Danske Bank A/S v Hegarty

Factual and Procedural Background

Company A (the “Plaintiff”) and the Defendant maintained a banking relationship that gave rise to unpaid liabilities. In 2002 the Plaintiff commenced summary-summons proceedings seeking recovery of the debt. Those proceedings were settled on 6 March 2006 before Judge McKechnie on terms that:

• Judgment would be entered for €60,000 plus statutory interest.
• Execution was stayed for 12 months, though the Plaintiff could “forthwith” register a judgment mortgage over the Defendant’s interest in the property at [Address].

The settlement was made a rule of court. No application was ever brought to set it aside.

On 30 August 2007—after the 12-month stay expired—the Plaintiff registered a judgment mortgage against two other properties owned by the Defendant (the “lands”). By special summons the Plaintiff sought a well-charging order over those lands. Judge Dunne (High Court) granted the relief on 13 July 2009. The Defendant appealed to the Supreme Court, contending that the settlement limited execution strictly to the [Address] property.

Legal Issues Presented

1. Whether the settlement agreement, properly construed, restricted the Plaintiff to registering a judgment mortgage only over the property at [Address], or permitted registration against any property after the 12-month stay expired.
2. Whether the High Court correctly granted a well-charging order founded on the judgment mortgage registered over the lands.

Arguments of the Parties

Plaintiff’s Arguments

• The settlement imposed only a 12-month moratorium on enforcement; once that period lapsed, all lawful modes of execution—including judgment-mortgage registration over any property—were available.
• The express permission to register “forthwith” against [Address] did not create a prohibition against registration elsewhere.
• Any claim of over-charging had been raised and compromised in the 2006 settlement; the Defendant had accepted a payment in full and final settlement of that matter.
• The Plaintiff’s searches did not reveal the Defendant’s ownership of the [Address] property, justifying registration elsewhere.

Defendant’s Arguments

• The settlement was a “comprehensive, indivisible agreement” understood to confine any judgment-mortgage registration to the [Address] property.
• Registration over the lands therefore breached both the settlement and the High Court order embodying it.
• The Plaintiff’s historical over-charging placed the Defendant under financial pressure amounting to unfairness in procuring the settlement.
• The Plaintiff delayed registration until any over-charging claim was statute-barred, causing further prejudice.
• The Defendant suffered losses from being forced to sell property at an undervalue.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Clarke, delivering the judgment for the Court, emphasised that a settlement is a contract subject to ordinary rules of contractual interpretation. Applying an objective approach, the Court observed:

• The settlement expressly stayed “execution” for 12 months but did not prohibit execution thereafter.
• The clause permitting a judgment mortgage “forthwith” over [Address] conferred an additional, immediate right; it did not operate as an exclusivity clause.
• To achieve the Defendant’s construction the agreement would have needed clear words such as “execution shall be confined to [Address].” No such language appeared.
• Because the 12-month stay had elapsed before the Plaintiff registered the judgment mortgage over the lands, the registration was fully consistent with the settlement.
• Issues of historical over-charging, the Defendant’s financial pressure, and the Plaintiff’s reasons for not registering over [Address] were legally irrelevant to the core question of contractual interpretation.

Holding and Implications

APPEAL DISMISSED. The Supreme Court affirmed the High Court’s well-charging order. The settlement did not restrict the Plaintiff’s enforcement options once the 12-month stay expired, and the judgment mortgage over the lands was valid.

Implications: The decision reinforces the objective-construction approach to settlement agreements and confirms that, absent explicit language, enforcement rights arising from a consent judgment will not be impliedly limited. The ruling affects only the parties and sets no new precedent beyond applying established contractual-interpretation principles.