Hickey v Carlyon
| Jurisdiction | Ireland |
| Judge | Mr. Justice David Keane |
| Judgment Date | 12 June 2016 |
| Neutral Citation | [2016] IEHC 396 |
| Docket Number | [1999 187SP] |
| Court | High Court |
| Date | 12 June 2016 |
[2016] IEHC 396
[1999 187SP]
THE HIGH COURT
Property & Conveyancing – Judgment debtor – Judgment mortgage – Sale proceeds – Examiner's Certificate of Account and Inquiry – Entitlement of interest accrued on the property – Expiry of the period of limitation – S. 11 (6) (b) of the Statute of Limitations 1957 – Right of the secured creditor – Non-application of the limitation statute – Retaining of the arrears of interest.
Facts: Following a well charging order and a direction to sell certain lands and premises after the failure by previous defendants to pay judgement debt, an issue arose whether the plaintiff would be entitled to all of the interest that had accrued to the date on the principal moneys found due under the well charging order after the expiry of six years in light of the limitation imposed under s. 11 (6) (b) of the Statute of limitations 1957. The defendant contended that the plaintiff would be only entitled to six years' arrears of interest on the principal and interest found well charged on the property in 1999.
Mr. Justice David Keane declined to consider the plaintiff's application for an order directing the payment out of the principal moneys covered by the well charging order. The Court reiterated that the plaintiff sought to recover amount due to him as a secured creditor, rather than as a mere judgment creditor. The Court held that the plaintiff would be a secured creditor. The Court observed that the plaintiff being a mortgagee, who had obtained the sale of the mortgaged property, under long settled principles would be entitled, as such, to retain all arrears of interest, whether or not statute-barred, before accounting to the mortgagor for the surplus.
On the 15th November 1999, the Court made a well charging order and directed the sale of certain lands and premises, followed by the appropriate accounts and inquiries in the Examiner's Office. In circumstances that I will shortly describe, the said lands and premises were not finally sold until March 2013 and the proceeds of that sale, amounting to €280,000, were afterwards lodged in court in June of that year.
The Assistant Examiner of the High Court now seeks the Court's direction on whether interest on the principal sum and costs that were found to be well charged on the property concerned runs to the date of payment out of court of the sale proceeds, as the order recites on its face, or is limited to six years arrears of interest on those moneys by operation of the Statute of Limitations 1957 (‘the Statute’).
Subsequent to the Assistant Examiner's request for a direction, the plaintiff brought an application by motion on notice seeking, presumably on an interim basis, an order directing the Examiner to pay out the principal moneys covered by the well charging order.
I will deal with each of those matters in turn.
On the 1st April 1998, the plaintiff obtained judgment against the defendant in the sum of Ir£60,500, the euro equivalent of which is €76,835 (‘the judgment debt’).
The defendant failed to discharge the judgment debt and, on the 20th August 1998, the plaintiff registered a judgment mortgage against certain property of the defendant.
The judgment debt remained unpaid. The plaintiff next commenced a mortgage suit, as a process of execution, and, on the 15th November 1999, this Court (per Laffoy J.) made a well-charging order and an order for sale of the property in the event of non-payment of the debt. The material portion of the operative part of that Order states:
‘The Court doth declare that the principal moneys secured by the said Judgment Mortgage created by the registration as aforesaid of an office copy of a Judgment Mortgage Affidavit, the interest thereon, the costs of such registration and the costs hereinafter awarded stand well charged on the Defendant's interest in the said land and premises.
And It Appearing that there is due to the Plaintiff on foot of the said Judgment Mortgage a sum of £60,500.00 for principal and an unascertained sum for costs and interest on the said sums at the rate of £8 per cent per annum from the 1st July 1998 to date of payment.’
The defendant appealed that decision to the Supreme Court. In 2003, the Supreme Court affirmed the Order of the High Court.
