AIB Plc (plaintiff) v Dormer

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 13 March 2009
• Neutral Citation: [2009] IEHC 586
• Court: High Court
• Docket Number: [1995 No. 233 SP]
• Date: 13 March 2009

[2009] IEHC 586

THE HIGH COURT

[No. 233 SP/1995]

Allied Irish Banks Plc v Dormer

BETWEEN

ALLIED IRISH BANKS PLC.

PLAINTIFF

AND

CONCEPT A DORMER

DEFENDANT

AND

ROBERT ROE

NOTICE PARTY

RSC O.33 r8

STATUTE OF LIMITATIONS 1957 S33

STATUTE OF LIMITATIONS 1957 S38

JOHNSON v LOWRY & ORS 1900 1 IR 316

HARPUR v BUCHANAN 1919 1 IR 1

STATUTE OF LIMITATIONS 1957 S32(2)(A)

ARCHDALL v ANDERSON 1890 25 LRI 433

STERNDALE v HANKINSON 1827 1 SIM 393 57 ER 625

ROYAL BANK OF IRELAND LTD v SPROULE 1940 IR JUR REP 33

ALPHA CO LTD, IN RE 1903 1 CH 203

NIXONS ESTATE, IN RE 1874 9 IR EQ 7

COLCLOUGH, IN RE 1858 8 I CH R 330

COLOES ESTATE, IN RE 1890 25 LRI 86

RSC O.15 r31

MUNSTER & LEINSTER BANK v MACKEY 1917 1 IR 49

RSC 1905 O.33 r8

RSC O.33 r7

WYLIE THE JUDICATURE ACTS (IRL) & RULES OF THE SUPREME COURT (IRL) 1905 1906 519

RSC 1905 O.33 r7

RSC 1905 O.33

IRWIN v DEASY (NO 2) 2006 2 ILRM 226 2006/30/6354 2006 IEHC 25

REAL PROPERTY

Judgment mortgage

Well-charging order - Order for sale - Settling of claim prior to advertisement for incumbrancers - Application for discharge of order for well-charging order - Application for order directing sale by notice party - Whether jurisdiction to make order - Whether claim of notice party statute-barred - Rights of incumbrancers other than plaintiff - Whether incumbrancer who had not proved entitled to claim - Obligations of plaintiff - Right of plaintiff to vacate order prior to advertisement - Whether inherent jurisdiction to consider application from incumbrancer who had not proved - Limitation period - Discretion - Johnson v Lowry [1900] 1 IR 316; Harpur v Buchanan [1919] 1 IR 1; Archdall v Anderson (1890) 25 LR Ir 433; Sterndale v Hankinson (1827) 1 Sim 393; Royal Bank of Ireland Ltd v Sproule (1940) Ir Jur Rep 33; Re Alpha Co Ltd [1903] 1 Ch 203; Re Nixon's Estate (1875) 9 Ir R Eq 7; Re Colclough (1858) 8 Ir Ch R 300; Re Coloe's Estate (1890) 25 LR Ir 86; Munster and Leinster Bank v Mackey [1917] 1 IR 49 and Irwin v Deasy [2006] IEHC 25, [2004] 4 IR 1 considered - Statute of Limitations 1957, ss 32, 33 and 38 - Rules of the Superior Courts 1986 (SI 15/1986), O 33, r 8 - Application refused; order vacating well-charging order and order for sale (1995/233SP - Finlay Geoghegan J - 13/3/2009) [2009] IEHC 586

Allied Irish Banks plc v Dormer

Facts Order 33, r. 8 of the Rules of the Superior Courts 1986 provides that "any incumbrancer subsequent in order of priority to the demand of the plaintiff, in case any lands or property the subject of such suit shall remain unsold, after provision for the plaintiff's demands and those of prior incumbrancers, shall be at liberty to apply to the Court for an order directing a sale of such unsold lands or property, or a competent part thereof, for payment of the demands subsequent to that of the plaintiff, which may have been proved as aforesaid; and the Court may accordingly direct such sale, if of opinion that such incumbrancers, or any of them, would be entitled to have their demands raised by a sale of such lands or property; or may direct a receiver to be appointed or continued over such unsold land or property, for the benefit of such subsequent incumbrancers and distribute the funds to be received by such receiver accordingly."

Section 38 of the Statute of Limitations 1957 provides that "At the expiration of the period fixed by this Act for a mortgagee of land to bring an action to recover the land or for a person claiming as mortgagee or chargeant to bring an action claiming sale of the land, the right of the mortgagee or such person to the principal sum and interest secured by the mortgage or charge shall be extinguished."

