Gannon v Young

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 23 October 2009
• Neutral Citation: [2009] IEHC 511
• Docket Number: [No. 741SP/2007]
• Court: High Court
• Date: 23 October 2009

[2009] IEHC 511

THE HIGH COURT

[No. 741SP/2007]

Gannon v Young

[2009] IEHC 511

BETWEEN

KEITH GANNON

PLAINTIFF

AND

CATHAL YOUNG AND ODRAN YOUNG

DEFENDANTS

COFFEY & MOYLAN v BRUNEL CONSTRUCTION CO LTD 1983 IR 36 1983/1/119

FARRELL IRISH LAW OF SPECIFIC PERFORMANCE 1994 PARAS 9.48-9.55

HORTENSIUS LTD & DURACK v BISHOP & ORS 1989 ILRM 294 1989/2/343

FARRELL IRISH LAW OF SPECIFIC PERFORMANCE 1994 PARA 10.11

JUDGMENTS (IRL) ACT 1844 S10

REGISTRATION OF TITLE ACT 1964 S69

LIS PENDENS ACT 1867 S2

FLYNN v BUCKLEY & JAMES WALLACE (MULLINGAR) LTD 1980 IR 423

RSC O.19 r5(2)

LAND LAW

Lis pendens

Vacate lis pendens - Burden on registered land - Applicable test for vacation - Whether claim of defendant for proprietary interest in lands against plaintiff bound to fail - Whether plenary proceeding in relation to the land prosecuted bona fide - Nature of lis pendens - Bona fide purchaser without notice - Grounds upon which defendants relied to negate plaintiffs ownership - Fraud - Illegality - Notice - Coffey v Brunel Construction Company Ltd [1983] IR 36 distinguished ; Hortensius Ltd v Bishop [1989] ILRM 294 considered; Flynn v Buckley [1980] IR 423 applied - Judgments (Ireland) Act 1844 (8 7 9 Vic, c 90), s 10 - Registration of Title Act 1964 (No 16), s 69 - Lis Pendens Act 1867 (30 & 31 Vic, c 47. ), s 2 - Rules of the Superior Courts 1986 (SI 15/1986) O 19 r 5(2) - Application to vacated refused and adjourned to be heard in conjunction with plenary proceedings (2007/741SP - Laffoy J - 23/10/2009) [2009] IEHC 511

Gannon v Young

Facts section 2 of the Lis Pendens Act 1867 provides that the Court before which the property sought to be bound is in litigation may "upon the determination of the lis pendens, or during the pendency thereof, where the Court shall be satisfied that the litigation is not prosecuted bona fide, make an order, if it shall see fit, for the vacating of the registration without the consent of the party who registered it ". The plaintiff applied for an order directing that a certain lis pendens registered by the defendants against certain lands be vacated. The defendants had in February, 2004, issued plenary proceedings against the vendors of the lands in dispute. They also sought therein to have the plaintiff's registered title on the relevant folio negated on the grounds that the contract was fraudulent and tainted with illegality and had been entered into at a time when the plaintiff had actual or constructive notice of the defendants' interest in the land. The plaintiff then issued a special summons against the defendants his case being that before the plenary proceedings had been initiated and registered as a lis pendens in the Central Office by the defendants he had contracted with the vendors to purchase the lands and had completed the purchase by paying the entire purchase money to the vendors and obtaining a transfer of the lands from the vendors. The vendors were not party to the proceedings. The plaintiff contended that, when he had paid the purchase money to the vendors on the 31st October, 2003, he became the beneficial owner of the lands and there was no interest remaining in the vendors which was capable of being captured by the lis pendens which was subsequently registered as a burden by the defendants.

Held by Ms. Justice Laffoy in refusing to direct that the lis pendens be vacated and linking the plaintiff's proceedings to the defendants' plenary proceedings that the test on an application to vacate a lis pendens, where the plenary proceedings were pending and the defendants, who registered the lis pendens, were not consenting, was whether the defendants, as plaintiffs therein, were prosecuting the plenary proceedings in relation to the lands bona fide. That involved showing that no issue of fact remained between the parties (Flynn v. Buckley [1980] I.R. 423 applied). If the defendants' claim as against the plaintiff was doomed to failure, they were not prosecuting the claim bona fide.

