The Court of Appeal has dismissed Joseph Leddin’s appeal against a High Court declaration that a mortgage charge over a County Cork property was void against the liquidator of Diamond Rock Developments Limited.
The dispute concerned a charge created by deed on 8 June 2018 to secure repayment of a €400,000 loan, plus interest. The company did not register the charge particulars with the Companies Registration Office within 21 days, as required by section 409 of the Companies Act 2014. The Court of Appeal said the missed deadline was 29 June 2018.
Diamond Rock Developments entered liquidation on 14 February 2022. Gerard Murphy was appointed liquidator. The company’s estimated liabilities were €1,428,882, against assets with an estimated realisable value of €346,072. Its principal asset was a site at The Mill, Belgooly, estimated to realise €341,072.
Leddin argued that the charge had changed in legal character after he entered possession of the property, and that section 409 no longer applied. The Court of Appeal rejected that argument. It held that the charge remained the basis of any rights he had to sell the property, and that the statutory consequence of failing to register within 21 days was clear: the charge was void against the liquidator.
The High Court had also declared a separate deed dated 1 February 2022 invalid under section 604. Leddin had abandoned reliance on that charge before the High Court hearing, and no appeal was brought against that declaration or the order requiring him to withdraw his application to register it.
The appeal court clarified the limits of the High Court order. It declared the 2018 charge void against the liquidator, not against the company. The only ancillary order concerning that charge restrained Leddin from taking further steps to register it with the Property Registration Authority. The High Court did not grant the broader injunction restraining interference with or disposal of the property that had been sought.
The court added that if Leddin had been in possession, that possession could only have been based on rights as chargee and could no longer be lawful against the liquidator after liquidation. Any further direction or order would be for the High Court to consider. The appeal was dismissed.