The High Court has refused a receiver’s request to take possession of Saggart Lodge, finding that Donna Cosgrave’s equitable interest in the house ranked ahead of the bank’s security and that the purported grant of security was void under family home legislation.
Mr Justice Gilligan delivered the judgment on 3 February 2012 in proceedings under section 316 of the Companies Act 1963. The receiver of Jeffel, Martin Ferris, had asked the court to declare that he was immediately entitled to possession of the property and that the bank’s debenture took priority over any purported transfer to Ms Cosgrave. The application was heard on affidavit evidence, written submissions and legal argument; neither side sought cross-examination or a full trial.
Ms Cosgrave, described in the judgment as the estranged wife of James Mansfield Junior, said they agreed after separating that she and their children would have a home at the property. She said they moved in during 2006 after renovation work, and that the arrangement was completed and paid for in 2007. The court accepted that she had lived there since 2006 under the agreement.
Jeffel had signed a debenture to Bank of Scotland (Ireland) Limited in March 2007. A sale contract for €900,000 was later executed in December 2007, but the transfer was not stamped or registered. The court found that the company had allowed Ms Cosgrave to live in the house in reliance on the arrangement, to her detriment, and held that she had an equitable life interest to reside there from the time she moved in. It did not determine the legal interest between Jeffel and Mr Mansfield.
The judge found that the bank had not made inquiries into the property’s title or whether anyone else had an interest. Applying the law on constructive notice, he held that the bank was fixed with notice of Ms Cosgrave’s earlier interest, which took priority over any interest the bank otherwise had.
The court also found that the property was Ms Cosgrave’s family home and that the company had purported to grant security without her written consent or a court order dispensing with consent. It held that the purported conveyance was void under the Family Home Protection Act 1976. The judgment concluded that the receiver was not entitled to the reliefs sought; it did not grant him possession of the house.