Barrett v Leahy

 
FREE EXCERPT

[2015] IEHC 734

THE HIGH COURT

[No. 1406 S/2011]
Barrett v Leahy

BETWEEN

JOHN BARRETT
PLAINTIFF

AND

MAURICE LEAHY
DEFENDANT

2011/1406S - Baker - High - 25/11/2015 - 2015 IEHC 734

Land & Conveyancing – Order for recovery of monies – Execution of order – Rights of Judgment mortgagee – The Land and Conveyancing Law Reform Act 2009

1

1. In this motion the defendant seeks an order that the plaintiff be directed to remove and/or discharge from the Registry of Deeds a judgment mortgage entered on the defendant's lands at 16 Kiltragh Drive, Foxrock, County Dublin. The application raises a novel point of law.

Background
2

2. The application arises in the context of litigation between the parties in a number of proceedings. The plaintiff in these proceedings obtained an order on the 13 th January, 2012 from the Master of the High Court granting him liberty to enter final judgment in the sum of €450,000 together with interest pursuant to the Courts Act 1981 on the said sum from the 4 April, 2011 until judgment or prior payment, together with an order for the costs of the proceedings when taxed and ascertained.

3

3. On the 25 th January, 2012 the amount of the judgment was amended under O. 28 r. 11 to the sum of €455,000.

4

4. Judgment was entered on foot of these orders by the plaintiff on the 14 th May, 2012.

5

5. Enforcement proceedings were commenced by the plaintiff against the defendant and the Dublin Metropolitan District Court made an order that the defendant do pay the sum of €4,500 per month to the plaintiff in respect of the judgment.

6

6. As a result of payments made on foot of that instalment order and of payment of the capital sum of €69,000 on foot of a separate order of garnishee, the outstanding balance stated to be owed by the defendant to the plaintiff, including interest as of the 6 th July, 2015, was €426,602.41.

7

7. By motion dated the 6 th July, 2015 the plaintiff sought inter alia an order pursuant to O. 42 r. 36 of the Rules of the Superior Courts for the attendance and examination of the defendant in aid of execution, and for the appointment of a receiver by way of equitable execution over the proceeds of sale of properties not relevant to this application. As a result of that application the defendant agreed to lodge "without admission of liability" into court the said sum of €426,602.41 by way of security for the balance of the judgment. This lodgement was made pursuant to the order made by me on the 16 th July, 2015 and those monies stand to the credit of this suit pending further order. The instalment order made by the District Court has now been vacated.

8

8. No stay was placed on the order of the Master of the High Court giving liberty to enter judgment. The monies were not lodged in court in consideration of such a stay.

9

9. The defendant and his wife have issued two separate sets of proceedings against the plaintiff, summary proceedings bearing record number 2013/3715S and plenary proceedings bearing record number 2014/4092P by which they seek to recover a sum in excess of €11,000,000 from the plaintiff arising from financial and investment advice said to have been furnished to them by the plaintiff.

10

10. The defendant has asserted that the plaintiff is attempting to actively divest himself of assets which might be available to satisfy any judgment he might obtain from those proceedings with the intention of preventing him from recovering damages. He makes averments to this effect and gives examples of what he says are the intentional divesting of ownership in certain assets by the plaintiff in his replying affidavit sworn on the 10 th July, 2015 to the motion for cross examination.

The application with respect of the judgment mortgage
11

11. The defendant is the joint owner with his wife of unregistered premises situate at and known as 16 Kiltragh Drive, Foxrock, County Dublin in which they reside. The plaintiff registered the judgment as a judgment mortgage over the interest of the defendant in those premises on the 7 th October, 2012.

12

12. The defendant and his wife have agreed to the sale of this premises and it is anticipated that the judgment creditor will be paid in full from the proceeds of sale. The defendant however submits that the High Court should make an order cancelling or vacating the judgment mortgage having regard to the fact that the monies secured thereby have been lodged in the Central Office of the High Court to the credit of this suit, and it is argued that the plaintiff has as result "adequate security" for his judgment in the circumstances.

13

13. The plaintiff has refused a request in a letter of the 28th day of August, 2015 from the solicitors for the defendant to agree to vacate or discharge the judgment mortgage, and argues that as the lodgement into court by the defendant does not discharge the outstanding judgment, it does not as a matter of law affect the entitlement of the judgment creditor to maintain the judgment mortgage and to seek to enforce the security created thereby from the proceeds of sale. The plaintiff argues that the court has no jurisdiction to make the order sought.

The judgment mortgage: how it is to be characterised
14

14. The Judgment Mortgage (Ireland) Acts 1850 and 1858 were repealed and replaced by the new simplified statutory provisions contained in Part II of the Land and Conveyancing Law Reform Act 2009 ("the Act of 2009") which make no alteration in substance to the nature of the judgment mortgage.

15

15. A judgment may be registered as a mortgage against the estate or interest of a debtor in land pursuant to s. 116, and Section 117 of the Act expressly provides that registration of a judgment mortgage operates as a charge over the land. This is provided in s. 117(1):

2

2 "117.-

(1) Registration of a judgment mortgage under section 116 operates to charge the judgment debtor's estate or interest in the land with the judgment debt and entitles the judgment mortgagee to apply to the court for an order under this section or section 31 ."

16

16. By s. 117(3) the judgment mortgage takes subject to any rights or incumbrance affecting the land whether registered or not.

17

17. A judgment mortgage is sui generis and a creature of statute, and the definition in s.3 of the Act of 2009 of a "mortgage" does not include a judgment mortgage, and the definition section contains a separate definition of "judgment mortgage" as a mortgage registered by a creditor under s. 116".

18

18. The defendant argues that a judgment mortgagee is a "volunteer" for all purposes, and that because the law recognises that a judgment mortgage is a process of execution only, that it is an "intermediary security" which terminates or has served its purpose once the monies secured thereby "become available or are realised". He argues...

To continue reading

REQUEST YOUR TRIAL