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Cite as: [1991] IEHC 2, [1992] 1 IR 375

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First National Building Society v. Ring [1991] IEHC 2; [1992] 1 IR 375 (5th July, 1991)

High Court

First National Building Society

(Plaintiff)

Eamonn Ring and Adrienne Ring

(Defendants)

No. 200sp of 1991

[5^th of July, 1991]

Status: Reported at [1992] 1 IR 375

Denham J.

This is an application by the plaintiff for the following reliefs:-

(1) A declaration that by under and by virtue of a judgment mortgage registered by the plaintiff on the 8th February, 1990, the plaintiff is entitled to a good and valid mortgage or charge over the first defendant’s interest in the lands and premises comprised in Folio 12818F of the Register of Freeholders for the County of Mayo.

(2) A declaration that there is due and owing by the first defendant to the plaintiff a total sum of £145,328.29 as on the 11th February, 1991, together with interest from the 12th February, 1991, on the reduced judgment debt of £132,059.89 at the rate of eight per cent per annum.

(3) If necessary an order that an account be taken of all monies payable by the defendant to the plaintiff on foot of the said judgment mortgage hereinbefore referred to.

(4) If necessary an order that an inquiry be made as to the persons interested in the said lands and premises, the shares, proportions and such other matters as to this honourable court shall seem fit.

(5) That in default of payment of the said monies, payment thereof be enforced by a sale of the said lands and premises in lieu of partition or alternatively by the appointment of a receiver, or both.

(6) Such further and other relief as to this honourable court shall seem fit.

(7) The costs of the proceedings.

1. In essence the plaintiff seeks a well charging order and an order for sale in lieu of partition.

2. The second defendant submits that there should be no order for sale in lieu of partition.

3. The first defendant is in hospital, where he has been for some time and is likely to remain for a further time. His solicitor informed the court that the second defendant had no hand, act or part in the acts of the first defendant which caused the loss to the plaintiff of the sum in question.

4. Counsel for Allied Irish Banks plc, who have a mortgage against the interest of the first defendant on the folio, informed the court that they did not object to this application. They registered a judgment mortgage against the first defendant in 1985 for £21,436. Three thousand pounds was paid off. With interest running, approximately £20,000 is now due and owing to the Allied Irish Bank by the first defendant. However no further steps have been taken by the Allied Irish Banks.

5. On the 12th January, 1990 the plaintiff obtained a judgment against the first defendant for £158,453.23 and costs of £271 making a total of £153,724.23. On the 8th February, 1990, the plaintiff complying with s.6 of the Judgment Mortgage (Ireland) Act, 1850, converted the said judgment into a judgment mortgage over the first defendant’s interest in the lands and premises being the lands of Carrow Beg and Swinford, Barony of Gallen in the County of Mayo comprised in Folio 12818F of the Register of Freeholders for the County of Mayo. The plaintiff states that there is now due and owing by the first defendant to the plaintiff the sum of £132,059.89 on foot of the said judgment with the sum of £13,297.44 for interest. (There has been part payment). The lands and premises the subject matter of the proceedings are jointly owned by the defendants, and are the family home.

6. The second defendant is the wife of the first defendant and by consent was joined as the second defendant. She is not in any way personally indebted to the plaintiff and no judgment has been obtained by the plaintiff against her. She was joined as defendant solely to defend her family home. She is a married woman and has three children two of whom are receiving full-time education and the youngest of whom is 11 years old. She is the joint owner of the family home to the purchase of which she contributed a great deal. The premises are the family home and are central to the family life and its location is central to the family activities and education. If the family home were sold the disruption to family life would be enormous and very detrimental. She would be unable to purchase another dwellinghouse with her share of the net proceeds of the sale of the home and her family would be homeless and destitute. She is an innocent party. No judgment has been obtained against her. She shares no guilt or blame for any actions of the first defendant.

7. The net issue for this court to decide is whether or not there is good reason to the contrary to direct a sale of the premises. Counsel for the plaintiff seeks a well charging order and ancillary orders including an order for sale in lieu of partition. Counsel for the second defendant argues that there should be no order for sale in lieu of partition on the grounds that there are good reasons to the contrary as permitted under s. 4 of the Partition Act, 1868.

