Promontoria (Oyster) Dac v Desmond Greene

• Jurisdiction: Ireland
• Judge: Mr Justice Maurice Collins
• Judgment Date: 26 March 2020
• Neutral Citation: [2021] IECA 93
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record No 2020/91

Between

Promontoria (Oyster) Dac

Plaintiff/Appellant

and

Desmond Greene

Defendant/Respondent

[2021] IECA 93

Costello J.

Collins J.

Binchy J.

Court of Appeal Record No 2020/91

THE COURT OF APPEAL

CIVIL

Well charging order – Order for sale in default of payment – Facilities – Appellant seeking a well charging order and order for sale in default of payment in respect of lands owned by the respondent – Whether the date of the creation of an equitable mortgage is a necessary proof that has to be established in evidence in well-charging proceedings

Facts: The appellant, Promontoria (Oyster) DAC (Promontoria), in April 2018, brought proceedings in the High Court for a well charging order and order for sale in default of payment in respect of lands owned by the respondent, Mr Greene, comprised in Folio 10081F of the Register County Westmeath. Those lands did not include the family home of Mr Greene. Promontoria claimed that a total amount of €210,954 was due and owing to it by Mr Greene arising from three separate facilities which had been advanced by Ulster Bank Ireland Ltd (Ulster Bank) but which had subsequently been transferred to Promontoria. The facilities were, it was said, secured by a lien registered in favour of Ulster Bank on Folio 10081F pursuant to s. 73(3) of the Registration of Deeds and Title Act 2006, the benefit of which had also been transferred to Promontoria. That lien arose from an earlier equitable mortgage created by the deposit by Mr Greene of the land certificate relating to Folio 1008F with Ulster Bank. Promontoria’s claim was only partly successful. For the reasons set out in his Judgment of 24 February 2020, Simons J held that Promontoria was entitled to the orders sought by it in respect of two of the relevant facilities (the Second and Third Facilities) but refused relief in relation to the other facility (the First Facility). The Judge held that Promontoria had failed to establish that any sum was due and owing on foot of the First Facility at the time of the institution of the proceedings and, separately, he considered that Promontoria had failed in a necessary proof in that it had failed to establish clearly when the equitable mortgage by deposit had been created. Promontoria appealed to the Court of Appeal against that part of the Judgement and Order of the High Court. The appeal raised a number of issues, some procedural and/or evidential in nature but it also raised important issues concerning the interpretation and effect of s. 73 of the 2006 Act.

Held by Collins J that the Judge erred insofar as he held that the date of the creation of an equitable mortgage is a necessary proof that has to be established in evidence in well-charging proceedings. Collins J was of the view that that was not a necessary proof. Collins J held that, in any event, there was uncontested evidence of that date before the High Court. Collins J also concluded that the Judge erred in refusing leave to Promontoria to file a “corrective affidavit” to address the error made by Mr Prendiville regarding the general conditions governing the First Facility. On the basis of these conclusions, Collins J held that he would allow Promontoria’s appeal, set aside the Judge’s order declining relief in relation to the First Facility and remit that aspect of Promontoria’s claim to the High Court for rehearing. Collins J held that the management of the remitted proceedings would be a matter for the High Court but it follows from this judgment that Promontoria should be afforded an opportunity to deliver its “corrective affidavit” and Mr Greene should obviously have an opportunity to respond to it. Collins J held that any further directions would be a matter for the High Court.

Collins J held that the appropriate order to make in relation to the costs of the High Court to date was to set aside the order made by the Judge and to reserve those costs to the High Court judge that ultimately hears the remitted proceedings. Collins J’s provisional view was that Promontoria should get 50% only of the costs of the appeal, subject to a stay pending the final determination of the proceedings.

Appeal allowed.

Unapproved

No redactions required

JUDGMENT of Mr Justice Maurice Collins delivered on 26 March 2020

INTRODUCTION

1 In April 2018, the Appellant (“ Promontoria”) brought proceedings in the High Court for a well charging order and order for sale in default of payment in respect of lands owned by the Respondent (“ Mr Greene”) comprised in Folio 10081F of the Register County Westmeath. These lands do not include the family home of Mr Greene. Promontoria claimed that a total amount of €210,954 was due and owing to it by Mr Greene arising from three separate facilities which had been advanced by Ulster Bank Ireland Limited (“ Ulster Bank”) but which had subsequently been transferred to Promontoria. 1 The facilities were, it was said, secured by a lien registered in favour of Ulster Bank on Folio 10081F pursuant to section 73(3) of the Registration of Deeds and Title Act 2006 ( “the 2006 Act”) the benefit of which had also been transferred to Promontoria. That lien arose from an earlier equitable mortgage created by the deposit by Mr Greene of the land certificate relating to Folio 1008F with Ulster Bank.

