Muintir Skibbereen Credit Union Ltd v Crowley
| Jurisdiction | Ireland |
| Court | Court of Appeal (Ireland) |
| Judge | Mr. Justice Gerard Hogan |
| Judgment Date | 13 July 2016 |
| Neutral Citation | [2016] IECA 213 |
| Docket Number | [C.A. Nos. 290 & 291 of 2015],2015, 290 2015, 291 |
| Date | 13 July 2016 |
[2016] IECA 213
THE COURT OF APPEAL
Hogan J.
2015, 290
2015, 291
Peart J.
Irvine J.
Hogan J.
Loans – Sale of property – Well charging order – Appellant seeking a well charging order and the sale of two separate properties – Whether it would be appropriate to grant an order directing the sale of jointly owned family homes to enable the discharge of a judgment debt obtained by a credit union against one of the spouses
Facts: The appellant, Muintir Skibbereen Credit Union, sought a well charging order and the sale of two separate properties which in both instances comprised family homes,?pursuant to s. 31 of the Land Law and Conveyancing Act 2009. In the first appeal (2015, No. 290), the first respondent, Mr Crowley, jointly owned the property comprised in Folio 77272F Co. Cork, with his wife, the second respondent. In the second appeal (2015, No. 291), the first respondent, Mr Hamilton, jointly owned the property comprised in Folio 5079F Co. Cork, with his wife, the second respondent. Both Mr Crowley and Mr Hamilton had engaged in relatively small scale property development in the general West Cork region. They both obtained loans from the Credit Union for this purpose, but following the property collapse in 2008 ultimately they proved unable to repay these loans. Their wives never signed any documentation providing the family homes as security and nor were they involved in any way in respect of their husband?s application for a loan. On 23rd January 2015, the High Court (White J) refused to grant the appellant the orders sought in these two cases. White J found that, as both respondents were in serious debt, 50% of the net proceeds any sale of the family home due to the spouses would not provide either family with sufficient resources to purchase another family home. The appellant appealed to the Court of Appeal against that decision.
Held by Hogan J that White J was clearly entitled to make his finding on the evidence available to him. Therefore, applying standard Hay v O?Grady principles (Hay v O?Grady?[1992] 1 IR 210), the Court held that it could not interfere. Hogan J held that the Court should not make an order for sale of the family homes in question pursuant to s. 31(2)(c) of the 2009 Act principally because the effect of any such order would be to direct the sale of the family home over the wishes of the innocent spouse who was not a party to the loan transaction which gave rise to the judgment mortgage in the first instance and who had never formally consented to same.
Hogan J held that the Credit Union was perfectly entitled to the appropriate well-charging orders in respect of both properties. However, since he considered that White J was correct in the conclusions he reached in declining to make an order for sale under s. 31(2)(c) of the 2009 Act, he dismissed the appeal.
Appeal dismissed.
These two appeals, which were heard together, raise essentially the same issue, namely, whether it would be appropriate to grant an order directing the sale of jointly owned family homes to enable the discharge of a judgment debt obtained by a credit union against one of the spouses? In a judgment delivered in the High Court on 23rd January 2015, White J. refused to grant the plaintiff, Muintir Skibbereen Credit Union (?the Credit Union?), the orders in these two cases which it had sought pursuant to s. 31 of the Land Law and Conveyancing Act 2009 (?the 2009 Act?): see Munitir Skibberreen Credit Union v. Crowley [2015] IEHC 107. The Credit Union has now appealed to this Court against this decision.
At the hearing of this appeal the Court was informed that this appeal represents the first occasion in which the principles governing the possible partition and sale of a family home have fallen to be considered by either this Court or the Supreme Court following the enactment of s.31 of the 2009 Act and its coming into force on 1st December 2009. This appeal accordingly raises issues of some considerable practical importance.
The decision of the High Court concerned two separate special summonses issued by the Credit Union against the defendants. In both cases the Credit Union sought a well charging order and the sale of two separate properties which in both instances comprised family homes. In the first appeal (2015, No. 290), the first defendant, Mr. Cornelius Crowley, jointly owns the property comprised in Folio 77272F Co. Cork, with his wife, Ms. Breda Crowley. In the second appeal (2015, No. 291), the first defendant, Mr. Brendan Hamilton, jointly owns the property comprised in Folio 5079F Co. Cork, with his wife, Ms. Breda Hamilton.