That the defendants were bona fide prosecuting their claim against the plaintiff.

Reporter: P.C.

Judgment of

Miss Justice Laffoy

1 delivered on the 23rd day of October, 2009.

The application

2 This is an application by the plaintiff for an order directing that a certainlis pendens registered by the defendants against the lands registered on Folio 8576F of the Register of Freeholders County Mayo (the lands) be vacated. The application was initiated by way of special summons which issued on 27^th September, 2007. The lis pendens which it is sought to have vacated was registered as a burden on Folio 8576F on 31^st March, 2004 as proceedings affecting the interest of Michael Dawney (otherwise Michael O'Duchanna) and Vincent Fegan (the vendors) in the lands "pending in the High Court". The proceedings in question are plenary proceedings which, as originally constituted, were between the defendants on this application, therein described as Odran Young and Cathal Young, as plaintiffs, and the vendors, as defendants, under Record No. 2004 No. 1261P (the plenary proceedings).

3 At the time this application was initiated the plaintiff was not a party to the plenary proceedings. He is now, having been joined as a co-defendant by order of the Court.

Material chronology and facts

4 In the plenary proceedings, which were initiated by a plenary summons which issued on 2^nd February, 2004, the defendants claimed an order for specific performance of an agreement dated 29^th June, 2003 between the vendors and the second defendant in trust for the first defendant for the sale by the vendors to the first defendant in trust of the lands at the price of €76,000 and alternative and ancillary relief. The lis pendens in relation to those proceedings was registered in the Central Office of the High Court on 19^th March, 2004 and, as I have stated, was subsequently registered as a burden on Folio 8576F on 31^st March, 2004.

5 The plaintiff's case is that before the plenary proceedings were initiated and registered as alis pendens in the Central Office and on Folio 8576F the plaintiff had contracted with the vendors to purchase the lands for €120,000 and had completed the purchase by paying the entire purchase money to the vendors and obtaining a transfer of the lands from the vendors. The date which appears on the contract between the vendors and the plaintiff is 31^st October, 2003. However, the plaintiff has averred that sometime in September 2003, on his first visit from his home in England to this jurisdiction to view the lands, he agreed with the vendors to purchase the lands for €120,000. Subsequently, he instructed solicitors to act for him in this jurisdiction. The vendors' solicitors furnished the contract on 9^th October, 2003. On 20^th October, 2003 the plaintiff came to Dublin and signed the contract, which was returned by his solicitors on 29^th October, 2003 to the vendors' solicitors. When the sale was closed on 31^st October, 2003, that date was inserted on the contract.

6 A complicating factor is that the contract between the vendors and the plaintiff shows the purchase price as €80,000. The plaintiff has averred on this application that after he did the deal with the vendors for €120,000 he was informed by the property agent based in Liverpool who had put him in touch with the vendors that the vendors suggested that he pay €40,000 of the purchase price "separately to the sum of €80,000", the latter sum being the figure which would appear in the contract and the conveyancing documentation. He acceded to that suggestion. When he completed the purchase on 31^st October, 2003, he paid the balance of the purchase money as shown in the contract, €72,000, through his solicitors, having already paid a deposit of €8,000 through his solicitors. He paid the sterling equivalent of €40,000 directly to the property agent in Liverpool on behalf of the vendors.

7 The plaintiff has averred on this application that registration of the transfer to him was delayed "solely by the issue of the apportionment of the stamp duty as between the residential and non-residential parts" of the lands. In a subsequent affidavit the plaintiff averred that the apportionment did not become available until about June 2004. It is not clear when the transfer from the vendors to the plaintiff was lodged in the Land Registry for registration. No copy of the transfer has been put before the Court on this application. I assume that it was after June 2004 and, perhaps, as late as early 2005.

8 In any event, the plaintiff was eventually registered as full owner of the lands on Folio...