Allied Irish Banks Plc v O'Neill

• Jurisdiction: Ireland
• Judgment Date: 13 December 1995
• Date: 13 December 1995
• Docket Number: [1994 No. 140 Sp]
• Court: High Court

Allied Irish Banks plc v. O'Neill

Allied Irish Banks plc

Plaintiff

and

Austin O'Neill and Susan Kidd (otherwise known as Susan O'Neill)

Defendants

[1994 No. 140 Sp]

High Court

Family law - Property "Dwelling" - Equitable deposit of title deeds to farm - Farm including family home - Prior written consent of spouse not obtained - Whether entire equitable deposit void - Whether void only in relation to family home - Whether possible to sever family home from rest of lands comprised in equitable deposit - Whether consent of Land Commission required - Family Home Protection Act, 1976 (No. 27), ss. 2 and 3.

Section 3, sub-s. 1 of the Family Home Protection Act, 1976, provides, subject to certain exceptions not material hereto, that "where a spouse, without the prior consent in writing of the other spouse, purports to convey any interest in the family home to any person except the other spouse . . . the purported conveyance shall be void."

Section 2, sub-s. 1 of the Act of 1976 provides that "family home" means primarily"a dwelling in which a married couple ordinarily reside"; and, by virtue of sub-s. 2,"dwelling" means "any building . . . or part thereof, occupied as a separate dwelling and includes any garden or portion of ground attached to and usually occupied with the dwelling or otherwise required for the amenity or convenience of the dwelling."

The second defendant deposited the land certificate to farm lands comprising 63 acres (on which stood the building in which her family resided) with the plaintiff, to secure the liabilities of herself and her husband, the first defendant, to the plaintiff. The first defendant had not consented in writing to the deposit of the title deeds. The plaintiff sought a declaration that the monies owing by the defendants stood well charged on the lands the subject of the certificate; and an order that payment of the monies be enforced by a sale of the said lands or the appointment of a receiver.

The defendants contended that s. 3, sub-s. 1 contemplated a single conveyance, which was either wholly valid or wholly void; and that the deposit of the land certificate was wholly void, in the absence of the first defendant's consent in writing. It was also contended that since the conveyance was not in writing, it was not possible to sever the offending part, as there was nothing from which it could be deleted; that severance would alter the scope and intention of the transaction; and that severance would give rise to insuperable practical difficulties.

The plaintiff argued that the Act of 1976 must be construed purposively, and that to treat the mortgage as void in its entirety would go beyond the purpose of the Act of 1976.

Held by Laffoy J., 1, that in defining the expression "family home" and in delimiting the extent of the property to which the protection afforded by s. 3 and the other provisions of the Act of 1976 should apply, the legislature had clearly recognised that the family borne might be part of a larger holding; that in defining the expressions"family home" and "dwelling", the legislature itself had theoretically severed such a larger holding and had theoretically created new holdings; and that if the legislature had intended that an instrument or transaction intended to effect a disposition of both the "family home" and of other property would be wholly and entirely void for non-compliance with s. 3, then such theoretical severance would have been unnecessary.

2. That on a literal interpretation of sub-s. 1 of s. 3, by reference to the definitions in the Act of "convey", "interest", "family home", and conveyance, the inescapable conclusion was that the intention of the legislature was that the effect of noncompliance with the prior consent requirement of sub-s. 1 of s. 3, in a conveyance which purported to convey both the family home and other property, was to render void only the conveyance of the interest in the family home.

3. That on a purposive approach, a construction of s. 3, sub-s. 1 which limited the invalidating effect to the family home, as defined, was entirely consistent with the legislative scheme as expressed in the Act of 1976 as a whole and fulfilled its purpose.

4. That while the above construction undoubtedly created difficulties, in determining what was the extent of the family home, such difficulties could be overcome by the application of legal and equitable principles, although the application of the principles might vary according to the nature of the transaction.

5. That to hold that the equitable mortgage had only effectively charged part of the lands was not to rewrite the bargain between the parties, but rather was to recognise that the parties had only partially implemented their bargain, as, for example, if the second defendant had lost title to part of the lands prior to the deposit of the land certificate.

6. That the proceedings would be adjourned to hear submissions as to where the dividing line between the family home and the rest of the lands should be drawn.

Quaere: Whether the consent of the Land Commission to the sub-division was necessary or whether the sub-division was covered by the general consent procedure provided for in Circular No. S.R. 13/77?

Cases mentioned in this report:—

Bank of Ireland v. Purcell [1989] I.R. 327; [1990] I.L.R.M. 106.

Bank of Ireland v. Smyth [1995] 2 I.R. 459.

Hamilton v. Hamilton [1982] I.R. 466; [1982] I.L.R.M. 490.

Nestor v. Murphy [1979] I.R. 329.

Special summons.

The facts have been summarised in the headnote and are fully set out in the judgment of Laffoy J., infra.

A special summons was issued on the 22nd February, 1994. An appearance thereto was entered on the 14th April, 1994.

The summons was heard by the High Court (Laffoy J.) on the 3rd October, 1995.

Cur. adv. vult.

Laffoy J. 13th December, 1995

In these proceedings the plaintiff claims, inter alia, a declaration that the sum of £50,303.94 together with continuing interest at the court rate stands well charged on the interest of the second defendant in the lands registered on Folio 503 of the Register of Freeholders, County Carlow and an order that payment of the said monies be enforced by a sale of the said lands or by the appointment of a receiver or both.

The lands formerly registered on Folio 503 of the Register of Freeholders, County Carlow, which are now registered on Folio 7308F of the Register of Freeholders, County Carlow, comprise 63 acres 0 rood and 26 perches statute measure. On the 12th December, 1991, the second defendant deposited the land certificate in relation to the lands registered on Folio 503 of the Register of Freeholders, County Carlow, of which she was then registered as full owner, with the plaintiff and the...