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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Irwin v. Deasy [2004] IEHC 104 (1 March 2004) URL: http://www.bailii.org/ie/cases/IEHC/2004/104.html Cite as: [2004] 4 IR 1, [2004] IEHC 104 |
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[2004] IEHC 104
[2003 No. 151 Sp.]
BETWEEN
PLAINTIFF
DEFENDANT
JUDGMENT of Ms. Justice Finlay Geoghegan dated the 1st day of March 2004.
The plaintiff is the Collector General of the Revenue Commissioners. He has obtained three judgments against the defendant, one in the High Court and two in the Cork Circuit Court in respect of sums due by the defendant to the Revenue Commissioners.
The defendant and his wife Carmel Deasy are the joint owners of the lands comprised in Folio 8249 Co. Cork. The land therein comprises 19.5 hectares and it is averred by the plaintiff that it does not contain a family home within the meaning of the Family Home Protection Act, 1976. The said folio also contains an entry relating to a right of residence of one Hannah Deasy and it is averred by the plaintiff that the said Hannah Deasy died on the 27th October, 2000.
Each of the three judgments of the plaintiff against the defendant have been converted into judgment mortgages and the said judgment mortgages have been registered on Folio 8249 Co. Cork.
The plaintiff in these proceedings essentially seeks:
1. A declaration that each of the said judgments stands well charged on the defendant's interest in the lands and premises contained in Folio 8249 Co. Cork.
2. An order for payment of the sums alleged due on the said judgments together with continuing interest.
3. In default of payment, an order for the sale in lieu of partition of the aforesaid lands and premises and for the payment to the plaintiff out of the proceeds thereof of the sum found to be due and owing to the plaintiff following all necessary accounts and enquiries.
The proceedings were duly served by personal service on the defendant on the 10th April, 2003. An appearance was entered on behalf of the defendant and his solicitor appeared but did not make any submission on his behalf before me. The defendant's spouse and co-owner Carmel Deasy has been served with notice of the proceedings. She has not appeared.
Notwithstanding the lack of opposition, the plaintiff must satisfy the court on the pleadings, affidavits and exhibits that it has jurisdiction to grant the reliefs sought.
When the matter came up for hearing before me in the Monday Special Summons List I was satisfied that the plaintiff was entitled to the well charging and payment orders sought. However, I sought submissions from counsel for the plaintiff as to the jurisdiction of this court to make an order for sale in lieu of partition of registered lands at the request of a judgment mortgagee and further, if the court has such jurisdiction, its ability to make such an order in the absence of Carmel Deasy, the co-owner of Folio 8249, as a party to the proceedings.
Counsel for the plaintiff has made helpful submissions both in writing and orally. I have had an opportunity of considering these, the authorities referred to, and certain other older texts, and have reached the following conclusions.
The registration of the judgment mortgage affidavit by the plaintiff on Folio 8249 Co. Cork operates to charge the interest of the judgment debtor (the defendant in this case) therein. In accordance with s. 71 of the Registration of Title Act, 1964 the plaintiff has
". . . such rights and remedies for the enforcement
of the charge as may be conferred on him by order
of the court."
A charge so registered is a burden on the lands comprised in the said folio in accordance with s. 69 of the Act of 1964. Accordingly, it appears that the combined effects of s. 69 and s. 71 of the Act of 1964 mean that following the registration of each of the judgment mortgage affidavits on the folio there is registered as a burden against the lands comprised in the folio a charge against the defendants interest in the said lands to secure the judgment to which the judgment mortgage affidavit refers. The plaintiff as the judgment creditor only has the rights conferred on him by statute and cannot be considered to have any right to the ownership or possession of the lands comprised in the folio. The only rights conferred by statute are those already referred to in s. 71 of the Act of 1964, namely "such rights and remedies for the enforcement of the charge as may be conferred on him by order of the court". A judgment creditor who has registered a judgment mortgage affidavit against registered lands has not been granted by the Act of 1964 any rights analogous to those rights conferred on the registered owner of a charge created by the owner of the registered land. An owner of a charge created by the owner has, pursuant to s. 62 (6) of the Act of 1964, "all the rights and powers of a mortgagee under a mortgage by deed, including the power to sell the estate or interest which is subject to the charge."
