High Court of Ireland Decisions

Bank of Ireland v. Hanrahan [1987] IEHC 24 (10 February 1987)\

THE HIGH COURT

1985 No.1000 Sp Ct

BETWEEN

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

PLAINTIFF

AND

JOHN HANRAHAN

DEFENDANT

Judgment delivered by O'Hanlon J., the 10th day of

February, 1987.

In this case the Bank seeks to enforce an equitable mortgage against the lands of the Defendant comprised in Folio 36805 of the Register of Freeholders, Co. Cork. The Defendant and his wife, Bridget Hanrahan, filed Affidavits for the purpose of resisting the Bank's claim, and several issues of fact concerning the circumstances surrounding the deposit of the Defendant's Land Certificate with the Bank arose for determination. Consequently, the matter was set down for hearing with oral evidence and evidence was given by Messrs. Con Cronin and Liam O'Donovan, representing the Bank, and by the Defendant and his wife in contesting the claim. The principal conflict of the fact between the parties concerned the date of execution by Bridget Hanrahan of a consent to the deposit of the said Land Certificate by the Defendant with the Bank by way of equitable mortgage to secure advances made and to be made to him by the Bank.

As the family home is part of the property comprised in the said Folio, the consent of the wife was necessary under the provisions of the Family Home Protection Act, 1976, Sec. 3, and the Section speaks of "the prior consent in writing of the other spouse" so that it was necessary for the Bank to establish that Mrs. Hanrahan had given her consent to the transaction before the Defendant had effected the deposit of his Land Certificate with the Bank by way of equitable mortgage of the lands comprised in the said Folio. It was common case that the Land Certificate was handed over to the Bank on the 14th March,

1978, and the evidence given on behalf of the Bank was to the effect that Mrs. Hanrahan executed a written consent to the equitable deposit on the same day, whereas the Defendant and his wife both contended that she had executed this document at a much later date in fact, in the month of January 1982.

Mrs. Hanrahan also contended that she did not know the nature and effect of the document she was asked to sign and that she signed it without reading it and without understanding what it was about.

On these issues of fact I found the evidence of the Bank witnesses much more convincing than that of the Defendant and his wife, and I made a finding of fact that Mrs. Hanrahan executed a written consent on the same day that the deposit of the Land Certificate was made by her husband and that she was aware of the nature and effect of the document which she was signing. I was also prepared to accept the evidence of Mr. Con Cronin that he read over the document to Mrs. Hanrahan and explained it to her. This would have concluded the matter but for one unusual feature of the case which made it necessary for me to reserve judgment. Mr. Cronin said that the Defendant called on the 14th March, 1978, and brought in his Land Certificate with the intention of leaving it with the Bank as security for a loan which the Bank had agreed to give him. The Land Certificate was duly handed over to Mr. Cronin, but it was pointed out to the Defendant that his wife, who was not with him at the time, would have to call and give her consent to the transaction. The Defendant left the Bank, leaving his Land Certificate in the custody of the Bank, and later on the same day - approximately two hours later - his wife called and signed the necessary consent to comply with the provisions of the Family Home Protection Act, 1976.

If the attempt by the Defendant to effect a mortgage by equitable deposit of his Land Certificate was already complete before his wife called in to execute the consent, then it was not a "prior consent in writing" as required by the Act, and the transaction should be regarded as void.

However, my ultimate conclusion, in the particular circumstances of the present case, is that the Bank and the Defendant impliedly agreed to the retention by the Bank of the Land Certificate as mere custodians thereof until such time as the Defendant's wife came in to sign the necessary consent, and that a tacit agreement should be implied as between the Bank and the Defendant that as and from the time when Mrs. Hanrahan signed the consent, the character in which the Land Certificate was held by the Bank should change and that from that time forward they should be entitled to retain it in the capacity of equitable mortgages.

On this basis I propose to make a declaration as sought in the Special Summons, declaring the agreed sum of £64,197.46 to be well-charged on the Defendant's interest in the said Lands comprised in Folio 36805 of the Register of Freeholders, County Cork, the said sum representing principal and interest up to the 28th October, 1986, with further interest from that date until payment at the appropriate rate, and dispensing with accounts and inquires as to the amount due save for the purpose of calculating continuing interest as aforesaid, and I make a further Order for a sale of the said lands to discharge the Defendant's said liability to the Plaintiff in default of payment of the amount due within a period of three months from today's date the Plaintiff to have the costs of the proceedings.

RODERICK O’HANLON

10^th day of February, 1987.