The High Court has ruled that a creditor whose judgment debt was secured against property can recover interest accrued after a well-charging order, even where that interest dates back more than six years. The ruling addressed a direction sought by the Assistant Examiner; it did not decide the plaintiff’s separate application for payment of the principal from court.
The dispute arose from a 1998 judgment for Ir£60,500, equivalent to €76,835, against Laurence Carlyon in favour of Paul Hickey. After Carlyon did not pay, Hickey registered a judgment mortgage over property belonging to him. In November 1999, the High Court declared the principal, interest and costs well charged on Carlyon’s interest in the land and ordered its sale if the debt was not paid. The order specified interest at 8 per cent a year from 1 July 1998 until payment.
The order was upheld on appeal in 2003. Later proceedings over a purported transfer of the property into joint names with Carlyon’s son delayed the sale. The High Court declared that transfer fraudulent and void in 2007. The property was ultimately sold in March 2013 for €280,000, with the proceeds lodged in court that June.
The Assistant Examiner asked whether interest on the secured debt ran until the sale proceeds were paid out, as the 1999 order stated, or whether the Statute of Limitations 1957 restricted recovery to six years of arrears. Hickey submitted that all interest accruing after the well-charging order was recoverable. Carlyon took no part in the consideration of either matter.
Justice David Keane held that the key question was whether Hickey was a secured creditor. He concluded that registration of the judgment mortgage gave Hickey security over the property, and that the reasoning in an earlier High Court case, Ulster Investment Bank v Rockrohan Estate Limited, applied. The six-year restriction on arrears of interest in respect of a judgment debt did not prevent recovery of interest accruing after the security was obtained.
The judge also noted that a statutory limitation defence ordinarily must be specifically pleaded. Carlyon had not raised one, but the judge considered the issue because the Assistant Examiner had requested the court’s direction. Having resolved the interest question, he found it unnecessary to decide Hickey’s application for an order directing payment of the principal. He said he would hear submissions from either party on that application.