Section 71 of the Act of 1964 purports in its express wording to give the court a wide discretion as to the orders it may make for the purpose of enforcing the charge created by the registration of the judgment mortgage affidavit. The section must be given an interpretation consistent with the Constitution. This necessitates avoiding a construction which would permit either an unjust attack on the property rights of persons other than the judgment debtor and also only interfering with the property rights of the judgment debtor to the extent necessary to permit the judgment creditor to realise the charge created by the registration of the judgment mortgage affidavit.
To give such a constitutional construction it appears to me that the courts should have regard to the type of orders it traditionally makes pursuant to its equitable jurisdiction for the purpose of enforcing a charge created by the registration of a judgment mortgage against unregistered lands. The probable intention of the Oireachtas in enacting s. 71 (4) of the Act of 1964 was to give the court a jurisdiction to make orders for the purpose of enforcing the charge created by the registration of a judgment mortgage on registered land similar to those the courts make for the purpose of enforcing a judgment mortgage registered in the Registry of Deeds against unregistered land.
The position of a judgment mortgagee of unregistered land under s. 7 of the Judgment Mortgage (Ireland) Act, 1850 is that the registration of the affidavit of judgment in the Registry of Deeds operates
"… to transfer to and vest in the creditor ... all the lands, tenements, and hereditaments mentioned therein, for all the estate and interest of which the debtor mentioned in such affidavit shall at the time of such registration be seised or possessed at law or in equity, or might at such time create by virtue of any disposing power which he might then, without the assent of any other person, exercise for his own benefit …"
subject to redemption on payment of the money owing on the judgment. In Wylie, Irish Land Law, 3rd Ed., (Dublin, 2000) the status and effect of such a mortgage is described as follows at para. 13.179
"Such a mortgage is subject to most of the principles governing mortgages in general. The usual method of enforcement is to bring an action for a declaration that the sum due is well charged, and for a sale if the amount is not paid within a specified period (3 months). Discharge does not require execution of a re-conveyance of the land and can be effected simply by entering up a memorandum of satisfaction."
Where the judgment debtor is the sole owner of registered land, the court has exercised the discretion conferred on it by s. 71 of the Act of 1964 to make orders declaring the sum due to be well charged on the lands in the folio and, in default of payment within a specified period, an order for the sale of the lands.
The defendant and Carmel Deasy being registered as co-owners of the lands comprised in Folio 8249 Co. Cork are deemed to be joint tenants pursuant to s. 91 (2) of the Act of 1964. There is no entry in the register to the effect that they are tenants in common. Accordingly it appears appropriate to consider the orders which a court might make where a judgment mortgage is registered against unregistered lands owned by persons as joint tenants. It is well established that the registration of a judgment mortgage seeking to charge one joint tenant's interest in lands operates to sever the joint tenancy and thereupon the co-owners hold as tenants in common and a mortgage of the estate or interest in the land held by the judgment debtor is created in favour of the judgment creditor. Thereafter the judgment creditor normally brings an action for a declaration that the sum due is well charged on the judgment debtors interest in the lands and for an order for sale in lieu of partition.
Such orders are sought pursuant to the provisions of s. 3 and s. 4 of the Partition Act, 1868 which provide:
"In a suit for partition, where, if this Act had not been passed, a decree for partition might have been made, then if it appears to the Court that, by reason of the nature of the property to which the suit relates, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of some of those parties, or of any other circumstance, a sale of the property and a distribution of the proceeds would be more beneficial for the parties interested than a division of the property between or among them, the Court may, if it thinks fit, on the request of any of the parties interested, and notwithstanding the dissent or disability of any others of them, direct a sale of the property accordingly, and may give all necessary or proper consequential directions."
