Factual and Procedural Background
This judgment concerns an application by the Applicant for orders under section 123(b)(ii) of the Land and Conveyancing Law Reform Act 2009 (the "2009 Act") or alternatively under the court's inherent jurisdiction, seeking to vacate various lis pendens registered by the Respondent on certain folios of the Register of Freeholders in County Westmeath (the "Folios"). The lis pendens were registered in relation to proceedings commenced by the Respondent as Plaintiff against eight Defendants, including the Applicant. The proceedings were issued on 18th May 2017 but were not served on the Applicant until 23rd November 2017, and the statement of claim was delivered only on 14th February 2018, shortly before the hearing of the application to vacate the lis pendens.
The dispute relates to interests in a property known as the Athlone Town Centre, comprising a commercial area, residential units, and a hotel trading under the Sheraton name. The Applicant acquired ownership of the Centre in 2015, subject to a long lease held by the Respondent in respect of the Hotel. The Respondent claims an agreement was reached in September 2015 for the transfer of the freehold interest in the Hotel to it and for the execution of a deed of mutual easements and covenants ("DOMEC") between the parties. The Applicant disputes the existence of any concluded binding agreement and contends that the Respondent was not entitled to register the lis pendens.
There were extensive negotiations and correspondence between the parties and their solicitors from 2015 to 2017, with significant factual disputes concerning the existence and terms of any agreement. The Respondent issued proceedings and registered the lis pendens, but delayed serving the proceedings and delivering the statement of claim despite multiple requests by the Applicant.
Legal Issues Presented
- Whether the Respondent was entitled to register the lis pendens under section 121(2) of the 2009 Act by virtue of asserting a claim to an estate or interest in the lands affected;
- Whether there has been an unreasonable delay in prosecuting the action by the Respondent, justifying the vacation of the lis pendens under section 123(b)(ii) of the 2009 Act;
- Whether the action is being prosecuted bona fide by the Respondent, or whether the lis pendens should be vacated on grounds of abuse of process or because the proceedings are bound to fail.
Arguments of the Parties
Applicant's Arguments
- The Respondent was not entitled to register the lis pendens as it could establish no estate or interest in the lands affected, and no binding agreement existed for the transfer of the freehold interest in the Hotel or the execution of the DOMEC.
- There has been an unreasonable delay in prosecuting the proceedings, evidenced by the failure to serve the proceedings for over six months after commencement and the late delivery of the statement of claim.
- The action is not being prosecuted bona fide, as the proceedings and lis pendens were used improperly to obtain a commercial advantage and to hinder the Applicant's ability to sell residential units.
Respondent's Arguments
- The proceedings do assert a claim to an estate or interest in land, specifically the transfer of the freehold interest in the Hotel and the execution of the DOMEC, entitling registration of the lis pendens under section 121(2) of the 2009 Act.
- The Respondent denies any unreasonable delay, explaining the delay in service was to allow for amicable resolution of outstanding issues, and served the proceedings once it appeared resolution was unlikely.
- The action is being prosecuted bona fide, denying abuse of process or that the proceedings are bound to fail, and contending that the court should not vacate the lis pendens absent clear and undisputed facts.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Gannon v. Young [2009] IHEC 511 |
Test for vacating lis pendens requires showing proceedings are not prosecuted bona fide; no issue of fact should remain for vacation. |
Confirmed the bona fide prosecution test and that lis pendens should not be vacated if genuine factual disputes exist. |
| Dan Morrissey (Irl.) Ltd. v. Donal Morrissey & ors [2008] 3 IR 752 |
Jurisdiction to vacate lis pendens exists where proceedings are not bona fide prosecuted; delay alone insufficient without bad faith. |
Clarified that bona fide prosecution is required and delay in registration or lack of notice does not negate right to register lis pendens. |
| Flynn v. Buckley [1980] I.R. 423 |
Confirmed jurisdiction to vacate lis pendens where proceedings are not bona fide prosecuted. |
Supported bona fide prosecution requirement for maintaining lis pendens. |
| Togher Management Company Ltd. v. Coolnaleen Developments Ltd. [2014] IHEC 596 |
Considered the new ground under 2009 Act of unreasonable delay in prosecuting proceedings as basis to vacate lis pendens. |
Observed that unreasonable delay in prosecution may justify vacating lis pendens under s.123(b)(ii). |
| Tola Management LLC v. Joseph Linders & Anor. (No. 2) [2014] IEHC 324 |
Clarified meaning of "action not being prosecuted bona fide" includes entire action or specific steps. |
Vacated lis pendens where specific steps (registration and maintenance) were not bona fide prosecuted. |
| Kenmare Property Finance Ltd v. McGuinness [2015] IEHC 576 |
Confirmed test for bona fide prosecution and that proceedings doomed to failure are not bona fide. |
