The High Court has refused Promontoria (Oyster) DAC’s application for a well charging order over land in County Westmeath, ruling that a registered lien could not secure further loans entered into after 31 December 2009.
Mr Justice Garrett Simons delivered judgment on 7 March 2022. Promontoria sought an order charging John Fox’s interest in land with sums said to be due under two Ulster Bank loan agreements signed in June 2010. One was a €40,000 demand loan and the other a €100,000 overdraft facility. It also sought a declaration that €145,918.80, together with continuing interest, was due.
The land register recorded a lien in favour of Ulster Bank in March 2009. Promontoria asserted that it had succeeded to Ulster Bank’s interest, which was noted on the register in 2017. The judgment says the original lien appears to have arisen from the earlier deposit of a land certificate as security for a loan.
Promontoria argued that the registered lien retained the capacity of the original security to cover future advances, and that Fox had agreed in the 2010 loan documents to secure the loans on the lien. Fox argued that a registered lien only preserved existing security and could not be extended to loans made after the statutory change; on that basis, he said, the 2010 borrowing was unsecured.
The judge concluded that the transitional legislation converted the former equitable interest into a different legal form, a registered lien. He said the legislation protected existing property rights but did not allow a registered lien to secure later lending. Under the amended regime, security for repayment of a debt against registered land was to be created by a charge. The parties’ contractual intention could not override that statutory scheme.
The court therefore held that the two 2010 loans were not secured against the land and refused the well charging order. The judgment records a provisional view that Fox should recover his costs, as he had succeeded in opposing the application. Final orders, including any argument for a different costs order, were listed for a remote hearing on 21 March 2022. The judgment does not record the final costs order.