2 This form of action – historically referred to as a “ mortgage suit” – is familiar and long-established. 2 Order 3, Rule 15 RSC (read with Order 54, Rule 3) provides that it is to be commenced by special summons and Appendix B, Part III RSC helpfully sets out the standard form reliefs to be claimed in the special indorsement of claim. Order 51 RSC provides for the making of an order for sale. In general, the sole defendant is the mortgagor. No other mortgagee or incumbrancer is required to be served unless they are in actual possession of, or in receipt of the rents and profits of, the lands in suit (Order 15, Rule 29). However, the Court has the power to permit or direct the joinder of additional parties. The action is normally heard on affidavit, subject to the general entitlement of each party, exercisable without leave, to cross-examine the other party's deponents (Order 38, Rule 3) and subject also to the power of the Court to direct an oral hearing in respect of any contentious questions of fact (Order 38, Rule 8).

3 The form of order to be made by the Court, where satisfied that the plaintiff is entitled to the relief sought, is also well-established. That order will (i) declare that the monies secured by the mortgage stand well charged on the defendant's interests in the lands; (ii) order that, in default of payment of those monies (along with any further interest that may accrue) within the period specified by the Court (and the Court has significant discretion in this respect), the lands should be sold on such conditions of sale as shall be settled by the Court and (iii) direct the Examiner's Office to take an account of all incumbrances subsequent to as well as prior to and contemporaneous with the plaintiff's demand and make an inquiry as to the respective priorities of all such demands. 3 An order in precisely such terms was in fact made by the High Court here.

4 Here, Promontoria's claim was only partly successful. For the reasons set out in his Judgment of 24 February 2020, Simons J held that Promontoria was entitled to the orders sought by it in respect of two of the relevant facilities (to which I will refer for convenience as the Second and Third Facilities) but refused relief in relation to the other facility (to which I shall refer as the First Facility). It will be necessary to examine the Judge's reasoning in more detail in due course but, briefly, he held that Promontoria had failed to establish that any sum was due and owing on foot of the First Facility at the time of the institution of the proceedings and, separately, he considered that Promontoria had failed in a necessary proof in that it had failed to establish clearly when the equitable mortgage by deposit had been created.

5 Promontoria appeals against that part of the Judgement and Order of the High Court. The appeal raises a number of issues, some procedural and/or evidential in nature but it also raises important issues concerning the interpretation and effect of section 73 of the 2006 Act. For that reason, this appeal was heard with two other appeals raising issues relating to that provision, Promontoria (Oyster) DAC v McKenna (also an appeal by Promontoria from a decision of Simons J) and Promontoria (Oyster) DAC v McHale (an appeal by Mr McHale from a decision of Barton J in the High Court). The Court also gives its decisions on those other appeals today.

6 For the reasons set out in this judgment, I would set aside the Judgment and Order of the High Court insofar as it relates to the First Facility and would remit that part of Promontoria's claim to the High Court for determination in accordance with this judgment.

THE HEARING IN THE HIGH COURT

AND THE JUDGMENT OF SIMONS J.

7 The proceedings were returnable to the Master and were in due course transferred into the Chancery Special Summons list for hearing, where they were adjourned from time to time. The Special Summons (dated 12 April 2018) was grounded on an affidavit of Albert Prendiville, a Director of Promontoria, sworn on 4 April 2018. A further affidavit was sworn by Mr Prendiville on 26 April 2019. So far as necessary, I will refer in more detail to these affidavits below. No affidavit was sworn by or on behalf of Mr Greene in reply to Mr Prendiville's affidavits.

8 The proceedings came on for hearing before Simons J on 25 November 2019. While Mr Greene did not consent to any of the orders sought, it appears that he did not contest Promontoria's claim insofar as it related to the Second and Third Facilities. However, his Counsel made submissions disputing its entitlement to relief in respect of the...