged to her account.
In a key judgment delivered on Thursday afternoon, Edmund Honohan suggested that the McGeeneys had legal grounds to defend themselves against the bank.
In his written judgment he said there "is a strong legal case" that the bank and the receiver could be liable if the property was sold for below its sale price.
While Danske Bank relied on submissions that the receiver is the agent of the borrower under the Conveyancing Act, Mr Honohan said any portfolio sale suggests "hands-on involvement by the bank". It was "a bit far-fetched" that the receiver could have negotiated the sale of 400 properties with a company that was registered two weeks before the sale went through.
"The low price on the McGeeney property suggests both parties were conscious of a significant upside and, one might reasonably infer that the deal is a joint venture," he said.
"Even if at arm's length, a receiver would be on constructive notice and in breach of his...duty to the mortgagor [the bank] if he knowingly agreed terms on such a basis without any attempt to bring the property to the market place.
"She [Mrs McGeeney] is looking for answers. Her husband is quite ill. They are both elderly, on a pension and unable to afford the services of a legal team. The actions of the bank and the receiver have caused them distress. Why should the McGeeneys be forced to contribute to the joint venture (either for the benefit of the speculators or for the bankers) the €37,000-plus difference between the price they could have got for the Ballybofey house and the price actually realised (two years later in a rising market), part of a 400-property portfolio of distressed assets?"
Mr Honohan also drew attention to receivers, saying: "I have sympathy for the view that the unaccountable receivership is a licence for theft."
Mortgage holders have "anecdotally reported grievan- ces against receivers ranging from surprisingly low sale prices through failure to respond to queries, menaces and worse.
"Justice demands regulation of receivers in the now familiar model of regulation by a statutory agency".