Promontoria [Finn] Ltd v Markham
| Jurisdiction | Ireland |
| Judge | Mr. Justice Dignam |
| Judgment Date | 12 April 2024 |
| Neutral Citation | [2024] IEHC 201 |
| Court | High Court |
| Docket Number | [Record No. 2022/153 MCA] |
[2024] IEHC 201
[Record No. 2022/153 MCA]
THE HIGH COURT
Judgment of Mr. Justice Dignam delivered on the 12th day of April 2024 .
This is my judgment in respect of the applicant's application pursuant to section 123(b)(ii) of the Land and Conveyancing Law Reform Act 2009 and/or the Court's inherent jurisdiction for an Order vacating a lis pendens registered by the respondent on Folio 56271F of the Register of Freeholders, County Dublin (“the property”) and ancillary relief.
This was one of two applications heard by me on the same day; the other being an application for an interlocutory injunction brought by the applicant herein and a receiver appointed by it in separate proceedings entitled “ Tom O'Brien & Promontoria (Finn) Limited v Thomas Markham & Persons Unknown Occupying the Premises at 12 Woodford View, Clondalkin, Dublin 22 Record No. 2022/5534P”. That application is the subject of a separate judgment.
The immediate background to the current application is that on the 15 th July 2020, the respondent (“Mr. Markham”) commenced plenary proceedings against the applicant (“Promontoria”) and the receiver, Mr. O'Brien, in proceedings entitled and bearing record number “ Thomas Markham v Promontoria (Finn) Limited & Tom O'Brien Record number 2020/5097P”. On the same day, Mr. Markham filed a lis pendens in the Central Office of the High Court and subsequently lodged an application with the Property Registration Authority to have the lis pendens registered on Folio 65271F. It was registered on the 22 nd July 2020.
The plenary summons was not served on the defendants to those proceedings despite requests and Promontoria then issued this motion on the 9 th June 2022. The application is made by way of Originating Notice of Motion in circumstances where it could not have been brought in the proceedings issued by Mr. Markham in respect of which the lis pendens was registered because those proceedings had not been served. This was the procedure adopted in Hurley Property ICAV v Charleen Limited [2018] IEHC 611, the only authority to which I was referred. In any event, no issue has been raised to the bringing of the application by this procedural route. I deal with Mr. Markham's grounds of opposition below.
Section 123 of the Land and Conveyancing Law Reform Act 2009 (“the 2009 Act”) provides:
“Subject to section 124, a court may make an order to vacate a lis pendens on application by—
(a) the person on whose application it was registered, or
(b) any person affected by it, on notice to the person on whose application it was registered—
(i) where the action to which it relates has been discontinued or determined, or
(ii) where the court is satisfied that there has been an unreasonable delay in prosecuting the action or the action is not being prosecuted bona fide.”
Section 123(b)(i) is not relevant in the current application. Thus, Promontoria must establish that it is a person affected by the lis pendens, that the application is on notice to the person on whose application it was registered and that there has been an unreasonable delay in prosecuting the action or the action is not being prosecuted bona fide.
In reality, while Promontoria relies on the contention that the action launched by Mr. Markham is not being bona fide prosecuted, the main emphasis was on Mr. Markham's alleged unreasonable delay in prosecuting the action. Barniville J considered the question of delay in the context of an application under section 123 of the 2009 Act in Hurley Property ICAV v Charleen Limited [2018] IEHC 611. He said at paragraph 81:
“Having included a new jurisdiction to vacate a lis pendens (in the case of “unreasonable delay” in the prosecution of the action) it is clear that the Oireachtas intended to impose an obligation on a litigant who has registered a lis pendens to prosecute the proceedings expeditiously.”
