The concept of a “relevant debt”
It is important to have regard in particular to the presence or otherwise of a “relevant debt” – the person’s principal private residence, where that person was in arrears on the mortgage on 1st January 2015, or was in arrears before that date but had entered into an alternative repayment arrangement with the lender. That is a key factor which opens up access to the PIA review procedure.
A principal private residence (PPR) is defined in the 2012 Act as meaning
“a dwelling, in which the debtor ordinary resides, and includes
- any building or structure, or
- any vessel (whether mobile or not)
together with any garden or portion of ground attached to or occupied with the dwelling or otherwise required for the amenity or convenience of the dwelling.”
There are a number of matters to consider:
- The definition, under the 2012 Act, of a person’s PPR and whether there is a PPR included in the PIA for the purposes of the 2012 Act.
- Whether the borrower was in arrears on 1st January 2015. In this regard, the courts have held that a late payment (or even a series of late payments) do not constitute arrears for the purposes of this provision. Arrears of more than 31 days are effectively required.
- An alternative repayment arrangement has been defined (see Re Hill & Personal Insolvency Acts  IEHC 18) as “an arrangement as a result of which some alternative terms and conditions as to the repayment of a secured loan were agreed to govern the repayment obligations of the borrower”. In the absence of evidence of an ARA being agreed between the debtor and their lender this may not be satisfied.
A decision maker may, having regard to the above criteria, form a view that there is no relevant debt and that this is a basis for forming a view that the application does not fall within the criteria for being granted legal aid without reference to their financial resources (Regulation 13(10)) and/or should be refused legal aid under section 28(2)(b) on the basis that the person does not have as a matter of law grounds for taking the application. In that regard the words “ordinarily reside” should be given their ordinary and natural meaning. It should be noted that the central object of the s115A procedure is to allow the debtor to continue to reside in their PPR. If the debtor has moved out of the PPR on any more than a temporary basis then this is may not be satisfied.