The High Court has refused Promontoria (Oyster) DAC’s application for a well charging order over land owned by Michael Kean, ruling that a registered lien arising from an earlier land certificate deposit could not secure loans advanced years later.
Mr Justice Garrett Simons held that the case was indistinguishable from an earlier High Court decision, Promontoria (Oyster) DAC v Fox. He rejected Promontoria’s arguments that a contractual promise to provide security for future loans created a separate equitable mortgage, and that constitutional interpretation required the legislation to preserve a lender’s ability to “tack” later advances onto an earlier mortgage.
The proceedings concerned land registered to Mr Kean under Folio 15424F in County Roscommon. A lien was registered against it on 31 December 2009, originally in favour of Ulster Bank Ireland Ltd. Promontoria said it succeeded to the bank’s interest. The judgment said the deposit of the land certificate had created an equitable mortgage in 2005, but that interest was later extinguished under the Registration of Deeds and Title Act 2006. The Act allowed existing liens to be registered during a transitional period.
Ulster Bank granted Mr Kean three facilities on 17 February 2012: an overdraft of €25,000 and loans of €165,000 and €260,000. Promontoria sought declarations that the land stood charged for the sums due under those facilities and the lien, including a claimed debt of €310,512.83 as of 3 September 2018. The defendant disputed the application, including whether the lien had been properly registered by the statutory deadline.
Promontoria argued that Mr Kean had agreed to provide the land certificate as security for present and future borrowing. The judge said that promise was not a separate route to security: the agreement to create security by deposit had been fulfilled, and the resulting equitable mortgage was extinguished by the 2006 Act. Later loans were governed by the new statutory regime.
On “tacking”, Promontoria argued that the earlier legal regime could have allowed later advances to gain priority over an intervening mortgage. The judge assumed, without deciding, that tacking would have applied to an equitable mortgage over registered land. But Ulster Bank had made no further advances before the legislative changes, and there was no intervening mortgage. The potential to tack had therefore not become an acquired property right, he held.
The court concluded that the interpretation adopted in Fox did not make the legislation unconstitutional and refused the application for a well charging order. The judgment did not determine the parties’ other disputed issues. The matter was listed remotely for final orders on 17 October 2022.