The Court of Appeal has allowed Promontoria (Oyster) DAC’s appeal in well charging proceedings involving land registered to Michael Kean, holding that a registered lien may secure lending made after 31 December 2009. It also ruled that Promontoria may argue in the High Court that an equitable charge arose. The appeal did not decide whether that charge was created or whether the security covers all the loans.
The case was heard on a modular basis, with only two legal issues before the Court of Appeal. The underlying well charging proceedings still require further determination in the High Court.
Kean’s land is registered in Folio 154243 in County Roscommon. The judgment says that, from 2005, the land certificate was held by Ulster Bank as security. A lien was registered on the folio on 31 December 2009 in favour of Ulster Bank Ireland Limited, with the register also recording Promontoria’s interest from 9 March 2017. Promontoria relied on a facility letter dated 17 February 2012, under which three additional loans were advanced.
The first issue was whether the section 73 lien could secure advances made after 31 December 2009. The High Court had ruled that it could not. But before hearing Kean’s appeal, the Court of Appeal had allowed Promontoria’s appeal in a linked case, Promontoria (Oyster) DAC v Fox. Applying the same reasoning, the court held that a lien properly registered under section 73 can secure later advances.
The second issue concerned Promontoria’s alternative argument that the agreement to secure the borrowing could support an equitable charge, a form of security over property. The Court of Appeal decided only that Promontoria was entitled to advance that argument in seeking well charging relief. It did not determine whether the facility letter created an equitable charge. That question, along with a dispute over whether the lien covers all the loan facilities, remains for the judge dealing with the proceedings.
The court’s proposed costs order was that Promontoria receive the costs of the appeal, but it stayed that order pending the High Court’s final determination. Kean was given 14 days to make written submissions seeking a different costs order, with Promontoria then having the same period to respond. The judgment states that if no submissions are filed, the proposed order will be made.