The Court of Appeal has overturned a High Court dismissal of Promontoria (Oyster) DAC’s claim against Kieran McKenna, ruling that the lender did not have to produce separate evidence of when the original land certificate was deposited as security.
The dispute concerns a loan facility of €36,000 agreed by Ulster Bank Ireland Limited in 2005 for McKenna and his wife. The loan offer identified an equitable deposit of the original land certificate for Folio 12302, County Monaghan, as security. The judgment says McKenna is the sole registered owner of those lands, and his family home is not there.
Ulster Bank’s lien was registered against the folio in 2009. Promontoria later acquired the loan facility and associated interest. Its director’s affidavit stated that payments were not made, a demand was issued in June 2018, and €38,930.05 was due as of 20 December 2018. McKenna did not file a responding affidavit in the High Court, and the judgment records no apparent dispute there about the debt or the loan offer.
The High Court dismissed Promontoria’s application for a declaration that the debt was well charged on the lands and for an order for sale. It considered evidence of the land certificate’s deposit necessary to prove the equitable mortgage and establish its creation date, which could matter to priority between competing claims.
On appeal, the Court of Appeal held that registration was conclusive evidence that the registered owner’s title was subject to the section 73 lien. The court agreed that registration alone did not establish Promontoria’s entitlement to relief: the lender also had to show that the debt was due and that it was secured on the lands. But it ruled that the loan offer, which purported to bear McKenna’s signature and was not disputed, established the link between the loan and the security. The court said the initial deposit’s date and circumstances did not have to be proved for this application. No priority dispute was before it.
The court set aside the High Court judgment and order. It said Promontoria was entitled to a well charging order and an order for sale in default, but did not finalise those orders. It proposed allowing three months for payment before a sale order took effect, subject to submissions, and gave the parties 21 days to apply for a brief hearing on the proposed terms, including costs. The court’s observations on costs were provisional: it indicated that the High Court costs order for McKenna should be set aside, that Promontoria appeared entitled to its costs, and that there should be no order for appeal costs because McKenna had not participated. If no application for a hearing was made, the proposed orders would be made.