The High Court has refused to strike out a claim by two farmers who say they are owed the balance of the price for two County Wexford properties and that their unpaid vendors’ liens rank ahead of a Bank of Ireland mortgage. The dispute will proceed to a plenary hearing, where the legal and factual issues can be examined more fully.
The decision, delivered by Ms Justice Murphy on 10 October 2015, dealt with two applications: the plaintiffs’ motion for judgment in default of defence against the bank, and the bank’s counter-motion to strike out the claim. The court refused the default judgment because the evidence did not establish, on the balance of probabilities, that the plaintiffs had a vendors’ lien or other charge over either property.
The plaintiffs say they agreed in 2007 to sell two properties to George and Sam Walsh for €750,000 each. They claim that €690,000 remained unpaid on each sale. The judgment also records that each plaintiff received €60,000, and that the contract for the first property recorded a balance of €675,000, creating a discrepancy in the figures presented.
The bank advanced €1 million to the purchasers and registered a mortgage over both properties in 2008. The plaintiffs say they remained in occupation and continued farming the land. They argue that their occupation made any vendors’ liens overriding interests under section 72(1)(j) of the Registration of Title Act 1964, giving them priority over the bank’s registered charge. The bank argued that an unpaid purchase money lien could be protected by registration under section 69(1)(f), and that an unregistered lien could not take priority.
The court noted that the plaintiffs accepted their signatures on the sale documents but said they did not understand the transactions or know the properties would be transferred. The judge found that they had not adequately explained the tension between claiming unpaid sale proceeds and saying they would never have agreed to sell, or the circumstances in which they signed the documents and received the €60,000 payments. The court also noted unresolved inconsistencies about correspondence concerning a proposed right of way and the plaintiffs’ knowledge of the bank’s charge.
Despite those concerns, the court held that the bank had not met the high threshold for striking out proceedings. It found the plaintiffs’ argument about the interaction between sections 69 and 72 was not frivolous or obviously unsubstantial, given authorities from the United Kingdom concerning an identical statutory provision. The court did not decide whether the alleged liens existed or had priority, and did not grant the declarations the plaintiffs seek. It remitted the matter to a plenary hearing.