"In a suit for partition, where, if this Act had not been passed, a decree for partition might have been made, then if the party or parties interested, individually or collectively, to the extent of one moiety or upwards in the property to which the suit relates request the Court to direct a sale of the property and a distribution of the proceeds instead of a division of the property between or among the parties interested, the Court shall, unless it sees good reason to the contrary, direct a sale of the property accordingly, and give all necessary or proper consequential directions."
In each section a precondition to the court having jurisdiction to make an order for sale is that a decree of partition might have been made if the Act of 1868 had not been passed. Doubt has been expressed by Murphy J. in O'D v O'D (Unreported, High Court, 18th November, 1983) as to whether the High Court retains a jurisdiction to grant a decree of partition since the passing of the Statute Law Revision (Pre-Union Irish Statutes) Act, 1962. The doubt arises for the following reasons.
An Act of 1542 entitled "An Act for Joint Tenants" [33 Hen VIII c. 10 (I.R.)] provided for the right of a joint tenant to compel partition. That Act appears to have expressly conferred jurisdiction to make such orders on the Common Law Courts. That Act was repealed by the Statute Law Revision (Pre-Union Irish Statues) Act, 1962. However, it appears that following the passing of the Act of 1542 the Courts of Equity also asserted that they possessed a similar jurisdiction to that conferred on the Common Law Courts by the Act of 1542. Lyall, Land Law in Ireland, 2nd Ed., (Dublin, 2000) explains the rationale for the repeal of the Act of 1542 at p. 446 in the following terms:
"The Act [of 1542] itself expressly conferred jurisdiction on the common law courts, but courts of equity soon asserted that they possessed a similar jurisdiction. It seems that the equitable jurisdiction to partition survived until the Judicature Act and, since after that date it can be exercised in any court, the Act of 1542 had become obsolete. The Act of 1542 was therefore repealed in the Republic by the Statute Law Revision (Pre-Union Irish Statutes) Act, 1962."
Notwithstanding the doubts expressed by Murphy J. in O'D v O'D (Unreported, High Court, 18th November, 1983) he did go on to consider whether he should exercise a discretion to grant an order for partition upon the assumption that the right to make such orders formed part of the inherent equitable jurisdiction of the court.
The issue was also considered by Barr J. in FF v CF [1987] I.L.R.M. 1.
Barr J. considered that by reason of s. 2 (1) of the Act of 1962 the courts retain jurisdiction to make orders for partition. That section provides as follows:
"This act shall not affect any existing principle or rule of law or equity, or any established jurisdiction, form or course of dealing, practice or procedure, notwithstanding that it may have been in any manner derived from, affirmed or recognised by any enactment hereby repealed".
I would respectfully agree with the view formed by Barr J. I have concluded that the courts retain a jurisdiction to make orders for partition notwithstanding the repeal of the Act of 1542 by the Act of 1962. It is undisputed that prior to the passing of the Act of 1962 the courts had an established jurisdiction to make orders for partition at the request of a joint owner of property. Further it appears that the Courts of Equity developed such a jurisdiction independently of the Act of 1542 which had conferred the jurisdiction on the Common Law courts. Following the passing of the Judicature Act all courts were entitled to exercise the equitable jurisdiction. Even if the jurisdiction exercised by the courts following the passing of the Judicature Act may be considered to have been derived wholly or partly from the Act of 1542, it appears that s. 2 (1) of the Act of 1962 preserves such jurisdiction.
A person may only claim an order for partition if entitled in possession or
entitled to call for legal possession: see White and Tudor, Leading Cases in Equity, 7th Ed., (London, 1897), vol. 1 p.199. A mortgagee has been held entitled to claim partition op. cit. p. 201. Also a mortgagee has been held entitled to an order for sale in lieu of partition under the Act of 1868, see Davenport v King (1883) 49 L.T. (N.S.) 92.There does not appear to be any reason to distinguish a judgment mortgagee of unregistered lands from any other mortgagee of unregistered lands who has been held so entitled.
