Jacob v Walsh & Bank of Ireland
| Jurisdiction | Ireland |
| Judge | Ms. Justice Murphy |
| Judgment Date | 10 October 2015 |
| Neutral Citation | [2015] IEHC 710 |
| Court | High Court |
| Date | 10 October 2015 |
[2015] IEHC 710
THE HIGH COURT
AND
Contract – Practice & Procedure – O. 19, r. 28 of the Rules of the Superior Court – The Registration Act 1964 – S. 70(1)(g) of the Land Registration Act 1925 – Striking off proceedings
Facts: The plaintiffs sought an order for judgment in default of defence against the third named defendant in the claim initiated by the plaintiffs for a declaration that they were entitled to vendor's lien and charge over certain registered properties which were transferred to the first and second named defendants by a contract of sale. The plaintiffs also sought an order that the said liens took priority over the registered charge of the third named defendant. The third named defendant sought an order for striking out the plaintiffs' claim under o. 19, r. 28 of the Rules of the Superior Court. The plaintiffs claimed that since they were in occupation of the relevant properties at all times, the Bank was obliged to make inquiry regarding their occupation before taking its charge over those properties. The Bank claimed that since a vendor's lien was an interest capable of registration under s. 69 of the Registration Act 1964, it could not be the right of persons under s. 72 (1) of the said Act of 1964.
Mr. Justice Brian J. McGovern refused to grant an order for judgment in default to the plaintiffs. The Court also refused to grant an order for striking out the claim of the plaintiffs. The Court proposed to remit the matter for plenary hearing. The Court observed that the discretion of the Court could not be invoked for striking out the proceedings unless the defendant had established that the case was bound to fall and in the present case, the claim of the plaintiffs did not warrant such a conclusion.
JUDGEMENT of Ms. Justice Murphy delivered on the 10th day of October, 2015
1. Before the Court are two applications. The first is the plaintiff's application for judgment in default of defence. This motion was issued against the third named defendant solely. It is grounded on the affidavit of Ethna Ryan solicitor, who simply deposes as to the third defendant's failure to file its defence. The plaintiffs' underlying claim is for a declaration that they are entitled to a vendor's lien and/or charge over certain registered properties which were transferred to the first and second named defendants pursuant to a contract of sale but in respect of which the purchase price remains unpaid. The plaintiffs seek a further declaration that the said liens/charges take priority over the registered charge of the third defendant. In response, the third named defendant in these proceedings issued a counter motion seeking an order striking out the plaintiffs' claim under Order 19, Rule 28 of the Rules of the Superior Court or in the alternative under the inherent jurisdiction of the court.
2. The plaintiffs are farmers and reside at Monawilling, Oulart, Gorey, Co Wexford and 7 St Johns Terrace, Enniscorthy, Co Wexford respectively. The first named defendant is a gentleman and resides at Ballyvadden, Kimuckridge, Gorey, Co. Wexford. The second named defendant is a gentleman and resides at 2 Westbuw Wood, Enniscorthy, Co. Wexford. The third named defendant is a bank and has its registered office at Century House, Mayor Street Lower, IFSC, Dublin 1.
3. By contract dated in or about 2007, the first named plaintiff agreed to sell and the first and second named defendants agreed to buy, the lands now registered in Folio 55053F County Wexford ("the first property") for the sum of €750,000. By further contract dated in or about 2007 the second named plaintiff agreed to sell and the first and second named defendants agreed to buy the lands now registered in Folio 5682 County Wexford ("the second property") for the sum of €750,000. In the Replies to Objections and Requisitions on Title provided in respect of both the first and second properties, the first and second named plaintiffs confirmed to the first and second named defendants that vacant possession would be handed over on closing.
4. By transfer dated in or about 2007 the first property was transferred to the first and second named defendants without the full purchase price of €750,000 having been discharged. According to the plaintiffs' statement of claim a balance of €690,000 remains outstanding. The contract for sale records a balance of €675,000 and specifies a closing date of 18 th October, 2007. By transfer dated in or about 2007 the second property was also transferred to the first and second named defendants with a balance of €690,000 remaining outstanding, according to the contract for sale and the plaintiff's statement of claim.