In 2006, the defendant purported to convey the property into joint names with his son, in spite of the existence of the orders just described. That resulted in further proceedings, which culminated the following year in a declaration made by the High Court (per McGovern J.) that the said conveyance was fraudulent and, hence, void.
In 2008 the conditions of sale of the property were fixed. However, the process of sale of the property was delayed once more when, in early 2009, the defendant's son issued Circuit Court proceedings in which he sought various declarations concerning the property, together with an order joining him as a notice party to these proceedings. Those proceedings were dismissed by the Circuit Court in the autumn of that year. The defendant's son appealed that decision to the High Court and that appeal was refused in February 2010.
An order for possession of the property was granted in mid-2010, subject to a seven month stay. The County Dublin sheriff took possession of the property in September 2011 and, after an unsuccessful public auction, an order approving terms of sale by private treaty was made in December of that year. The property was ultimately sold in March 2013, realising a sum of €280,000. The sale proceeds were lodged in court on the 25th of June 2013.
Although the Examiner's Certificate of Account and Inquiry was filed on the 10th October 2013, the finalisation of the associated payment schedule depends upon the direction now sought.
The issue presented is whether the plaintiff is entitled to all of the interest accrued to date on the principal moneys found due under the well charging order that was made on the 15th November 1999 or may only recover six years arrears of interest on that sum, by operation of the terms of s. 11 (6) (b) the Statute.
The plaintiff submits that he is entitled to recover the principal moneys together with all of the interest that has accrued upon that sum since the making of the well-charging order, without prejudice to his application for the payment out of the principal moneys on an interim basis. The defendant has elected to play no part in the consideration of either matter.
As the Assistant Examiner has raised certain concerns about the proper interpretation and application of the relevant statute and case law, it is to that law that I now turn.
S. 11(6) of the Statute provides:
‘(a) An action shall not be brought upon a judgment after the expiration of twelve years from the date on which the judgment became enforceable.
(b) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.’
The leading case on whether s. 11(6)(b) of the Statute captures the interest due on monies declared well charged on a property is that of this Court in Ulster Investment Bank v. Rockrohan Estate Limited [2009] IEHC 4.
In 1981, the defendant in that case (‘Rockrohan’) had entered into a debenture with the plaintiff (‘UIB’) guaranteeing the indebtedness of a connected company that defaulted on its debt the following year. Under the debenture, Rockrohan had provided UIB with an equitable charge over certain lands in the form of a covenant that permitted the sale of those lands in the event of such default to recover the borrower's indebtedness to UIB.
In 1987, UIB obtained a well charging order (i.e. an order that the principal and interest then due stood well charged against Rockrohan's lands), together with an order for the sale of those lands, against Rockrohan.
In 2008, at the conclusion of many years of related litigation, UIB moved for an order for possession of the lands to facilitate that sale and Rockrohan responded by seeking various reliefs, including two that are relevant to the direction now sought. The first of those was a declaration that UIB's application for an order of sale was statute barred under, among other provisions, s. 11 (6) (a) of the Statute as an action brought on a judgment more than twelve years after that judgment became enforceable. The second was a declaration, presumably in the alternative, that the arrears of interest due from Rockrohan to UIB on foot of the said well charging order were limited to six years interest pursuant to the terms of s. 11 (6) (b) of the Statute.
In deciding that neither of those propositions was correct, Irvine J. drew particular assistance from three English cases: Ezekiel v Orakpo [1997] 1 WLR 340; Lowsley v Forbes (trading as L.E. Design Services) [1999] 1 A.C. 329; and Yorkshire Bank Finance Ltd v Mulhall [2008] EWCA Civ. 1156.
Before considering those cases, it may be helpful to compare and contrast the relevant law in each jurisdiction.
A comparison between the provisions of s. 11 (6) of the Statute and those of s. 24 of the UK Limitation Act 1980, which applies to England and Wales, establishes that they are couched in identical terms, save that the twelve year limitation period on taking an action upon a judgment in s. 11 (6) (a) of the Statute is...
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