About this case:

• Citation:
  [2024] IEHC 562
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Rory Mulcahy

Delivering judgment for the High Court, Mr Justice Rory Mulcahy opined that “the focus of an application to have a judgment mortgage declared well charged must be on whether the party applying is the judgment mortgagee, i.e. the owner of the judgment mortgage. When seeking well charging relief based on a judgment mortgage, once ownership of the judgment mortgage has been established, the statutory entitlement to seek relief under section 117(2) s triggered.”

Background

In 2015, Danske Bank A/S was granted liberty to enter final judgment against the defendant in the sum of €415,997.15. Danske then obtained an execution order and in 2016, registered a judgment mortgage against the defendant’s interest in lands comprised in two folios of which the defendant was the registered owner.

In the course of a debt portfolio sale, Danske and the plaintiff entered into inter alia a deed of assignment for the transfer of the judgment mortgages to the plaintiff. The plaintiff later wrote to the defendant seeking the discharge of the judgment debt, which was not paid.

The plaintiff sought inter alia a declaration from the High Court that the judgment debt stood well charged on the defendant’s interests in the folios. 

The defendant raised eight arguments, including a novel argument that the plaintiff required leave to issue execution prior to having its ownership of the judgment mortgage registered by the Property Registration Authority (PRA) or prior to seeking well charging relief, and that it had not established that it was the owner of the judgment mortgage.

The plaintiff relied upon, inter alia, Doyle v Houston [2020] IECA 86, in which the Court of Appeal confirmed that the court could not look behind the judgment mortgages registered on the folios in those proceedings in light of s.31 of the Registration of Title Act 1964 which confirms that the register is conclusive evidence of the title of the owner of the land as appearing on the register.

The plaintiff also relied upon ss.116 and 117 of the Land and Conveyancing Law Reform Act 2009 relating to the registration of judgment mortgages and relief on foot thereof, and upon the deeds for the sale and transfer of the judgment mortgage.

The High Court

Mr Justice Mulcahy considered Order 42, rules 3 and 8 of the Rules of the Superior Courts 1986 (RSC) relating to the enforcement of judgments for the payment of money and execution.

The judge noted: “If Pepper had been seeking an order of fieri facias, or other execution order, it is clear that it would have needed to make an application pursuant to Order 42, rule 24 seeking leave to issue execution… However, the plaintiff is not seeking to issue execution and Pepper argued that Order 42, in particular rule 24, simply has no application in this case. I agree. An application to have a judgment mortgage declared well charged on a defendant’s interest in a property is not an application for leave to execute a judgment within the meaning of Order 42.”

The judge continued: “It has long been recognised that registration of a judgment mortgage is not a form of execution (see Barnett v Bradley (1890) 26 LR Ir 209, in which the court ruled that the registration of a judgment mortgage did not breach a stay on execution). That position has now been given statutory recognition in section 116(3)(b) of the 2009 Act.”

Mr Justice Mulcahy determined, therefore, that the plaintiff was not required to seek leave to issue execution.

The defendant relied upon Start Mortgages v Ramseyer [2024] IEHC 329, arguing that the plaintiff had not established that it was the owner of the judgment mortgage. Mr Justice Mulcahy stated that Ramseyer was specific to its facts in that ownership was not clear from the terms of the register in that case due to the phrasing of the entries, finding that no such ambiguity arose in the case before him.

Addressing the defendant’s argument that ownership of the judgment mortgage was not of itself sufficient for relief and the plaintiff must be entitled to execute the original judgment, the High Court referred to the Land Registration Rules 2012 finding that in order to register a judgment mortgage, a plaintiff must provide evidence of a judgment, and so there was no need to establish in well-charging proceedings that the judgment mortgagee owned the original loan or the judgment which was since registered as a judgment mortgage.

The court clarified that the focus of a well charging application is whether the applicant is the judgment mortgagee, and if this is established, the statutory entitlement to relief under s.117(2) of the 2009 Act is engaged. 

In response to the defendant’s argument that he had not been notified of the assignment in line with s.28(6) of the Supreme Court of Judicature Act 1877, Mr Justice Mulcahy considered inter alia that it was not clear what consequence could flow from any such failure as the plaintiff was not seeking any remedy by reference to the loan facility assigned to it, instead it was relying upon the judgment mortgage. Accordingly, the court found no basis to withhold relief on that ground.

The court also addressed inter alia the defendant’s contention that the sale and transfer documentation was executed in a manner contrary to s.64 of the 2009 Act and/or s.21 of the Powers of Attorney Act 1996, finding that the judgment mortgage had been registered by the PRA and the register was conclusive evidence of the plaintiff’s ownership thereof. 

Consequently, Mr Justice Mulcahy determined that this was an argument for the PRA and absent an application to rectify the registration, it was not for the court to look behind the register.

Conclusion

Accordingly, the High Court proposed making an order pursuant to s.117(2)(a) of the 2009 Act requiring the taking of all necessary accounts and enquiries, and in default of payment of the judgment debt, an order pursuant to s.117(2)(b) requiring the sale of the properties.

The matter was listed for October for the purposes of making final orders.

Pepper Finance Corporation (Ireland) DAC v Robert Foley [2024] IEHC 562