Coffey v Brunel Construction Company

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: HIGGINS,GRIFFIN J.
• Judgment Date: 13 May 1983
• Neutral Citation: 1983 WJSC-SC 119
• Docket Number: 324/1981,[S.C. No. 324 of 1981]
• Date: 13 May 1983

COFFEY v. BRUNEL CONSTRUCTION

BRYAN COFFEY AND RICHARD MOYLAN

Plaintiffs

and

BRUNEL CONSTRUCTION COMPANY LTD. (IN Voluntaryliquidation)

Defendants

1983 WJSC-SC 119

O'Higgins C.J.

Griffin J.

Hederman J.

324/1981

THE SUPREME COURT

Subject Headings:

PRACTICE: lis pendens

REAL PROPERTY: incumbrance

1 JUDGMENT delivered the 13th day of May 1983byO' HIGGINSC.J. [HEDERHAN AGREEING]

2 In this case the Defendants have appealed against an Order made by Mr. Justice Barrington in the High Court that a Lis Pendens registered by them against the interest of one Patrick Broughan in the lands comprised in Folio 13847 County Cork be vacatfd. The facts are as follows.

3 On the 8th November 1979 the Plaintiffs agreed to purchase from Patrick Broughan, for the sum of £340,000, the lands comprised in Folio 13847 of the Register for the County of Cork. Patrick Broughan was registered as full owner of these lands. The Plaintiffs duly paid the full purchase money, and on the 7th December 1979 a Transfer was executed by Patrick Broughan transferring his interest as registered owner in the lands to thePlaintiffs. The Plaintiiffs were, in fact, purchasing this property on behalf of a company named John A.wood Limited and, because it suited the interests of this Company at the time, it was decided to delay the registration of the Transfer. Th(c) instrument of transfer was not in fact lodged for registration until the 25th February 1981. Earlier, on the 9th May 1980, the Defendants commenced proceedings in the High Court against Patrick Broughan seeking a declaration that he held the lands comprised in the Folio as trustee for them. On the same date these proceedings were registered in the Land Registry as a Lis Pendens affecting the interest of Patrick Broughan in folio 13847. Although informed of the purchase and transfer of the lands to the Plaintiffs the Defendants declined to vacate the said Lis Pendens and accordingly these proceedings were brought in the High Court seeking an Order of the Court vacating the same. The Plaintiffs having succeeded in obtaining this Order in the High Court, this appeal has been brought by theDefendants.

4 The Defendants contend that the learned trial Judge was incorrect in the Order he made and that the prior registration of the Lis Pendens had the effect under the Registration of Title Act 1964,that,on the registration of the Transfer and of the Plaintiffs as registered owners, the lands comprised in the Folio vested in the Plaintiffs subject to the Lis Pendens which was a registered burden. They rely in particular on two provisions of the Act. In the first place they point be the provisions of Section 51 which deals with transfers by the registered owner by means of an instrument of Transfer and which, in subsection (2), expressly provides that "until the transferee is registered as owner of the land transferred, that instrument shall not operate to transfer the land1.Accordingly they submit that the Transfer executed by Patrick Broughan on the 7th December 1979 did not operate as such to transfer or vest the lands in the Plaintiffs. They further say that when the Plaintiffs were registered as owners the provisions of Section 52(1)came into operation and while there was then vested in the Plaintiffs an estate in fee simple in the land, this was expressly made subject to "the burdens, if any, registered as affecting the land", and the Lis Pendens was such a burden. In my view, these submissions, while correctly indicating the effect of the Sections relied on, do not meet the true facts and issues which arise on this appeal.

