Rafferty v Crowley

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 01 January 1984
• Neutral Citation: 1983 WJSC-HC 3442
• Court: High Court
• Date: 01 January 1984

1983 WJSC-HC 3442

THE HIGH COURT

No. 233Sp. Ct. 5/1983

RAFFERTY v. CROWLEY

IN THE MATTER OF THE VENDOR AND PURCHASES

ACT 1874 AND

IN THE MATTER OP A CONTRACT MADE IN OR ABOUT

THE 14th MARCH 1983 BETWEEN ANN RAPFERTY OF

THE ONE PART AND PATRICK CROWLEY OF THE OTHER

PART POR THE SALE OP THE LEASEHOLD PREMISES

SITUATE AND KNOWN AS 35, DONORE ROAD, SOUTH

CIRCULAR ROAD IN THE CITY OP DUBLIN

BETWEEN:

ANN RAFFERTY

Plaintiff

and

PATRICK CROWLEY

Defendant

Citations:

CIVIL LIABILITY ACT 1961 S34(1)(b)

FACTORIES ACT 1955

Subject Headings:

REAL PROPERTY: incumbrance

SALE OF LAND: title

STATUTORY INTERPRETATION: ordinary meaning

1 JUDGMENT of Mr. Justice Murphy delivered the 24th day of June 1983

2 Whilst this matter comes before the Court by way of a summons under the Vendor and Purchaser Act 1874 in relation to problems arising on the sale of premises at 35, Donore Road in the City of Dublin from the Plaintiff to the Defendant, the purpose of these proceedings is to secure the decision of this Court for the benefit of the legal profession and through it all persons having dealings with building societies as to the proper interpretation of section 80 of the Building Societies Act 1976. That section provides as follows:-

"A society shall not make a loan on the security of any freehold or leasehold estate which is subject to a prior mortgage unless the prior mortgage is in favour of the society making the loan."

3 In the present proceedings the Plaintiff has asserted that a charge to secure an apportioned part of a leasehold rent does not constitute "a prior mortgage" within the meaning of that section. That assertion is disputed by the Defendant. If the Plaintiff's contention herein does not succeed this could have very far-reaching effects for building societies and their many clients.

4 How the particular problem arises in the present case is as follows. By an Indenture of Lease dated the 19th day of May 1904 (the 1904 Lease) Kate McElroy and others demised to Edward Lynch and another a plot of land measuring some 186 feet by 93 feet situate in the Parish of St. Catherine and City of Dublin being the lands more particularly described on the map endorsed thereon to hold the same unto the lessees from the 25th March 1904 for the term of 500 years subject to the yearly rent of £17/10s and subject also to the covenants therein contained including, in particular, a covenant to erect at least ten good and substantial private dwellinghouses on the demised premises. There were, in addition, the usual covenants to repair and insure.

5 There were subsequently erected on the demised premises eleven dwellinghouses later and now known as numbers 15, 17, 19, 21, 23, 25, 27, 29, 31, 33 and 35 Donore Road in the City of Dublin. One of those premises, that is to say, number 35 Donore Road was by an Indenture of Assignment dated the 17th day of October 1962 assigned by John R. Molony to James Desmond Farrell and Veronica Farrell for the residue of the term of years granted by the 1904 lease and subject of course to the covenants and conditions therein contained. However, the assignment contained in accordance with the well established conveyancing practice a provision to the effect that the assignees should be:-

"Subject to the yearly rent of £17/10s but primarily liable to the yearly rent of £1/11/10d portion thereof and indemnified against the remainder of the rent by "the other premises demised by the lease and not hereby assigned and subject also to the covenants, conditions and stipulations (other than the covenant for the payment of the said entire rent of £17/10s) in the lease contained and on the part of the lessees to be observed and performed so far as the same now relate to the premises hereby assigned and that the purchasers hereby covenant with the vendor that they the purchasers and the survivor of them and their assigns and the executors administrators and assigns of such survivor will henceforth during the continuance of the said term pay the said yearly apportioned rent of £1/11/10d and observe and perform the covenants on the part of the lessees and conditions therein contained and will indemnify and keep indemnified the vendor and the estate of Herbert C. Crozier deceased against all actions and proceedings costs damages expenses claims and demands whatsoever by reason or on account of the non-payment of the said rent or any part thereof or the breach or non-performance or non-observance of the said covenants and conditions or any of them and that the vendor hereby covenants with the purchasers that he will henceforth pay the remainder of the said yearly rent reserved by the said lease and will perform and observe all the covenants and conditions binding on the lessee contained in such lease so far as the same are applicable to such part of the hereditaments demised by such lease as are not hereby assigned and will keep...