Pepper Finance Corporation (Ireland) Limited v. Estate of Joseph Kelly


The High Court has recently considered an application by Pepper Finance Corporation (Ireland) DAC  (“Pepper”) pursuant to section 27(4) of the Succession Act 1965, seeking an Order to allow a nominated solicitor apply for and extract a Grant of Letters of Administration Ad Litem in the estate of a deceased Borrower (“the deceased”) for the limited purpose of receiving letters of demand and notices of appointment of receivers, and if necessary being served with any proceedings which may be required to be brought to enable Pepper to enforce their security.

The intention of this application is the recovery of monies and accrued interest payable on foot of three expired loan facilities, and to recover possession of the properties on which the loans are secured. Two of the loan offers were signed and accepted by the Deceased and his brother (as co-borrower) on 7 September 2007, and the third was signed and accepted by them on 12 October 2007.

The Deceased died on 5 August 2016, and no representation to his estate has ever been extracted. The fact that the Deceased died more than two years prior to Pepper bringing the section 27(4) application has raised the issue of whether section 9(2) of the Civil Liability Act 1961 has the effect that the contemplated proceedings are not maintainable against the Deceased’s estate.

“Necessary or Expedient”

On finding that the applicant had fulfilled their duty to take reasonable steps to notify the parties entitled to extract a grant of administration, Stack J then turned to consider whether it was “necessary or expedient that an order would be made.”

The immediate issue is the 2-year limitation period under section 9(2) of the Statute of Limitations Act 1961. In considering pleading the operation of the Statute of Limitations in Defence to a potential action brought by a lender, Stack J. references the case of Cawley v. Dún Laoghaire Rathdown County Council [2021] IECA 266, where the Court of Appeal held that litigation should proceed unless the cause of action is “hopelessly statute barred.”

In applying the test set out in Cawley, Stack J considered whether the intended proceedings can be considered "hopelessly statute-barred", and consequentially considered when it could be said the applicant’s right of action accrued.

Statute Barred?

The lead authority considered by Stack J in her judgment is Bank of Ireland v. O’Keeffe [1987] I.R. 47, which analyses the principle of when a cause of action can be said to accrue, and at paragraph 21 of her judgement, Stack J held:

If it [the cause of action] accrues before death, then the claim is one which was “subsisting” (within the meaning of s. 8) prior to death and is therefore deemed to “survive”. The limitation period in s. 9 applies to all actions which “survive”. However, causes of action which do not accrue prior to death cannot be said to “survive” death: they simply arise later and do not depend on s. 8 to be maintainable.”

The court found a distinction arises between these two scenarios because, at common law causes of action were personal in nature and were encapsulated in the maxim actio personalis moritur cum persona. The purpose and effect of Part II of the Civil Liability Act 1961 was to expand the types of action which survived death to all those specifically excepted by the Act, and to provide for a long stop limitation period of two years for the initiating of proceedings which were deemed to survive death of one of the parties. Part II of this Act however has no application to causes of action which accrued after death, such as might occur in the case of a breach of pecuniary obligations in a contract.

For this reason, the cause of accrual of the right of action was critical to the application of section 9 of this matter. In turn, the question of when the right to sue on foot of a loan agreement accrues depends on the interpretation of that agreement. In this matter there were three relevant facility letters, which incorporated the October 2005 Terms and Conditions of Bank of Scotland (Ireland) Limited, which provided that the lender may decide to treat, inter alia, the death of the borrower as an event of default and make a demand for repayment.

Stack J found however that in circumstances where the facility letters nominated a specific repayment date, the principal sum fell due and owing in September or October 2017 without the need for the service of a demand.


In granting the Order sought, Stack J found there were special circumstances in this matter warranting the appointment of someone other than the next entitled persons to administer the estate of the deceased. Stack J however stops short of making a final determination in relation to the issue relating to section 9 of the Civil Liability Act 1961, holding that if the estate thinks it appropriate to raise the statute of limitations as a defence in the intended proceedings to recover possession of the three properties, they should be entitled to do so.

Although not determinative on the issue, this judgment will be of some comfort to lenders who discover outside the two-year period that a Borrower has died and wish to bring an application to extract a grant.

For further information please contact Geoffrey Rooney (Solicitor), Liam Ryan (Solicitor) or your usual AMOSS contact.