Background:
The Plaintiff initiated proceedings by way of Special Summons seeking a Declaration that there was due and owing monies by the Defendants to Promontoria in the sum of €255,163.68 as of August 2018 in addition to an Order that the said amount plus interest stands well charged on the interest of the Defendants in the property at 43, Dubh Carraig, Ardmore, Waterford.
The Plaintiff sought a Well charging Order on two separate grounds, one being on the basis of a Solicitors Undertaking to the Plaintiff’s predecessor, Ulster Bank, and secondly, on the basis of an agreement between the Bank and the Defendants to create such security in a Letter of Loan Offer dated the 10th September 2007.
Solicitors Undertaking:
In 2002, the Solicitors for the Defendants gave an Undertaking to hold Title Deeds on trust for the Bank. The Undertaking appeared to have been in consideration of the Bank advancing money to the Defendant’s to discharge previous Third-Party mortgages and encumbrances however, the advances to which they related to were not specified in the Undertaking. Furthermore, the Undertaking did not specify the property rather it described the property as “Office/Apartment at Dubh Carraig, Ardmore, Waterford”. Finally, the Undertaking exhibited a Land Registry map for the overall development of which the apartment formed part of, and the map was reasonably small scale.
Loan Facility:
By offer letter dated the 10th September 2007, the Bank offered credit facilities in the amount of €190,000. The Facility Letter identified the relevant security as a First Legal Charge over property at 43, Dubh Carraig, Ardmore, Co. Waterford.
In 2016, the Bank registered a Caution over the Folio as no Mortgage was executed over the property and the Loan Facilities were transferred to the Plaintiff following a loan sale in 2016.
It was claimed that the Undertaking and the Loan Facility created an equitable mortgage over the property and that €255,000 was Well Charged against the Defendants’ interest in the property
It was not established that the 2002 Loan, to which the Solicitors Undertaking related to, was still outstanding by 2007 when the Loan Facility was concluded or indeed whether it was still outstanding at the present time.
Decision of the High Court:
The Court observed that the Solicitors Undertaking was not sufficiently cleared to create an equitable mortgage over the property. It was not clear that any of the funds advanced pursuant to the Undertaking remained outstanding. The Undertaking did not clearly identify the property. The court also noted that proceedings only issued in 2019, meaning that the Plaintiff did not meet the 12- year limitation period to take an action and as such the Plaintiff could not rely on the undertaking to ground the claim.
In respect of the 2007 Loan Facility, the Court was not satisfied that the full amount which was sought to be Well Charged was due and owing as the Summons did not comply with the requirement for the full particularization of the debt and there was a lack of detail as to how the interest claimed was calculated. It was noted that the Defendants did not deny that the principal amount in the 2007 Loan Facility had been advanced and remained outstanding. The Court was satisfied that there was no dispute but that the principal amount of €190,000 was advanced and remained outstanding and on that basis, it granted a Declaration that €190,000 was Well Charged in favor of the Plaintiff in respect of the Defendants’ interest in apartment number 43, Dubh Carraig, Ardmore, Co. Waterford.