5. The third named defendant, Bank of Ireland, advanced funds of €1 million to the first and second named defendants, to conclude the purchase of the first and second properties. According to the affidavit of the third named defendant's solicitor, the Bank was provided with certain documentation in the context of its agreement to provide finance to the first and second named defendants and for the purpose of taking security for such finance, including contracts for sale in respect of both the first and second properties. The Bank's agreement to provide such funds, which were provided jointly to the first and second named defendants, was based on a certificate of title provided by Traynor & Co. Solicitors on the 21 st February 2008. A deed of mortgage and charge were executed by the first and second named defendants on 28 th February, 2008 and registered as a first legal charge against both folios in the Land Registry. The folios do not disclose any residual or remaining interest in the lands on the part of the former owners, whether in the form of a registered burden or otherwise.
6. According to the affidavit of the plaintiffs, Mssrs. Christopher and James Jacob, Mr. Joseph Traynor acted as solicitor for both the plaintiffs as vendors and the first and second named defendants as purchasers. The plaintiffs state that Mr. Traynor would have been aware that the first and second named defendants had drawn down funds from the third named defendant and that these funds were not passed on to the plaintiffs. The plaintiffs state that Mr. Traynor has since been struck off the roll of solicitors and the plaintiffs have commenced proceedings against him.
7. The plaintiffs accept that the signatures appearing on the contracts of sale and other relevant documents are theirs respectively. However, they state that they were not clear as to the nature of their dealings with the first and second named defendants and were unaware that the first and second properties would be formally transferred into any other name. The plaintiffs state that had they been so aware they would not have executed such documents and further note that the family home of Mr. Christopher Jacobs is located on one of the properties and that he would never have agreed to its sale.
8. However, the third named defendant's solicitor, Mr. O'Dowd, in his affidavit on it's behalf, avers that the second named plaintiff, Mr. James Jacob, had actual knowledge of the Bank's charge over the lands, because on or about November 2009 consent was sought by Mr. Traynor, solicitor, from the third named defendant to register a right of way over the transferred lands in favour of one of the plaintiffs, to gain access to a dwelling house which was not part of the lands included in the sale. While the affidavit of Mr. O'Dowd refers to the second named plaintiff, Mr. Christopher Jacob, the solicitor's correspondence appears to refer to the first named plaintiff, Mr. James Jacob. In this regard, Mr. O'Dowd exhibits a letter dated 24 th November, 2009 from Traynor & Company Solicitors, who it would appear in this context were acting for the first and second named defendants. The letter read as follows:
"We refer to the above matter and wish to advise that it has only come to light that the transfer from James Jacob to Sam & George Walsh should have been subject to a Right of Way in favour of the Vendor, James Walsh (sic) from the points A to B (as shown on the enclosed map herewith) in order for Mr, Jacob to gain access to the dwellinghouse from the public road."
We would therefore be obliged in you might confirm that it is in order for use to lodge a Grant of Right of Way in the Land Registry and associate same with your application."
Consent was furnished by the third named defendant in this regard, through its solicitors, on 8 th April, 2010.
9. Mr. O'Dowd further avers that subsequently, with actual knowledge of the third named defendant's interest in the property, the plaintiffs failed to inform the third named defendant of their alleged vendor's lien or to attempt to register such on the folios of the respective properties, in the Land Registry.
10. The plaintiffs say that at all times following the transfers they remained in occupation of the respective properties which formed the subject matter of the first and second contracts. They state that no vacant possession of any sort was handed over to the first and second named defendants on closing and that they continued in occupation of the lands following the closing date and at all times thereafter in the same way in which they had been in occupation prior to that date. The first and second named defendants defaulted on their repayment obligations under the mortgage agreement with the third named defendant. In February 2013, the third named defendant appointed Mr. David Walsh as receiver over the properties in reliance upon its claimed first...
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