The High Court has directed that €84,240 from the sale of a Dundalk property, together with accrued interest, be transferred to solicitors acting for the Solicitors Mutual Defence Fund (SMDF). The money had been held in a joint account while the court decided whether the Agnews, who had registered a judgment mortgage, or solicitor Catherine Allison had priority to it.
The dispute concerned 33 Mary Street North, Dundalk, which belonged to Stephen Donald. Allison acted for Donald in earlier proceedings brought by the Agnews over a contract to buy other premises. In July 2009, Donald signed a document consenting to the sale of three properties, including Mary Street North, and authorising the sale proceeds to be used to address liabilities connected with Bank of Ireland’s security over his properties. The document also referred to Allison’s professional insurance claim.
The Agnews later obtained judgment against Donald for €134,136.99 in contract interest, plus costs. A judgment mortgage was registered against Mary Street North in February 2010. The property had been sold in July 2010, and €84,240 of the proceeds remained in the joint account pending the outcome of Allison’s special summons, issued in January 2011.
The Agnews argued that the 2009 document did not establish a valid charge over the property or show that its sale proceeds were needed to address the liabilities described in it. The court noted that the document did not meet the statutory requirements to operate as a registered charge, and it had not been registered. However, the judge found that it created an unregistered equitable right over the property and its sale proceeds.
Under section 117(3) of the Land and Conveyancing Law Reform Act 2009, the judge said, a judgment mortgage is subject to rights or encumbrances affecting the debtor’s land when the mortgage is registered. Because Donald’s equitable right predated the Agnews’ registration, it had priority. The judge was satisfied from the evidence as a whole that the charge secured funds to address the Bank of Ireland security problems, and that the net sale proceeds were to be sent to the SMDF under Allison’s undertaking.
The court ordered Allison and the Agnews’ solicitors to transfer the €84,240 balance, with any accrued interest, to solicitors for the SMDF in discharge of that undertaking. The judgment did not determine the assessment of damages in the separate proceedings concerning the sale contract; the court recorded that assessment had not yet taken place.