Accordingly, on proof of the other matters referred to in ss. 3 and 4 of the Partition Act, 1868 a judgment debtor who has registered a judgment mortgage affidavit in the Registry of Deeds against unregistered land is entitled to seek an order for sale in lieu of partition and the courts retain a jurisdiction and discretion to make such orders for sale in lieu of partition
The jurisdiction of the courts to make an order for partition or an order for sale in lieu of partition at the request of a judgment debtor who has registered a judgment mortgage affidavit as a charge against registered land does not appear to have been considered by the Irish courts since the passing of the Act of 1964. In First National Building Society v Ring [1992] 1 IR 375 Denham J. (whilst in the High Court) considered an application for an order for sale in lieu of partition under s. 4 of the Partition Act, 1868 in relation to registered land. However, in that case it appears to have been simply assumed by the parties that the court had jurisdiction to make an order for sale in lieu of partition in relation to registered land at the behest of a judgment debtor who had registered the judgment mortgage affidavit as a charge against the debtor's interest in the registered land. The issue in that case was the nature of the discretion (if any) conferred on the court by s. 4 of the Act of 1868 and the circumstances in which it should be exercised in favour of the plaintiff. The claim in that case related to lands on which there was a family home then resided in by the wife who was a co-owner and by the children of the marriage.
I have concluded that the registration of a judgment affidavit under s. 71 of the Act of 1964 does not confer on the plaintiff any interest in the lands comprised in Folio 8249 Co. Cork such as would entitle him to a decree of partition in accordance with the established principles. He is not entitled in possession or to call for possession of the lands. The absence of any provision in s. 71 analogous to that contained in s. 62 (6) of the Act of 1964 in relation to the registered owners of charges created by the owner of the property in the folio means that one cannot assimilate the position of a judgment creditor in whose favour a charge is created by the registration of the judgment mortgage affidavit pursuant to s. 71 of the Act of 1964 (which is simply a burden on the property), to the position of a judgment creditor who has registered a judgment mortgage affidavit in the Registry of Deeds against unregistered land and is a mortgagee pursuant to the provisions of s. 7 of the Judgment Mortgage (Ireland) Act 1850. Support for this view is to be found in Lyall, Land Law in Ireland, 2nd Ed., (Dublin, 2000) at p. 868 where it is stated:
"In registered land a judgment mortgage does not effect a conveyance of the debtor-spouse's interest: it creates a charge on the interest. It would seem to follow that a judgement mortgagee of registered land cannot apply for an order for sale under the Partition Acts because he or she is not a co-owner."
It follows from my conclusion that the plaintiff is not a person in whose favour a decree of partition may be made that he is not entitled to an order for sale in lieu of partition under s. 3 or s. 4 of the Partition Act, 1868. However, as previously indicated in this judgment, s. 71 (4) of the Act of 1964 confers on the court a discretion as to the rights and remedies for the enforcement of the charge which may be conferred by order of the court. I have also previously indicated that it appears to me that such discretion should be construed as giving to the court a jurisdiction and discretion to grant orders similar to those which are and have been granted pursuant to the courts pre-existing equitable or common law jurisdiction for the enforcement of judgment mortgages registered against unregistered land. Hence, as I am satisfied that there continues to exist in the courts jurisdiction to make orders for sale in lieu of partition under ss.3 and 4 of the Act of 1868 at the request of judgment creditors who have registered judgment mortgage affidavits against unregistered land in the Registry of Deeds, it appears that the provisions of s. 71 (4) of the Act of 1964 should properly be construed as including an intention to confer on the courts an analogous jurisdiction in relation to registered land.
