Tarbutus LTD v Hogan (Approved)

Factual and Procedural Background

The Plaintiff, an English-registered company ("Company A"), brought plenary proceedings seeking various injunctions against trespass by the Defendant ("Appellant") concerning a duplex apartment ("the Apartment") located in County Limerick. Company A is registered as the full owner of the Apartment following a transfer dated 30 July 2019 from Company B ("Tanager"), which exercised its power of sale pursuant to a registered charge on the Apartment. The Defendant, a former mortgagor and registered owner, resists the claim asserting ownership and possession of the Apartment.

The dispute primarily concerns the rightful ownership and entitlement to possession of the Apartment. The trial occurred on 15 and 20 October 2021, with Company A represented by counsel and the Defendant appearing in person with a McKenzie friend. The certified folio records showed a history of ownership and charges, including the Defendant's registration as full owner from 2001, a registered charge in favor of Bank of Scotland (Ireland) Limited ("BoSI") from 2007, subsequent registration of the charge in favor of Company B from 2014, and the cancellation of the Defendant's ownership and charge registration on 9 September 2019, with Company A registered as full owner.

The Defendant sought adjournment on grounds including unanswered interrogatories and motions to consolidate related proceedings, but the court refused. The court permitted Company A to amend pleadings to include a schedule identifying the property by folio number. The proceedings involve complex issues relating to the registration and transfer of charges and ownership under the Registration of Title Act 1964.

Legal Issues Presented

1. Whether the conclusivity of the Register of Title under Section 31(1) of the Registration of Title Act 1964 precludes the Defendant from challenging Company A's registered ownership absent actual fraud or mistake.
2. Whether the transfer of the registered charge from BoSI to Company B was valid, and consequently whether Company B had title to sell the Apartment to Company A.
3. Whether the Defendant's allegations of fraud, irregularities in the transfer documents, and the dormancy status of Company A affect the validity of the registered title.
4. The procedural question of whether the Defendant may seek rectification of the Register for fraud or mistake by way of defence and counterclaim in plenary proceedings.
5. Whether possession by the Defendant, including events of 14 July 2020, affects Company A's entitlement to possession as registered owner.

Arguments of the Parties

Appellant's Arguments

• These proceedings constitute an abuse of process as the Defendant had previously initiated plenary proceedings seeking rectification of the Register.
• Relying on precedent, the Defendant argued that Bank of Scotland plc ("BoS") had no power to transfer the registered charge to Company B, rendering the sale to Company A fraudulent and ineffective.
• The sale from Company B to Company A was vitiated by the absence of the contract for sale and errors in the transfer document, including misspelling of Company A's name and references to "the Bank" as vendor.
• Company A was a "dormant" company without legal personality at the time of purchase, invalidating the transaction under the Statute of Frauds 1695.
• Alleged deception and failure to progress prior possession proceedings by Company B and its receiver.
• The sale price of €24,000 was below market value and off-market, constituting fraud and unjust enrichment.
• The receiver appointed by Company B breached his duty of care to the Defendant.
• Refusal by Company A to identify the beneficial owners undermines its claim.
• The Defendant remained in lawful possession, so Company B did not sell as mortgagee in possession.
• Events of 14 July 2020, where Company A's agents unsuccessfully attempted possession, impact the proceedings.
• The Defendant only became aware of the sale to Company A on 14 July 2020.
• The original deed of charge was not returned to the Defendant, affecting the case.
• The Defendant denied having mortgaged the Apartment.

Company A's Arguments

• Company A relies on the certified folio as conclusive evidence of its full ownership under Section 31(1) of the Registration of Title Act 1964.
• The transfer from Company B to Company A was valid and effective, with errors in the transfer document being minor typographical mistakes corrected in execution.
• The Defendant did not provide evidence that Company A's dormancy rendered the transfer fraudulent or invalid.
• The Defendant's arguments concerning the transfer of the charge from BoSI to Company B were addressed by precedent confirming the validity of that transfer.
• The sale price reflected an arms-length transaction of distressed property, considering risks and litigation, and was lawful under the Conveyancing Act 1881.
• The beneficial ownership is irrelevant as Company A holds legal title and is entitled to succeed or fail on that basis.
• The Defendant's possession is unlawful following registration of title in Company A's name, and possession disputes do not affect the conclusivity of the Register.
• The absence of the original deed of charge does not affect the conclusive record of cancellation on the folio.
• The Defendant failed to establish any defence sufficient to overcome the presumption of Company A's title and entitlement to relief.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging that Company A was registered as full owner of the Apartment, with the folio conclusively cancelling the Defendant's ownership and the registered charge. The court emphasized the statutory principle under Section 31(1) of the Registration of Title Act 1964 that the Register is conclusive evidence of title, subject only to actual fraud or mistake.

The Defendant's arguments challenging the validity of the transfer of the charge from BoSI to Company B, and from Company B to Company A, were considered in light of the precedent from Tanager v Kane and Kavanagh v McLoughlin. The court found that statutory provisions and prior case law validated the transfer of the charge and the subsequent sale, negating the Defendant's claims of fraud or invalidity.

Errors in the transfer document, including misspelling of Company A's name and references to "the Bank," were found to be minor typographical issues corrected in execution, irrelevant behind the conclusivity of the Register. The Defendant's claim that Company A was dormant and lacked legal personality at the time of purchase was rejected due to lack of evidence and the legal understanding of dormancy.

The court noted that possession by the Defendant did not affect Company A's entitlement to possession, given the conclusive cancellation of the Defendant's title on the Register. The events of 14 July 2020, where Company A's agents attempted possession but were resisted, were acknowledged but did not undermine Company A's legal title.

The court also addressed procedural issues, allowing the Defendant to raise rectification of the Register for fraud or mistake by way of defence and counterclaim in the plenary action, distinguishing this from summary possession proceedings where the Register's conclusivity is more strictly applied.

Overall, the court found no evidence of fraud, deception, or mistake sufficient to justify looking behind the Register or upsetting Company A's registered title. The Defendant failed to establish a good defence to the claim.

Holding and Implications

Judgment was given in favour of the Plaintiff (Company A), granting the injunctive reliefs sought against the Defendant.

The court held that the Register of Title is conclusive evidence of ownership absent actual fraud or mistake, and the Defendant failed to demonstrate any such fraud or mistake. The Defendant's possession of the Apartment was found to be unlawful following registration of Company A's title. The Defendant's arguments challenging the validity of the charge transfer and sale were rejected based on established legal principles and precedent.

The decision affirms the strength and conclusivity of registered title under Irish law, emphasizing the limited circumstances under which the Register may be challenged. No new precedent was established; the ruling applies existing principles to the facts. The court directed the parties to agree on the form of order and costs, allowing for written submissions if agreement is not reached.