Fergus Slattery v Gerard McCoy

• Jurisdiction: Ireland
• Judge: Ms. Justice Butler
• Judgment Date: 14 January 2021
• Neutral Citation: [2021] IEHC 9
• Date: 14 January 2021
• Docket Number: [2015/1766P]
• Court: High Court

Between

Fergus Slattery

Plaintiff

and

Gerard McCoy

Defendant

[2021] IEHC 9

[2015/1766P]

THE HIGH COURT

Joinder – Extant judgment – Exceptional circumstances – Applicant seeking to be joined to the proceedings as a co-defendant – Whether the applicant should be joined in the interests of justice

Facts: The applicant, the wife of the defendant, Mr McCoy, applied to the High Court seeking to be joined to the proceedings as a co-defendant or otherwise as a party in such capacity as the court directs. The applicant issued the motion on 19th December, 2019. The application was brought pursuant to O. 15, r. 13 of the Rules of the Superior Courts. The application was made after the plaintiff, Mr Slattery, obtained judgment in default of appearance against the defendant. The applicant argued that as her proprietary and pecuniary rights were affected by the litigation, she should be joined thereto either because this amounted to exceptional circumstances or, more generally, in the interests of justice. The plaintiff disputed the entitlement of the applicant to be joined to the proceedings on two main grounds. The first was that as a matter of principle, a party should not be joined as a co-defendant to proceedings after judgment has been granted and the only live issue remaining in the proceedings was the remedy to be awarded. The plaintiff argued that the applicant should be required to apply to have the judgment set aside before her joinder to the proceedings could be considered as an ancillary issue. The second objection advanced by the plaintiff was that the applicant’s real intention in seeking to join the proceedings was to set aside the lis pendens registered by the plaintiff. As an application to have the lis pendens vacated had been made and refused by O’Connor J, it was contended that this application amounted to a collateral attack on O’Connor J’s judgment.

Held by Butler J that, in circumstances where there was an extant judgment in being against the defendant which had not been appealed and which was not the subject of any application to have it set aside, the court was not prepared to consider the joinder of the applicant to the proceedings as if the judgment did not exist. Butler J held that in order for the court to consider whether the applicant should be joined to the proceedings, she must address the related question of the status of the existing judgment. As she had singularly failed to do this, Butler J refused her application under O. 15, r. 13.

Butler J held that the application would be refused.

Application refused.

JUDGMENT of Ms. Justice Butler delivered on the 14th day of January, 2021

1 This is an application brought by the defendant's wife to be joined to these proceedings as a co-defendant or otherwise as a party in such capacity as the court directs. Although ostensibly a straightforward procedural application, because the application has been made after the plaintiff obtained judgment in default of appearance against the defendant, it gives rise to difficult conceptual issues as regards the nature and status of that judgment and the extent to which the issues raised in the plaintiff's claim can be revisited at the instigation of another party whilst the judgment remains in being.

2 The background to this application is complex and has given rise to six sets of legal proceedings between these parties and the financial institution which is now responsible for the loan central to the issues between the parties. The plaintiff and the defendant, both of whom are businessmen, entered into a partnership at some time in the mid-2000s. In 2006 the partnership purchased a premises known as Owenstown House in County Dublin with a view to carrying out a redevelopment of the property. The purchase was funded or part-funded by a loan from Ulster Bank. The precise details of the loan, the security provided and the contributions made by the partners to the balance of the purchase monies are not entirely clear from the papers. Unfortunately, what is clear is that the timing of the purchase was not propitious. The intended redevelopment and with it the partner's ability to repay the Ulster Bank loan stalled in the recession which devastated the Irish economy and, in particular, the property sector from 2008.

3 The loan was for an amount of €686,500 and four separate securities were provided for it. These were a mortgage over Owenstown House itself, a life assurance policy, the deposit of title deeds to a property owned by the plaintiff and a legal charge over what is described in the plaintiff's proceedings as “a site with planning permission at Taney Park… the property of the defendant”. The papers before the court do not indicate what the total purchase price for Owenstown House was but it seems that in addition to the loan the parties also made direct contributions to that purchase price.