8. The premises herein are the family home. The judgment mortgage in issue relates solely to the first defendant’s interest in the family home. The second defendant retains her property rights intact. There is no dispute as to the debt for which only the first defendant is liable. The only dispute is as to the order for sale in lieu of partition. Partition itself is not a possibility as the premises is a family home.

Section 4 of the Partition Act, 1868, states:-

“In a Suit for Partition, where, if this Act had not been passed, a Decree for Partition might have been made, then if the Party or Parties interested, individually or collectively, to the Extent of One Moiety or upwards in the Property to which the Suit relates, request the Court to direct a Sale of the Property and a Distribution of the Proceeds instead of a Division of the Property between or among the Parties interested, the Court shall, unless it sees good Reason to the contrary, direct a Sale of the Property accordingly, and give all necessary or proper consequential Directions.”

9. The question then is whether there is “good reason to the contrary” in this case to the granting of an order for sale in lieu of partition. There is no valuation of the house. There is no information as to current market price possible for this house. There is no full information as to the persons interested in the lands and premises, their shares and proportions. I am informed by the solicitor for the first defendant that the premises is worth approximately £40,000. Counsel for the plaintiff said that it had been valued at £80,000 though that would have to be reassessed. In view of the fact that the second defendant apparently holds a moiety, the proceeds to the plaintiff of the sale of the premises at this time on the market as it now stands would not nearly meet the debts. However this itself is not a valid reason to refuse an order for sale.

10. The second defendant is an entirely innocent party; there is no judgment registered against her; the disruption to her and her family at this time would be immense. The second defendant has her property rights under law, but in addition, while the registration of a judgment mortgage is not a conveyance and is a security, the fact that the premises in question is a family home is a factor which I consider I can include as a relevant factor in exercising the discretion set out in s. 4 of the Partition Act, 1868.

11. I was referred to O’D. v. O’D. (Unreported, High Court, Murphy J., 18th November, 1983). Murphy J. says at pp. 9-10:-

“What he seeks is an order for sale in lieu of partition. Such an order will not be made where the court sees good reason to the contrary. What constitutes good reason for the purposes of that section has been considered in a number of decided cases of some antiquity. A number of these cases are reviewed by Munroe J. in Re Whitwell’s Estate (1887)19 L.R. Ir. 45. Munroe J. himself appears to have been satisfied that it would be inappropriate to order a sale if it were likely to prove abortive or if it would involve the parties in accepting a significant sacrifice.”

12. Murphy J. then went on to refuse the order for sale in lieu of partition in that case.

13. The plaintiff relied on Containercare Ltd. v. Wycherley [1982] I.R.143.

14. It was submitted that the dissenting spouse’s right to object to a sale was not a property right but a personal right as between the spouses.

15. The first defendant’s interest is vested in the plaintiff. The second defendant does not have a right of veto. However, the court does have the power invested in it by s. 4 of the Partition Act, 1868.

16. Most of the cases I was referred to consider the question of veto under the Family Home Protection Act, 1976. However the issue here is the interpretation of s. 4 of the Partition Act, 1868.

17. There is no valuation of the premises now or at other relevant times. There is no determination of the various proportions and shares of any other interests in the property. Clearly it is in the second defendant’s interest to try to retain this property if at all feasible. This matter has not been enquired into at all. There is no information on the real likelihood of sale of this house. The court would not ordinarily make an order which would be futile.

18. The second defendant who is a co-owner and who is an innocent party and has no judgment registered against her would undoubtedly suffer a significant sacrifice if her property, part of the family home, were sold now. In these circumstances it does not appear appropriate now to order partition or sale in lieu of partition.

19. I make a well charging order over the first defendant’s interest in the lands comprised in Folio 128 18F Register of Freeholders County of Mayo per para. 1 of the special indorsement of claim herein. I make a declaration that there is due and owing by the first defendant to the plaintiff on foot of the judgment mortgage £145,328.29.

20. I order an inquiry to be made as to the persons interested in the lands and premises, their shares and proportions, the current market price valuation of the property, the feasibility of its sale, and an inquiry as to whether there is any possibility of the second defendant making financial arrangements to purchase the first defendant’s share at an agreed price. I adjourn generally the balance of the proceedings with liberty to re-enter.