Denied vacation of lis pendens where factual disputes existed and claim was not doomed to fail. |
| Kelly & O'Kelly v. Irish Bank Resolution Corporation Ltd [2012] IEHC 401 |
Lis pendens may be vacated where proceedings are an abuse of process or lack bona fide basis. |
Vacated lis pendens where claim was a sham to frustrate sale and lacked bona fide basis. |
| Bennett v. Earlsfort Centre (Developments) Unlimited Company [2018] IEHC 61 |
Lis pendens registration must relate to genuine claim to estate or interest in land; abuse of process ground. |
Held claim was not bona fide as it was used to exert pressure, thus lis pendens not justified. |
| Primor plc. v Stokes Kennedy Crowley [1996] 2 I.R. 459 |
Sets out principles for dismissal of proceedings for delay and want of prosecution. |
Distinguished from lis pendens delay jurisdiction, which does not require full dismissal test. |
| Sean Quinn Group Ltd v. An Bord Pleanála & Ors [2001] 1 I.R. 505 |
Abuse of process principles relevant to bona fide prosecution assessment. |
Referenced for abuse of process considerations in lis pendens context. |
| Dunnes Stores v. An Bord Pleanála & Ors [2015] IEHC 716 |
Abuse of process principles relevant to bona fide prosecution assessment. |
Referenced for abuse of process considerations in lis pendens context. |
| RTS Flexible Systems Ltd v. Molkerei Alois Muller GmbH & Co KG [2010] 1 WLR 753 |
Principles on when agreements "in principle" amount to binding contracts. |
Relied upon in submissions regarding existence of binding agreement for transfer and DOMEC. |
| Pagnan SpA v. Feed Products Ltd [1987] 2 Lloyd's Rep 601 |
Summary of principles on contract formation and certainty. |
Approved by RTS and cited in submissions on agreement issues. |
| Cobbe v Yeoman's Row Management Ltd [2008] 1 WLR 1752 |
Agreements "in principle" usually incomplete and not binding contracts. |
Discussed in relation to disputed agreement between parties. |
| Tolan v Connacht Gold Co-operative Society Ltd. [2016] IECA 131 |
Agreements may be binding even if all terms not agreed in detail. |
Referenced regarding contractual certainty issues. |
| Globe Entertainment Ltd. v Pub Pool Ltd [2016] IECA 272 |
Similar to Tolan on contract formation and certainty. |
Referenced regarding contractual certainty issues. |
| Triatic Limited v Cork County Council [2007] 3 IR 57 |
Distinguishes enforceability of agreement to agree. |
Referenced in submissions on agreement completeness. |
Court's Reasoning and Analysis
The court began by acknowledging significant factual disputes between the parties, accepting the Respondent's case at its height for the purpose of the application. The court identified three grounds raised by the Applicant for vacating the lis pendens: lack of entitlement to register due to absence of estate or interest, unreasonable delay in prosecuting the action, and non bona fide prosecution of the action.
The court focused primarily on the ground of unreasonable delay in prosecuting the action under section 123(b)(ii) of the 2009 Act. It found that the Respondent had not prosecuted the proceedings with the required expedition and vigour after commencement on 18th May 2017. Despite multiple requests from the Applicant for service of the proceedings, the Respondent delayed service for over six months and delayed delivery of the statement of claim until shortly before the hearing. The Respondent's explanation that delay was to allow amicable resolution was rejected as insufficient to justify the protracted delay, especially after the Applicant had repeatedly requested service.
The court held that the statutory obligation to prosecute proceedings expeditiously upon registration of a lis pendens is clear and that delay without good reason is "unreasonable" for the purposes of section 123(b)(ii). The court also noted that prejudice need not be established as a jurisdictional prerequisite but found that the Applicant had demonstrated prejudice from the delay in its ability to deal with the property.
On the issue of entitlement to register the lis pendens, the court concluded that the Respondent had just about established an entitlement based on the claims in the pleadings, including claims to easements and a freehold transfer, although the existence of a binding agreement was disputed.
Regarding bona fide prosecution, the court found no sufficient evidence of abuse of process or that the proceedings were bound to fail. The factual disputes and complex legal issues made it inappropriate to vacate the lis pendens on this ground at this stage.
The court encouraged the parties to consider mediation to resolve outstanding disputes but proceeded to determine the application in the absence of agreement.
Holding and Implications
The court held that there had been an unreasonable delay in prosecuting the action by the Respondent, justifying vacating the lis pendens under section 123(b)(ii) of the 2009 Act. Accordingly, the lis pendens registered by the Respondent were ordered to be vacated.
The direct effect of this decision is to remove the lis pendens burdens from the relevant folios, allowing the Applicant greater freedom to deal with the property. The court did not establish new precedent on the other grounds raised, as it found those insufficient to warrant vacating the lis pendens. The decision reinforces the statutory obligation on parties registering lis pendens to prosecute proceedings expeditiously and the court’s willingness to vacate lis pendens where unreasonable delay occurs.