Factual and Procedural Background
The plaintiff, Company A, seeks a declaration that the sum of €415,997.15 stands well charged on the defendant's interests in certain lands registered in The State by virtue of a judgment mortgage registered on or about 20 January 2016. Company A also seeks an order for sale of the lands in default of payment of that sum and ancillary relief pursuant to section 117 of the Land and Conveyancing Law Reform Act 2009 (the "2009 Act").
The defendant raises several defenses, principally arguing that Company A was required to seek leave to issue execution of the judgment prior to seeking the well charging order.
The factual background is drawn from affidavits of senior managers of Company A, which detail the registration of the judgment mortgage originally obtained by Company B against the defendant. Company B had obtained final judgment against the defendant in June 2015 and subsequently registered a judgment mortgage against the defendant’s lands. Through a series of agreements, including a Debt Portfolio Sale and Purchase Deed ("the DSD") and a Deed of Assignment, the secured assets, including the judgment mortgage, were transferred ultimately to Company A.
There was confusion and omission of the Deed of Assignment in the court papers, which was later rectified by affidavit evidence confirming its existence and explaining its absence as a clerical error. The defendant objected to reliance on the Deed of Assignment on procedural and substantive grounds.
Company A provided evidence of valuations of the lands, notification letters demanding repayment, and registration details confirming its ownership of the judgment mortgage. The defendant did not dispute the valuation or the outstanding debt but denied admission of the debt.
Legal Issues Presented
- Whether an application to have a judgment mortgage declared well charged requires prior leave to issue execution under Order 42, rule 24 of the Rules of the Superior Courts where ownership of the judgment mortgage has changed.
- Whether Company A has established ownership of the judgment mortgage.
- Whether Company A must establish ownership of the underlying loan facility and entitlement to execute the original judgment to obtain well charging relief.
- Whether the defendant was given prior notification of the assignment of the loan as required by section 28(6) of the Supreme Court of Judicature (Ireland) Act 1877.
- Whether the absence of a banking licence held by Company A affects its entitlement to relief.
- Whether the execution of contractual documents by attorneys complied with relevant statutory provisions.
Arguments of the Parties
Defendant's Arguments
- An application to declare a judgment mortgage well charged is a form of execution requiring leave to issue execution due to the change in ownership of the judgment mortgage.
- Company A has not established that it is the owner of the judgment mortgage.
- Company A must prove entitlement to execute the original judgment and ownership of the underlying loan facility.
- The defendant was not given prior notification of the assignment to Company A, contrary to statutory requirements.
- The contractual documents are insufficient due to redactions and failure to prove valid transfer of the debt.
- There has been no sufficient explanation for the lapse of time since the original judgment to justify enforcement.
- No evidence exists that any party succeeding to Company B's interest holds a banking licence.
- The contractual documents were executed by attorneys without compliance with statutory formalities.
Plaintiff's Arguments
- Company A contends that Order 42, rule 24 does not apply to applications to declare a judgment mortgage well charged, as such applications are not executions of the judgment.
- The registration of the judgment mortgage on the Property Registration Authority's (PRA) register is conclusive evidence of ownership.
- Ownership of the judgment mortgage alone is sufficient to obtain well charging relief; proof of ownership of the underlying loan or entitlement to execute the original judgment is not necessary.
- Notification letters ("goodbye" and "hello" letters) were sent to the defendant, satisfying notification requirements under section 28(6) of the 1877 Act.
- The absence of a banking licence held by Company A is irrelevant to the relief sought.
