The High Court has ruled that a mortgage signed by developer Kevin Dempsey in 2004 remained valid after his solicitor later amended it to reflect updated Land Registry folio numbers. The court ordered specific performance of Mr Dempsey’s agreement with his former solicitors and appointed a trustee to sign documents needed to register the lender’s first-ranking mortgage.
In an ex tempore judgment delivered on 19 October 2017, Mr Justice Twomey said Wells & O’Carroll Solicitors had paid €69,030 in stamp duty, interest and penalties after Mr Dempsey failed to pay the duty due on a transfer of 30 acres at Knockatain, Co Cavan. The firm said it had done so to meet its undertaking to Irish Nationwide Building Society (INBS) to provide a first legal mortgage over the land and two sites at Killanney, Co Monaghan.
Mr Dempsey had borrowed €400,000 from INBS in 2004 and agreed to mortgage the properties. He did not dispute the loan, his agreement to provide security or that he had failed to repay it. The judgment records evidence that his bank borrowings then stood at about €2 million. He also accepted in written submissions that he was bound to execute documents to give the society a valid charge.
The court heard that the Land Registry refused to register the mortgage deed because it referred to Folio 17314, a folio created in 2008, although Mr Dempsey had signed the deed in 2004. His solicitor, Patrick Callanan, had inserted the updated reference after the deed was signed and without the signatories’ consent. Mr Dempsey relied on that alteration to refuse to sign a fresh deed.
The judge said the amendment was “regrettable” and ill-advised, but did not change Mr Dempsey’s contractual obligations. Applying the approach in *Anglo Irish Bank v Collins* [2011] IEHC 385, he held that the change made the deed accurately identify the land Mr Dempsey had agreed to charge, rather than misrepresenting the deed. The mortgage was therefore valid and effective over the folios listed in its third schedule.
The court also found that, although Mr Dempsey had not signed the front page of the Client’s Authority and Retainer, his signed loan offer, evidence about the solicitor’s advice and signed family-home certificate established his authority for the undertaking. No release from the undertaking had been obtained.
The judgment ordered specific performance of that agreement. To supplement the order, the court appointed Ashleigh Ward, a solicitor with Gleeson McGrath Baldwin, as trustee on Mr Dempsey’s behalf under section 31 of the Trustee Act 1893. She may execute documents necessary to procure registration of Promontoria (Arrow) Limited as owner of the first-ranking mortgage over the properties. The judgment says the mortgage had passed first to NAMA and then to Promontoria (Arrow) Limited.
The court said the form of orders and certain ancillary orders sought by the plaintiff had been provided to the Registrar, with amendments approved by the court.