Flynn v Crean

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 01 February 2019
• Neutral Citation: [2019] IEHC 51
• Court: High Court
• Docket Number: [2017 No. 29 SP]
• Date: 01 February 2019

[2019] IEHC 51

THE HIGH COURT

Baker J.

[2017 No. 29 SP]

IN THE MATTER OF THE LAND AND CONVEYANCING LAW REFORM ACT 2009

BETWEEN

MICHAEL FLYNN

PLAINTIFF

AND

PETER CREAN

AND

MICHELLE CREAN

DEFENDANTS

Judgment mortgage – Declaratory relief – Order for sale in default of payment – Plaintiff seeking a declaration that a judgment mortgage stands well charged on the defendant’s interest in lands – Whether in default of payment the property should be sold

Facts: The plaintiff, Mr Flynn, sought a declaration that a judgment mortgage registered on 14 September 2016 against the interest of the first defendant, Mr Crean, in the lands comprised in folio KY67603F of the Registrar of Freeholders, County of Kerry stands well charged. He also sought an order pursuant to s. 117 and/or s. 31 of the Land and Conveyancing Law Reform Act 2009 partitioning the said lands and providing for the sale of the property for the purposes of discharging the amount secured by the judgment mortgage. Various other ancillary orders were sought, including an order for the taking of all necessary accounts and inquiries and an order for possession.

Held by the High Court (Baker J) that, in the circumstances, the prudent and just approach to this case was to make an order for sale with a long stay and with conditions.

Baker J held that she would grant an order for sale of the property comprised in Folio KY67603F, County Kerry, with a stay, with such stay to continue provided a payment of €700 per month was made to the plaintiff, first payment on 15 March 2019, and thereafter monthly on 15th of each month, and provided payment was made on or before 15 December 2019 in the sum of €5,000. Baker J held that the stay was to continue to subsist provided payments were met, and on default of payment, the plaintiff was at liberty to return to court for the making of further orders on the giving of two days’ notice to the defendants. Baker J would not make an order that, in default of the making of any one payment, the property should be sold, as it was not possible to anticipate whether that would be a just result in the event that default occurred in, for example, three years’ time, where there would be relatively little outstanding on the judgment amount.

Relief granted.

JUDGMENT of Ms. Justice Baker delivered on the 1st day of February, 2019

1 The plaintiff seeks a declaration that a judgment mortgage registered on 14 September 2016 against the interest of the first defendant in the lands comprised in folio KY67603F of the Registrar of Freeholders, County of Kerry stands well charged. He also seeks an order pursuant to s. 117 and/or s. 31 of the Land and Conveyancing Law Reform Act 2009 (‘the Act’) partitioning the said lands and providing for the sale of the property for the purposes of discharging the amount secured by the judgment mortgage. Various other ancillary orders are sought, including an order for the taking of all necessary accounts and inquiries and an order for possession.

2 The plaintiff is a married man and he engaged the first defendant, Mr. Crean, to build an extension to his principal private residence in Ballybunion, County Kerry, to provide for a new family room and a new bathroom. He commenced proceedings by civil bill on 12 February 2015 seeking damages for breach of contract arising from defects in the premises including damp penetration and inadequate foundation works. By order of the Circuit Court made on 19 January 2016, judgment was entered against the first defendant in the sum of €30,000 together with costs to be taxed in default of agreement. That judgment was not discharged and a judgment mortgage was then registered against the first defendant's interest in the folio lands on 14 September 2016. While the first defendant had appealed the order of the Circuit Court, the appeal was withdrawn and thereupon the order became final and conclusive.

3 An attempt to execute through the Sherriff has proved fruitless.

4 The folio lands are the family home or principal private residence of Mr. Crean and his wife, Michelle Crean who has properly been joined as co-defendant, as her interest in the continued possession of the premises is now in issue. No argument is made or could be made that the judgment mortgage affects her interest in the home.

5 An examination of the burdens on the folio shows the judgment mortgage registered as a second burden on 14 September 2016, subsequent to a charge in favour of KBC Bank of Ireland plc registered on 17 September 2008 and in respect of which the outstanding balance is approximately €330,000.

