The High Court refused Promontoria (Oyster) DAC’s application for a well charging order and an order for sale, finding that registration of a lien alone did not prove the creation of the equitable mortgage on which the claim relied. The court also awarded the defendant, Kieran McKenna, €500 in expenses.
Mr Justice Garrett Simons delivered the written judgment electronically on 14 July 2020, explaining an oral ruling he had made on 24 February 2020 in the Chancery Special Summons List. The application had been dismissed at that hearing. The written judgment set out the reasons; the order had not yet been perfected, and the appeal period had not begun to run when the judgment was delivered.
The judgment records that McKenna and his wife, Bridget, entered into a loan agreement with Ulster Bank Ireland Ltd on 22 March 2005. The principal sum was €36,000. A letter of offer referred to an “Equitable deposit of Original Land Certificate” for folio 12302, County Monaghan.
Promontoria’s interest in the loan and asserted mortgage was said to have transferred as part of a larger asset transaction. A folio exhibited in the proceedings recorded a lien registered against McKenna’s interest in the land on 31 December 2009, with Promontoria’s interest later noted in March 2017. McKenna did not dispute the folio’s correctness.
The court explained that, under the earlier legal framework, depositing a land certificate could create an equitable mortgage. The Registration of Deeds and Title Act 2006 provided a three-year period for existing security of that kind to be registered as a lien. A lien holder seeking enforcement through a well charging order and sale must still establish the secured debt and that it is due for repayment.
Justice Simons said the claimant also had to provide evidence of the land certificate’s deposit and the date the equitable mortgage was created, because that date could determine priority against competing mortgages. The letter of offer was the only reference to a deposit, and the judge treated it as documentary hearsay. He was not satisfied that registration by itself entitled Promontoria to the orders sought, noting that the Property Registration Authority’s registration function did not decide whether a debt was well charged on the land.
The application was refused. The judgment states that McKenna, appearing without a lawyer, was entitled to expenses measured at €500.