- The registration of the judgment mortgage by the PRA confirms valid execution of the transfer, and any issues with execution by attorneys are matters for the PRA or rectification proceedings, not this court.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Doyle v Houston [2020] IECA 86 |
Conclusive effect of the land register under section 31 of the Registration of Title Act 1964 regarding judgment mortgages. |
The court held that the register is conclusive evidence of title and the court cannot look behind it absent fraud or mistake. |
| Smyth v Tunney [2004] 1 IR 512 |
Requirement to justify lapse of time before seeking execution of a judgment. |
The court found this principle inapplicable as the plaintiff was not seeking execution but relief under the 2009 Act. |
| Barnett v Bradley (1890) 26 LR Ir 209 |
Registration of a judgment mortgage is not a form of execution. |
Supported statutory recognition that registration does not breach stays on execution. |
| Ulster Bank v Rattigan [2023] IEHC 284 |
The judgment debt crystallizes upon judgment and cannot be denied absent evidence. |
The court accepted that the debt was due and owing as per the judgment. |
| Start Mortgages v Ramseyer [2024] IEHC 329 |
Clarity of the register is essential; ambiguous entries may require rectification. |
The court distinguished this case, finding no ambiguity in the register entries before it. |
| Tanager DAC v Kane [2018] IECA 352 |
Register is conclusive of title to land; ownership of charges may require subsidiary folio registration. |
The court confirmed that ownership of a judgment mortgage registered on a subsidiary folio is conclusive evidence of ownership. |
| Ulster Bank v Quirke [2022] IECA 283 |
Ownership of an unpaid loan continues despite merger in judgment; assignee of loan benefits from judgment. |
Supported the proposition that ownership of the loan supports entitlement to enforce the judgment. |
| O'Rourke v Considine [2011] IEHC 191 |
Requirements for legal assignment under section 28(6) of the 1877 Act, including notification to debtor. |
Outlined conditions for effective assignment and notification. |
| AIB v Thompson [2017] IEHC 515 |
Notification under section 28(6) need not be prior to assignment to be effective. |
Confirmed that notice given after assignment is sufficient for legal effect against debtor. |
| Flynn v Crean [2019] IEHC 51 |
Burden on defendant to show good reason to refuse order for sale following well charging order. |
The court applied the principle that mere delay or insolvency is insufficient to resist sale. |
| Quinn's of Baltinglass Ltd v Smith [2017] IEHC 461 |
Burden of proof on defendant in resisting sale of charged property. |
Reinforced that defendants must show good reason not to order sale. |
Court's Reasoning and Analysis
The court first addressed the defendant's argument that Company A was required to seek leave to issue execution under Order 42, rule 24 due to the change in ownership of the judgment mortgage. The court analyzed the Rules of the Superior Courts, distinguishing between execution orders (such as orders of fieri facias) and applications to have a judgment mortgage declared well charged. It concluded that a well charging order is a declaration of the validity and effect of the judgment mortgage, not an execution of the judgment itself, and therefore rule 24 does not apply.
The court emphasized statutory provisions in the 2009 Act, particularly sections 116 and 117, which provide the mechanism for registration and enforcement of judgment mortgages, confirming that registration is not execution and that enforcement follows a distinct process.
Regarding ownership, the court found that the register, including subsidiary folios, is conclusive evidence of ownership of the judgment mortgage. The defendant's reliance on a case involving ambiguous register entries was rejected because no such ambiguity existed here. The court accepted that Company A is the registered owner of the judgment mortgage.
The court rejected the defendant's contention that Company A must prove ownership of the underlying loan or entitlement to execute the original judgment, holding that ownership of the judgment mortgage alone suffices to obtain well charging relief under section 117 of the 2009 Act.
On the issue of notification under section 28(6) of the 1877 Act, the court found no bona fide factual dispute relevant to the application. It concluded that the statutory requirement is for notification, not prior notification, and that the defendant’s averments concerning lack of prior notice do not affect the validity of the assignment or the relief sought.
The court found no relevance in the defendant's assertion regarding the absence of a banking licence held by Company A for the relief sought.
Regarding the execution of contractual documents by attorneys, the court noted that the registration by the PRA is conclusive evidence of Company A’s ownership and that any issues with execution or powers of attorney are matters for the PRA or rectification proceedings, not this court.
Finally, on the order for sale, the court applied established principles placing the burden on the defendant to show good reason to refuse sale. The defendant failed to identify any impediment, and the value of the lands exceeded the judgment sum. The court proposed orders for taking necessary accounts and enquiries and, in default of payment, ordering sale under section 117(2) of the 2009 Act.
Holding and Implications
DISPOSED OF
The court granted the primary relief sought by Company A: a declaration that the defendant's interest in the lands is well charged for the judgment debt of €415,997.15. It also proposed consequential orders for taking accounts and, if payment is not made within a specified period, ordering the sale of the charged properties.
No new precedent was established beyond the application and reaffirmation of existing statutory provisions and case law. The decision confirms that applications to have judgment mortgages declared well charged are distinct from execution proceedings and that registration on the land register conclusively establishes ownership of the judgment mortgage for enforcement purposes.