Considering the matter in a slightly different way, unless s. 71 (4) of the Act of 1964 is construed as giving the courts a jurisdiction to make either orders for partition or orders for sale in lieu of partition for the purposes of enforcing a charge on the interest of a judgment debtor who is a co-owner, the only other order which might possibly enforce the charge would be an order for the sale of the judgment debtors interest in the lands. In most instants this would be an unrealistic order for the purposes of enforcing a charge. It is highly improbable that the sale of an undivided interest (whether as joint tenant or a tenant in common) would be a marketable commodity. In certain situations it may be saleable to the co-owner. Where it is, it is probable that this would be done by agreement before enforcement orders are sought.
Counsel for the plaintiff has made submissions on the question as to whether the registration of the judgment mortgage affidavit under s. 71 operates to sever the joint tenancy of the defendant and Mrs. Deasy. It does not now seem necessary to resolve this question for the issues I have to decide. Hence it should be left for a case where it is in issue.
Hence, I have concluded that the rights and remedies which the court may order under s. 71 (4) for the enforcement of a charge registered pursuant to that section must include in an appropriate case an order for partition and/or an order for sale in lieu of partition. It further appears appropriate that the court should by analogy exercise its discretion in accordance with the principles established in relation to the granting of decrees of partition and to the making of orders for sale in lieu of partition in accordance with the provisions of s. 3 and s. 4 of the Act of 1868.
Counsel for the plaintiff submits that he is entitled to obtain an order for sale in lieu of partition notwithstanding that Carmel Deasy, the joint owner of the property, is not a party to the proceedings. He makes this submission primarily in reliance upon s. 9 of the Act of 1868. For the reasons already given, the application for the order for sale in lieu of partition is not strictly speaking an application under the Partition Act, 1868 but rather an application for such order under s. 71 (4) of the Act of 1964. The courts are bound to exercise the jurisdictions and discretions conferred on it in accordance with the constitutional principles of fair procedures.
I have concluded that even if s. 9 of the Act of 1868 did strictly apply in a situation where there are only two co-owners of the property and an application for an order for sale in lieu of partition is being made by a mortgagee of one such owner that unless the other owner is not available for some reason to be joined as a party to the proceedings that he/she should be joined as a party to the proceedings. The judgment mortgagee is effectively making the claim through the interest of the judgment debtor in the property and therefore at least one co-owner of the judgment debtor should be joined as defendant. If not, as between the co-owners only the judgment debtor's interest in the property is represented both through the plaintiff and the defendant. Also, it is well established on the authorities relating to s. 3 of the Act of 1868 that the court in considering whether it would be more beneficial for the parties interested in the property to make an order for sale must take into account the circumstances of all the parties interested and not simply the person who is the applicant for the order for sale in lieu of partition.
Even if I did not form this view on s. 9 it appears to me that in accordance with the constitutional principles of fair procedures that where a judgment creditor is seeking an order for sale of the entire property a person who is the only co-owner of the property with the judgment debtor should be joined as a party to the proceedings. Putting them on notice of the proceedings does not appear sufficient. Hence I am not prepared to permit the application for an order for sale in lieu of partition to proceed without Carmel Deasy being joined in the proceedings.
I would also observe at this stage in the proceedings that if, as I have indicated, this court is to exercise a discretion under s. 71 (4) of the Act of 1964 on principles analogous to those established by the authorities relating to s. 3 and s. 4 of the Act of 1868, the plaintiff has not set out on affidavit facts which would either permit the court to decide whether it is exercising discretion under s. 3 or s. 4 of the Act of 1868 or factual matters which would permit it to exercise its discretion in favour of making an order for sale in lieu of partition. Those factual matters would have to be addressed before the court could consider exercising its discretion.
I will hear counsel and solicitor as to the precise form of order which should now be made in respect of the reliefs to which the plaintiff is entitled and to permit the plaintiff, if he wishes, to bring an application to amend the summons and join Carmel Deasy as a party to the proceedings and to put before the court such additional facts as are considered appropriate to permit the court to consider an application on principles analogous to those established by s. 3 and s. 4 of the Partition Act, 1868.
Approved: Finlay Geoghegan J.