The plaintiff had obtained an order declaring that the principal monies secured by its equitable mortgage created by a deposit of title documents stood well charged on the defendants' interest in certain lands. The order declares the amount due; provides for the defendants to come in and dispute the sums declared; and, in default of dispute and payment within three months, orders the sale of the lands and the usual account and inquiry as to incumbrances and their respective priorities. However, prior to any advertisement for incumbrances, the defendants settled the plaintiff's claim. By notice of motion the plaintiff sought an order discharging the well charging order and order for sale and striking out the proceedings. There was a judgment mortgage registered by the notice party in respect of a judgment obtained earlier. The notice party applied to take over the order for sale pursuant to O. 33, r. 8 of the Rules of the Superior Courts 1986. The notice party had not proved as an incumbrancer or otherwise participated in these proceedings prior to making the current application; and the notice party took no other steps to recover its judgment or enforce the judgment mortgage prior to being notified of the plaintiff's proposed application to discharge the order. He submitted that he was entitled to an order pursuant to O. 33, r. 8 and that his claim to enforce the judgment mortgage by a sale of the defendant's lands was not statute barred

Held by Ms. Justice Finlay Geoghegan in dismissing the notice party's application that

the right of action of the notice party to enforce the judgment mortgage by a well charging order and order for sale accrued on the date of judgment and not the later date of registration of the judgment mortgage and that, in accordance therewith, once, for any reason, the debt cannot be recovered, the judgment mortgage ceases to operate. Johnson v. Lowry [1900] 1 I.R. 316 applied.

2. That an order for sale should not be considered as enuring for the benefit of incumbrancers, in the sense of giving them rights if the plaintiff decided not to proceed with the sale prior to the incumbrancers being invited to prove in the proceedings. Harpur v. Buchanan [1919] 1 I.R 1 and Royal Bank of Ireland v. Sproule [1940] Ir. Jur. Rep. 33 and Re Coloe's Estate 25 L.R. Ir. 86 considered.

That once the advertisement for incumbrancers had been placed and, one or more incumbrancers had come in and proved in the proceedings within the time specified, then the position changed and it was no longer only the plaintiff and defendant participating in the proceedings. If the sale proceeded, then those incumbrancers who proved benefit under the order for sale in the sense that they were entitled to participate in the proceeds of sale in accordance with their determined priority. If, however, the plaintiff then determined not to proceed with the sale either by reason of the discharge by the defendant of the debt due to the plaintiff or some other reason, the incumbrancer who had proved was still not entitled to require the plaintiff to proceed with the sale but did have a right to apply in the proceedings pursuant to O. 33, r. 8 for an order for sale and (if necessary a well charging order) and that the proceeds of sale be applied, inter alia, for its benefit. Munster and Leinster Bank v. Mackey [1917] 1 I.R. 49 applied.

That O. 33, r. 8, in its terms, only applies to an incumbrancer who has already proved in the proceeding prior to the date upon which the application is brought. The notice party was not a person to whom O. 33, r. 8 of the Rules of the Superior Courts 1986 applied. Further, if the Court had an inherent jurisdiction to make an order in favour of an incumbrancer who had not yet proved in proceedings on a basis analogous to O. 33, r. 8, by reason of sections 32 and 38 of the Statute of Limitations 1957 the notice party was not a person who was entitled to an order for sale for the purpose of enforcing the judgment mortgage registered in respect of the judgment debt obtained in 1991. Further, the Court would not exercise its discretion in favour of making an order for sale in favour of the notice party having regard to the length of time which had elapsed since the notice party obtained judgment and registered its judgment mortgage and the absence of any steps taken to enforce same.

Reporter: P.C.

1 On 14 ^th October, 1993, Mr. Roe, the notice party, obtained judgment in the sum of IR£26, 139 against the defendant. On 17 ^th December, 1993, that judgment was registered as a judgment mortgage against the defendant's interest in the lands in folio 14365 County Laois. In this application, the notice party seeks an order pursuant to O. 33, r. 8 of the Rules of the Superior Courts, directing the sale of the defendant's interest in the lands and premises comprised in folio 14365 County Laois in these proceedings brought by Allied Irish Banks plc, as plaintiff, against the defendant. The application arises in the following way.

2 On 17 ^th July, 1995, by order of the High Court (Laffoy J.) it was declared that the principal monies secured by an equitable mortgage created by a deposit made on 9 ^th August, 1989, by the defendant with the plaintiff of the land certificate to folio 14365 in the County of Laois, together with interest and costs stand well-charged on the defendant's interest in the said lands and premises. Findings were made as to the amount then owing, liberty was given to the defendant to dispute the amount and the order then provided:

"AND IT IS ORDERED that in default of the defendant so disputing the said sum within the time aforesaid and in default of payment to the Plaintiff of the said some together with further interest on the principal sums of £32,967.78 and £45,242.53 at current Bank rates until payment and the costs hereinafter awarded within three months from the date of service aforesaid that the said lands and premises be sold at such time and place subject to such conditions of sale as shall be settled by the Court and the following Account and Inquiry are to be taken and made in the Examiner's Office namely:-

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