5 Section 51(1) of the Act deals only with the effect of the instrument of transfer and, as indicated, provides that until registration of the transferee as owner, this instrument shall not operate to transfer the land. Here, however, the Plaintiffs have not to rely merely on this instrument. They had purchased the land pursuant to a contract and had paid over the full purchase money. There can be no doubt, therefore, that on the execution of the transfer by the registered owner which was so executed on payment of the purchase money, the entire beneficial estate and interest in the lands passed to the Plaintiffs and theregisteredowner became a bare trustee for them. for them. The question, therefore, is whether the Plaintiffs' rights, which arose prior to registration and prior to the registration of the Lis Pendens are to be made subject to the Lis Pendens as a registered burden. In my view, this case is very similar to In re Strong 1940 I.R. 382, a decision of the former Supreme Court. While In re Strong was decided under the provisions of the Local, Registration of Title (Ireland) Act 1891 (the Act of 1891) and concerned a Judgment Mortgage which was registered prior to the registration of a purchaser who had paid his full purchase money, it seems to me that the reasoning applies equally to the present Act which is a consolidating measure and to a Lis Pendens registered as a burden prior to the registration of a transferee for value as registered owner. I propose, therefore, to apply that reasoning to the present Act to the facts of this case.

6 In the first place, note should be taken of the provisions of Section 68 of the Act. In subsection (1)of this Section it is provided that only the registered owner of the a charge thereon shall be entitled to transfer or to deal with the same. The Section goes on, in subsection (2), to provide as follows:

7 2 "(2) Nothing in this Act shall prevent a person from creating any right in or over any registered land or registered charge, but all such rights-shall be subject to the provisions of this Act with respect to registered transfers of land or charges for valuableconsideration.

8 3 (3)An un-registered right in or over registered land (not being a burden to which the land is subject by virtue of Section 72) shall not affect the registered owner of a charge created on the land for valuableconsideration.

9 The provisions of the Act with respect to registered transfers of land are contained in Section 52 which provides that on the registration of a transferee, there shall be vested in him an estate in fee simple in the land "subject to -

10 a (a)the burdens, if any, registered as affecting the land, and

11 (b) the burdens to which, though not so registered, the land is subject by virtue of Section 72, but shall be free from all other rightsincludingrights of the State"

12 These provisions of the Act are similar to those of Section 44(2) of the 1891 Act which was in the following terms:

13 "(2)Nothing in this Act shall prevent a person from creating any right in or over any registered land or registered charge, but any right created or arising in relation to registered land after the first registration of the land shall not affect a registered transferee of the land or charge for valuable consideration, or the registered owner of a charge created in the land for valuable consideration unless that right is either -

14 a (a)registered as a burden affecting the land, or

15 b (b)one of the burdens to which, though not registered, all registered land is by this Act declared to be subject."

16 In In re Strong O'Byrne J., who delivered the majority judgment of the Court said at page 404, in relation to the meaning and effect of Section 44(2) of the 1893 Act, as follows:

17 "The meaning and effect of subsection (2) of the foregoing Section seems to have been lost sight of in some of the earlier cases. It wasconsidered by this Court in Devoy v. Hanlon 1929 I.R. 246, and the court (consisting .of Kennedy C.J., Fitzgibbon and Murnaghan JJ.) unanimously held that the Section recognised the creation of rights (including estates, interests, equities and powers see definition of "right" in Section 95) in the registered land, which do not appear upon the Register, and certain dicta in Pim v. Coyle 1907 1 I.R. 330, suggesting the contrary were disapproved of. The reasons stated in the judgment seemed to be unanswerable, and no attempt was made to question the decision.

18 Holding, then, that the decision in Devoy v. Hanlon correctly explains the effect of Section 44, it remains to be considered whether the interest of a person who has entered into a contract for the purchase of registered land and has paid his purchase money is a 'right' within the meaning of subsection (2) of the Section. Having regard to the definition of 'right' contained in Section 95, it seems to me that the term was used in a very wide sense, and there is nothing in the Section to cut down or limit the general meaning. Such an interest might reasonably be expected frequently to arise and the importance of protecting it cannot be questioned. It cannot fail, in my opinion, to have been within the contemplation of the Legislature when the Section was passed. It comes within the express terms of the Sectionand no good reason has been suggested for it from the operation of theSection."

19 I think this reasoning applies with equal force to the provisions of the present Act which I have mentioned. It...