Court of Appeal: Bank loses appeal against farmer’s adverse possession case

About this case:

• Judgment:
  External link
• Judge:
  Mr Justice Michael Peart

ACC Loan Management Ltd and bankruptcy receivers Declan Taite and John Coulston lost the appeal by Patrick Hamilton.

The folio of lands included “disputed land” used as security for a €250,000 loan granted by ACC Loan Management to the farmer’s brother in 2006, however it was concluded that the farmer had exclusive possession of the lands since his father had died intestate in 1992, therefore the transfer of the land in dispute from its true owner in 2006 was barred by virtue of the farmer’s adverse possession.

Background

In 1992, Mr Hamilton Senior died intestate, leaving his wife and five adult children (including the plaintiff, Mr Hamilton, who was the only child with an interest in farming). A grant of letters of administration (intestate) of the estate was taken out by Mrs Hamilton in 1993, and the 100 acres of farmland fell to be distributed pursuant to part VI of the Succession Act 1965.

Notably, Mr Hamilton’s father had died in debt, which was personally repaid by Mr Hamilton pursuant to an arrangement with Bank of Ireland at the time.

Mr Justice Michael Peart said “the first curiosity in this case” was that Mrs Hamilton did not execute a deed of assent for the purpose of transferring the beneficial ownership of the deceased’s property to those entitled until 2006. He said that the next curiosity was that she vested the entirety of the estate in herself, rather than to herself and her children. Justice Peart said that this may have been because, pursuant to s.45 of the Statute of Limitations Act 1957, any claim by her children to their share of their fathers estate on intestacy was barred after June 1998.

Thereafter, Mrs Hamilton transferred certain lands – including the “disputed lands” – to her son Sean. Sean had been granted a loan of €248,000 to assist with buying 6 acres of land, which had originally been part of the farmlands owned by the Hamiltons. The security required was, inter alia, a mortgage over 31 acres of land – 25 of which were the lands transferred to Sean by Mrs Hamilton.

Mr Hamilton said that he only became aware of this transaction in 2013, when a For Sale sign was erected on the “disputed lands”, being sold by bankruptcy receivers appointed over his brother Sean’s estate. Justice Peart said that another curiosity in this case was that the transfers to Sean and the required mortgage and charge were not registered with the Land Registry until 2012 (after Sean had been declared bankrupt).

Justice Peart explained that if Mr Hamilton’s possession had persisted from 1992, then occupation constituted adverse possession, and any action against him would be barred after 2004 – two years before the deed of assent by Mrs Hamilton to herself.

High Court

In the High Court in April 2016, Mr Hamilton was granted a declaration that he is entitled to be registered as full beneficial owner of lands in Monaghan by virtue of his adverse possession since his father died in June 1992.

The trial judge referred to Convey v Regan IR 56; Powell v McFarlane 38 P&CR 452; and Dunne v Iarnrod Eireann IEHC 314 – and asked:

Stating that he had been impressed by Mr Hamilton’s candour, the trial judge granted the declaration concluding that Mr Hamilton had exclusive possession and control for over 12 years, which was not broken by any act of Mrs Hamilton – whose passiveness had allowed Mr Hamilton to acquire an adverse possession title.

Court of Appeal

ACC Loan Management Ltd and bankruptcy receivers, Declan Taite and John Coulston, appealed the High Court’s findings, submitting that evidence clearly showed that Mrs Hamilton remained in occupation of the lands following the death of her husband – but simply permitted her son to carry on farming all the lands (inc the disputed lands). They submitted that the income from the farm went towards the upkeep of the farm and to repaying the debts of the deceased. Furthermore, it was submitted that Mr Hamilton was engaged in a joint operation with his mother whereby he farmed the lands with her knowledge and consent.

Delivering the judgment of the Court, Justice Peart said that the unusual facts of the case demonstrated “the importance of promptly attending to legal formalities fully and completely upon the death of a landowner”.

Rejecting the arguments raised by the appellants, Justice Peart was satisfied that the trial judge asked the correct questions, applied the correct principles, and was correct to conclude on the facts that any acts on the part of Mrs Hamilton were insufficient to disentitle Mr Hamilton to the declaration he was ultimately granted by the High Court. Any actions by Mrs Hamilton within the required 12 year period were irrelevant to the disputed lands, and therefore exclusive possession by Mr Hamilton continued uninterrupted.

Dismissing the appeal, Justice Peart said that the facts demonstrated that Mr Hamilton’s occupation of the land during the twelve year period was adverse to the title of the true owner and that Mrs Hamilton had taken no steps during that period to interrupt that possession.