The High Court has ruled that a judgment mortgage registered against an apartment held by pension-scheme trustees could not burden the property because one of the trustees had no interest in it for the mortgage to attach to.
Mr Justice Allen gave the ruling in a special summons brought by Goodbody Pensioneer Trustees Limited and Caroline McBride against Hevac Limited. The plaintiffs sought a declaration that a judgment mortgage registered against Folio 6053L, Co Louth, was invalid. The court’s judgment, delivered on 1 March 2019, set out proposed orders and said they were subject to any submissions from counsel.
The apartment, in a block at Hoey’s Lane, Dundalk, was purchased in 2006. The plaintiffs were registered as its full owners in January 2008. The judgment said they held it on trust under the Larry Fay Heating Limited Caroline McBride Pension Scheme, established by deed in 2005. The scheme was approved by the Revenue Commissioners as an exempt approved scheme.
Hevac obtained a judgment against McBride personally for €350,000 plus costs in January 2014, then registered it as a judgment mortgage against her interest in the apartment in March 2015. The plaintiffs argued she had no beneficial interest in the property and held it as trustee.
Hevac’s credit manager said the company had no notice of a trust when it registered the mortgage and relied on the folio. He also suggested the scheme might be a bare trust used to shield property in which McBride had an interest. The judge said the affidavit provided no basis for that suggestion, which was abandoned at the hearing.
The defence also made submissions about whether a creditor could seek a receiver over a contingent pension benefit or require a scheme member to choose accelerated benefits. The judge said those arguments did not address the issue before him: whether a personal judgment could be registered against trust property where the debtor had no beneficial interest in it.
Mr Justice Allen concluded that McBride had no estate, interest or right in the land capable of being affected by the judgment mortgage. He said a creditor could not execute a personal judgment against property she held in trust. He proposed orders stating that the mortgage notice created no valid burden and that the plaintiffs were entitled to have the entry cancelled.