6 Both defendants swore replying affidavits in each case on 24 March 2017. The matter first came on for hearing before me on 12 April 2018 and, following consideration of the evidence on affidavit and submissions made by counsel, I took the view that I did not have sufficient evidence of a coherent and vouched form to enable me to exercise the discretion vested in the Court by virtue of s. 31 of the Act to order the sale or partition of the premises. This is consistent with the approach taken by the authorities, especially the judgment of Dunne J. in Drillfix Ltd v. Savage [2009] IEHC 546.

7 On that date, however, being satisfied that the proofs for the making of a well charging order had been met, I made an order declaring that the judgment mortgage registered against the folio stood well charged against the interest of the first defendant in that property.

8 The matter was further adjourned, and the first defendant was directed to provide information in a sufficiently coherent and vouched manner to enable me to make further orders or directions.

9 Having regard to the fact that Mr. and Mrs. Crean were shown, by Mr. Crean's second affidavit, to pool their income and resources and jointly meet family and household expenses, when the matter came before me again on 21 November 2018, I directed that Mrs. Crean would furnish an affidavit showing her means and expenditure in the form of a statement of means and the matter was then adjourned and came on for hearing before me on 17 January 2019.

10 On 6 December 2018, when the matter came on for mention, the plaintiff indicated a desire to cross-examine both defendants on their respective affidavits and in regard to their respective means and outgoings, and I directed both defendants to present themselves for cross-examination on 17 January 2019 and dispensed with the service of a formal notice of cross-examination.

11 On the return date of 17 January 2019, Mr. Crean attended and presented himself for cross-examination but Mrs. Crean produced a letter furnished at the last minute to counsel and solicitor for the plaintiff indicating that her work commitments made it impossible for her to travel from County Kerry to attend court on that day as her work as an editor of a local commercial newspaper meant that Thursdays were particularly busy days for her. In those circumstances, and in order to avoid any further costs and expenses in the prosecution of the claim, counsel for the plaintiff reluctantly accepted that the attendance of Mrs. Crean for cross-examination would not now be required but asked that her non-attendance be noted by the court in its considerations.

12 Some of the evidence is uncontroverted. Mr. and Mrs. Crean reside in the subject property with their two young school going children. Their home was built on lands provided to the couple, or to Mr. Crean before the marriage, by his parents and immediately adjoins his parent's home and his siblings, or some of his siblings, also have homes nearby. In her affidavit, Mrs. Crean argues that it would be oppressive, disproportionate, and unjust that her family home be sold in order to discharge a judgment that has nothing to do with either her or her children.

13 Mr. Crean is a carpenter and in his affidavit expresses his intention to satisfy the judgment, an intent he expressed also in the course of his oral evidence, albeit he says that he is not in a position to meet the judgment in his present circumstances, and he has not paid any part of the judgment since it was entered. In his first replying affidavit sworn on 24 March 2017, he said he had then secured employment with a construction company and was in a position to make instalment payments for the satisfaction of the debt. No payments were made at that juncture, and no amount was identified that he believed he could then afford to pay.

14 In the course of his evidence before me on 17 January 2019, Mr. Crean said that he expected to return to work full time in his own business ‘in the next few weeks’ and that he hoped the business would be successful. In that content, he offered an instalment payment of €200 per month which was rejected by the plaintiff as the plaintiff correctly argued that it would take twelve years to pay off the debt, or more, if the costs were to be included.

15 Somewhat curiously, Mr. Crean, in the course of his oral evidence, said he had been unable to work due to a neck injury, but this is not referred to at all in his affidavit of 24 March 2017 by which he first replied to the plaintiff's claim.

16 In his oral evidence, Mr. Crean says that his previous construction business collapsed during the recession and that he was unemployed and had no source of income until relatively recently. He says he has a number of creditors to whom he makes payments, but his affidavit of means sworn on 8 November 2018 shows no debts other than the debt secured by mortgage on the family home, nor is there any reference to any repayments of other creditors in the expenditure accounts furnished by him.

17 It is noteworthy, also, that Mr. Crean gave no direct oral evidence regarding other creditors or the amounts owed or being paid to them, save in regard to a small Revenue debt or fine which he disclosed after he was pressed by counsel for the plaintiff and...