The High Court declared that Gordon Smith holds the full beneficial interest in a Saggart property and that Promontoria Scariff DAC holds an equitable mortgage over it. The court did not order the property’s legal title to be transferred to Smith, and left any consequential orders, including costs, for a further hearing.
In a judgment delivered on 26 May 2020, Ms Justice Pilkington said the property had been bought under a 2006 contract by Smith and Clare O’Riordan. The full purchase price was paid, using €1.365 million advanced between June 2006 and July 2007, but no conveyance was completed and no legal mortgage was executed.
The vendors remained the legal owners, while Smith and O’Riordan continued to live at the property. The judge noted that the vendors could no longer be located and that the purchasers’ solicitor had failed to fulfil an undertaking to register a legal mortgage. The solicitor was no longer practising and had been struck off, the judgment said.
O’Riordan was adjudicated bankrupt in July 2018. The Official Assignee, though notified of the proceedings, chose not to take a formal part. Promontoria proceeded solely in respect of Smith after being substituted for Ulster Bank Ireland DAC in 2019.
Promontoria had sought orders under the Trustee Act 1893 to vest the vendors’ interest in Smith and the Official Assignee, as well as alternative declarations concerning its interest in the property. Smith’s counsel argued that changes made by the Land and Conveyancing Law Reform Act 2009 affected the beneficial interest. The judge rejected that argument, finding that the dispute arose from a 2006 transaction and applying the approach in *Tempany v Hynes*.
The judge held that because the full purchase price had been paid, the purchasers’ beneficial interest amounted to 100%, while the vendors retained bare legal title. She declined to use section 26 of the 1893 Act to vest that title in Smith, finding that Promontoria lacked a sufficient interest in the vendors’ title for that relief and noting that Smith did not seek to rectify his title in these proceedings.
Separately, the judge found on the balance of probabilities that the loan was advanced on the basis that the purchasers would grant a legal mortgage. That agreement and the advance gave rise to an equity in Promontoria’s favour. The court therefore declared that Promontoria holds an equitable mortgage over the property. The judgment did not determine costs or any further consequential orders; the parties were to be heard on those matters.