About this case:

• Citation:
  [2019] IESC 49
• Judgment:
  External link
• Court:
  Supreme Court
• Judge:
  Mr Justice Frank Clarke

The Supreme Court unanimously overturned the decision of the Court of Appeal, finding that the Registration of Deeds and Title Act 2006 brought a complete end to the system of lien by the deposit of a land certificate in respect of registered land.

Background

On 7 June 2006, Mr Gerard Hannon deposited land certificates for five folios of land in Co Sligo with Ulster Bank Limited as security for his indebtedness both present and future. Mr Hannon argued the certificates were deposited only for safekeeping. However, the High Court found against him in this regard, and he did not seek to appeal this finding.

In March 2010, Ulster Bank informed Mr Hannon that it intended to register a lien on the relevant folios under section 73.3 of the Registration of Deeds and Title Act 2006. The Property Registration Authority acceded to Ulster Bank’s request, and the burden on each folio was listed with an effective date of 27 November 2009.

In the High Court, Ulster Bank brought proceedings seeking to enforce its lien over the lands. Mr Justice Michael White found in favour of Ulster Bank, and Mr Hannon’s appeal against that finding was unsuccessful in the Court of Appeal.

Both courts were satisfied that the lien by deposit had not ceased to exist and, being otherwise satisfied that a valid lien existed in this case, made the appropriate orders recognising Promontoria’s position as the beneficiary of a lien over the lands.

Before the case came before the Supreme Court, Ulster Bank sold the loan asset and related security of Mr Hannon to Promontoria (Oyster) Designated Activity Company – therefore Promontoria was substituted as the plaintiff/respondent in these proceedings.

Supreme Court

The Chief Justice, Mr Justice Frank Clarke explained that section 81(5) of the Local Registration of Title (Ireland) Act 1891 recognised that a lien could be created on registered land by the deposit of a land certificate and that a similar provision was contained in section 105(5) of the Registration of Title Act 1964. As such, “the concept of the creation of a lien over registered land has a long history and even more ancient antecedents”.

Section 73 of the Registration of Deeds and Title Act 2006 abolished land certificates and certificates of charge and provided that the Property Registration Authority would cease to issue such certificates under the Registration of Title Act 1964. 

Section 73 of the Registration of Deeds and Title Act 2006 came into operation on 1 January 2007. The section provided for a three-year transition period which ran to 31 December 2009.

It was noted that the proceedings concerned liens over registered land and that no questions arose concerning unregistered land.

Mr Justice Clarke said that the proper construction of the Registration of Deeds and Title Act 2006 must be taken to have been the statutory intention to bring a complete end to the system of lien by deposit of a land certificate in respect of registered land.

Allowing Mr Hannon’s appeal, Mr Justice Clarke said it must be determined that Promontoria did not have the benefit of a lien by deposit over the lands.

Mr Justice Clarke added that nothing in his judgment should be taken as expressing a view on whether other means were open to Promontoria to pursue a claim against Mr Hannon based on having security over the relevant lands.

Ms Justice Elizabeth Dunne delivered a concurring judgment, stating that she could not come to any other view than that the effect of the changes brought about by section 73 of the Registration of Deeds and Title Act 2006, in respect of section 105 in the Registration of Title Act 1964, was that after three years, section 105 ceased to have effect. As such, this meant that an equitable deposit of a land certificate could no longer be enforced as an equitable mortgage after the date concerned.

• by Seosamh Gráinséir for Irish Legal News