Both Mr. Crowley and Mr. Hamilton engaged in relatively small scale property development in the general West Cork region. Both defendants obtained loans from the Credit Union for this purpose, but following the property collapse in 2008 ultimately they proved unable to repay these loans. It may be convenient to consider first the particular circumstances of each defendant before proceeding to examine the legal issues which arise.
In the case of Mr. Crowley, judgment was obtained by the Credit Union on the 5th October, 2011 for the sum of ?562,500 and costs of ?355.98. On the 9th December, 2011 judgment was registered in the Land Registry on Folio 77272F Co. Cork. Similarly on the 9th December, 2011, judgment was registered in the Land Registry on Folio 5079F Co. Cork.
Mr. Crowley and Ms. Crowley were married on the 9th October, 1993 and they have three children aged 14, 9 and 7 respectively. Ms. Crowley never signed any documentation providing the family home as any security for the commercial loan and nor was she involved in any way in respect of her husband's application for a loan.
In the case of Mr. Hamilton, judgment was obtained by the Credit Union on for the sum of ?562,500 and ?345.98 for costs. Mr. and Ms. Hamilton were married on 2nd May, 1978. They have three children who are no longer dependant. As it happens, both Mr. Hamilton and Ms. Hamilton suffer from ill health. Just as with the case of Ms. Crowley, Ms. Hamilton never signed any documentation providing the family home as security and nor was she involved in any way in respect of her husband's application for a loan.
All other property assets which Mr. Crowley and Mr. Hamilton previously owned have subsequently been sold, so that the only properties which remain available to satisfy the judgment debts are the respective family homes.
In the High Court White J. refused to make the orders sought, saying:
?It is within the Court's discretion to decide if it is appropriate to grant the well charging order, and to order partition and sale. The Court in its discretion refuses the application of the plaintiff in respect of both defendants, for the following reasons:
?(1) Both the properties are the family homes of the respective defendants.
(2) Breda Crowley and Breda Hamilton, the spouses of the respective defendants, were never consulted about the commercial loan drawn down by the defendants from the plaintiff.
(3) The spouses, Breda Crowley and Breda Hamilton, never signed any documentation providing the family home as security.
(4) The personal circumstances of Breda Crowley with responsibility for three dependant children of ages 13, 8 and 6 and those of Mrs. Hamilton who is suffering from ill health are taken into account by the Court.
(5) Both defendants are in serious debt, and 50% of the net proceeds of any sale of the family homes due to the spouses, would not provide either family with sufficient resources to purchase another family home.
(6) The orders sought by the plaintiff are refused.?
The jurisdiction of the High Court to order partition or sale is now set out in s. 31 of the 2009 Act. This section provides:
?(1) Any person having an estate or interest in land which is co-owned whether at law or in equity may apply to the court for an order under this section.
(2) An order under this section includes:-
(a) an order for partition of the land amongst the co-owners,
(b) an order for the taking of an account of incumbrances affecting the land, if any, and the making of inquiries as to the respective priorities of any such incumbrances,
(c) an order for sale of the land and distribution of the proceeds of sale as the court directs,
(d) an order directing that accounting adjustments be made as between the co-owners,
(e) an order dispensing with consent to severance of a joint tenancy as required by section 30 where such consent is being unreasonably withheld,
(f) such other order relating to the land as appears to the court to be just and equitable in the circumstances of the case.
(3) In dealing with an application for an order under subsection (1) the court may:-
(a) make an order with or without conditions or other requirements attached to it, or
(b) dismiss the application without making any order, or
(c) combine more than one order under this section.
(4) In this section:-
(a) ?person having an estate or interest in land' includes a mortgagee or other secured creditor, a judgment mortgagee or a trustee,
(b) ?accounting adjustments' include:-
(i) payment of an occupation rent by a co-owner who has enjoyed, or is continuing to enjoy,...
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