4 The history of the property at Taney Park is relevant to the issues the court has to decide on this application. According to the applicant, herself and her husband sold their family home and purchased a relatively large site at Taney Park in 1999. This purchase was registered in the sole name of her husband. They constructed what is now their family home, known as Dael Lodge, on part of that site. The applicant describes this house as having “a large garden and potential for the construction of an additional house.” The property is comprised within Folio 114644F of the Register for County Dublin which shows that the Folio was created by the amalgamation of plans from two different folios in 1996. It was then transferred by the original owner to the defendant in 1999. Significantly, the two plans which comprise the Folio are separately identified as “plan(s) 54, BN8MH” and “plans: 55”. Thereafter the various charges registered on the Folio distinguish between those which affect the entire of the Folio and those which affect only plan BN8MH.

5 In his proceedings the plaintiff defines the “Taney Park premises” as being a site with planning permission at Taney Park, the property of the defendant. The lis pendens registered by the plaintiff on 20th April, 2015 relates only to the part of the property shown as plan BN8MH. Therefore, it seems that the property comprised within Folio 114644F comprises two distinct sites for planning purposes, one of which was developed as Dael Lodge and the other of which remains undeveloped but which was granted planning permission, presumably for the erection of a second house, in 2005 and later again in 2010 and 2015. The lands in plan BN8MH are this development site. As the site remains undeveloped it appears to be used functionally as part of the garden of Dael Lodge. Unfortunately, no details of the planning permissions have been put before the court despite their potential relevance to certain of the arguments made by the applicant regarding the status of the entire folio as her family home.

6 As mentioned above, there are now multiple sets of proceedings in being arising out of the partnership between the plaintiff and the defendant most of which concern the attempts by the successor-in-title to Ulster Bank (Promontoria (Oyster) DAC – “Promontoria”) to enforce its security in order to recover the loan in respect of this and possibly other transactions. Two sets of proceedings are relevant to this application. On the 4th March, 2015 the plaintiff issued these proceedings against the defendant seeking to recover the sum of €160,000 and seeking a declaration to the effect that the plaintiff holds an equitable interest in the Taney Park premises and a well charging order in respect of that interest. On 20th April, 2015 the plaintiff registered a lis pendens over the Taney Park premises in respect of the proceedings. The defendant did not enter an appearance to the proceedings and on 7th December, 2015 the High Court (Gilligan J.) granted the plaintiff judgment in default of appearance and adjourned the assessment of damages. The plaintiff served a notice for trial on 4th May, 2016 and the matter was listed for hearing before judge Heneghan on 7th November, 2016. In the event the matter did not proceed, the judge who was assigned to hear it having retired shortly before the scheduled hearing date.

7 Meanwhile, the applicant has averred in separate proceedings that when she learnt of her husband's financial difficulties and of the plaintiff's claim she “demanded” that her husband “transfer Dael Lodge and the site” into their joint names. The transfer to this effect was executed on 18th September, 2015 and registered on Folio 114644F on 17th November, 2015. The plaintiff's motion for judgment had issued prior to this latter date on 7th November 2015. Despite the transfer being prompted by the plaintiff's proceedings, it seems that neither the applicant nor her husband, the defendant, brought it to the attention of the plaintiff. Therefore, the plaintiff proceeded with his application for judgment in default of appearance on 7th December, 2015 without any actual knowledge of the applicant's interest in the property although of course the plaintiff relies on the conclusive nature of the registration of her title some weeks earlier. Equally, notwithstanding the registration of the plaintiff's title, she had not sought to be joined as a party to the proceedings before the date on which judgment was sought in December, 2015.

8 Instead, on 10th May, 2018 the applicant issued separate proceedings against the plaintiff (Record No. 2018/4158P) in which she sought an order pursuant to s. 123 of the Land and Conveyancing Law Reform Act 2009 vacating the lis pendens which the plaintiff had registered over plan BN8MH, or alternatively, an order directing the plaintiff to apply to vacate the lis pendens and damages for negligence and slander of title. Those proceedings were prompted by the fact that the applicant and the...