He went on to say that this is an obligation over and above the obligations under the Rules of the Superior Courts in relation to the taking of steps in the proceedings and over and above the jurisdiction of the Court to dismiss proceedings for delay, and that when considering an application under section 123(b)(ii) on the grounds of delay the Court does not have to engage in the sort of assessment which a court must conduct in deciding whether to dismiss proceedings for delay. He said (also in paragraph 81) that section 123:
“…was intended to counterbalance the statutory entitlement conferred on a person in certain circumstances to register as of right a lis pendens and to impose a corresponding obligation on that person to expeditiously prosecute the proceedings in respect of which the lis pendens was registered. While the purpose of a registration of a lis pendens is, as Clarke J. explained in Morrissey, to bring to the attention of third parties who might be interested in acquiring the particular property or a charge over it the fact that there are proceedings in existence in relation to the property which might affect their interests, the registration of a lis pendens can adversely affect or hinder the ability of a person to sell his or her property or otherwise affect that person's ability to deal with the property…”
He went on at paragraph 82 to say:
“It seems to me, correctly construed, the provisions of s.123(b)(ii) of the 2009 Act impose a particular obligation on a person who has commenced proceedings and registered a lis pendens to move with greater expedition than would normally be required or than is required under the Rules of the Superior Courts. Such a person would, in my view, be required to act with particular “expedition and vigour” (to adopt the words used by Haughton J. in Togher) in the prosecution of the proceedings.”
He made clear that the focus of the Court must be the period after the commencement of the proceedings and said at paragraph 83:
“…The court must focus on what the person who has registered the lis pendens does in the prosecution of the action following its commencement. Further, while the question of unreasonableness in the context of a delay in the prosecution of proceedings will always depend on the context and on the particular facts, the policy of the section and the intention of the Oireachtas is clear. There is a particular and special obligation on a person who has issued proceedings and then registered a lis pendens for the purpose of those proceedings to bring those proceedings on expeditiously. That person is not permitted to sit back or to proceed with the action at leisure or to take time which might otherwise be tolerated or excusable in the conduct of the action. Since the expeditious prosecution of the proceedings is essential, a court considering whether to vacate a lis pendens under the first part of s.123(b)(ii) should not tolerate delays in the prosecution of the action, such as in the service of the proceedings or subsequent pleadings in the proceedings without very good reason. The absence of a good reason for a delay is likely to lead the court to conclude that the delay has been unreasonable for the purposes of the section.”
These principles have been adopted in several cases since.
Mr. Markham did not make any submissions at the hearing, saying that the arguments were set out in his affidavit and he did not have any further arguments. It is unclear from this affidavit whether he was opposing the application solely on the ground that there was no delay or that any delay was not unreasonable or whether he was also opposing it on the basis that Promontoria is not a person affected by the lis pendens. I have proceeded on the basis that Mr. Markham opposes the application on all of these grounds.
It is therefore necessary to set out the background and the evidence in some detail. I propose to set out the evidence which is deposed to on behalf of Promontoria. I am doing so because, while Mr. Markham puts the applicant on proof and makes a number of complaints and points in his affidavit, he does not specifically deny much of the content of Mr. Burke's affidavit. The only specific denial is his denial that he owes Promontoria a debt. There is in fact no other real conflict of fact.
Mr. Burke's evidence, as contained in his grounding affidavit of th 25 th May 2022, is as follows.
Pursuant to a letter of loan offer dated the 17 th November 2005, which was accepted by Mr. Markham on the 10 th December 2005, First Active plc advanced to Mr. Markham a loan facility of €260,000. The security was to be a mortgage over the property. By a Deed of Mortgage dated the 18 th December 2006, Mr. Markham charged the property in favour of First Active as security for all sums which were then or might thereafter become due and owing by Mr. Markham to First Active.
On the 15 th February 2010, Ulster Bank Ireland Limited acquired all rights accruing to First Active on foot of any existing loan or security instruments pursuant to the terms of the Central Bank Act 1971 (Approval of Scheme of First Active plc and Ulster Bank Ireland Limited) Order 2009 [SI 481/2009].
The mortgage was registered as a burden in favour of Ulster Bank Ireland Limited on Folio DN65271F on the 24 th January 2011.
Pursuant to a Global Deed of Transfer dated the 29 th September 2015 between Ulster Bank and Promontoria, Ulster Bank conveyed, assigned, transferred and assured to Promontoria all of its right, title, interest, benefit and obligation (past, present and future) in and under the loans and related security identified in the schedule thereto. The schedule to the Deed of Transfer, exhibited to Mr. Burke' affidavit, though heavily redacted, identified the loan offer and acceptance and the mortgage of the...
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