Three years ago Robert Gunn secured a mortgage of €210,000 from Start Mortgages Ltd which was secured against his family home at Lyre, Lisselton, Co Kerry.
However, after losing his job in 2008 he was unable to make repayments and fell into arrears. As a result, Start Mortgages sought to secure vacant possession of Mr Gunn’s home, and orders allowing Start to sell it on.
However, Mr Gunn claims that Start was not legally authorised to make the loan to him and were not regulated by the state.
Start claims it was legally entitled to make the loan. It claims that in 2004 the then consumer director of the Irish Financial Regulatory Authority prescribed Start as a credit institution in the state.
Mr Gunn, who is represented by the New Beginnings group of lawyers and business people, claims only the Central Bank has the power to prescribe any entity as being a “credit institution,” and the consumer director never had the power to make such a decision.
Yesterday, Mr Gunn secured leave to bring a challenge against the Central Bank of Ireland, Ireland and the Attorney General. Start Mortgages Ltd is a notice party to the application.
He is also seeking declarations that the power to prescribe a credit institution is vested exclusively with the Central Bank. and an injunction preventing Start from taking any further steps against him pending the further determination of his proceedings.
Leave to bring the action was granted by Mr Justice Michael Peart, on an ex parte (one side only) basis. The judge made the matter returnable before the High Court to a date next month.
In an affidavit, Mr Gunn, a separated father of one child, said he has no alternative place to go if Start Mortgages secure an order granting the lender possession of the house that he has lived at all his life.
In September 2007 he successfully obtained a housing loan of €210,000 from Start through a broker trading as Mortgage Cabin based in Bray, Co Wicklow.
The loan from Start, which was to be repaid over 35 years on a standard variable interest rate of 7.25%, was secured over his family home.
A charge created by a deed of mortgage was lodged in the land registry on May 20, 2008.
He said that the loan was used to cover a mortgage of €155,000 with First Active, as well as a small car loan. Mr Gunn said he has been out of work since May 2008 and has been unable to keep up with his schedule of repayments.
He said that Start wrote to him in September 2009 demanding vacant possession of his home.
A application by Start has been before the Master of the High Court on several occasions since the start of the year.