26 September 2012

Brendan Kelly and Asta O’Kelly-v-Irish Bank Resolution Corporation Limited

High Court Record No. 2012/7193 P

Judgment of Mr Justice Sean Ryan dated the 26th September 2012

This case is of interest in relation to the registering of Lis Pendens.
A party can register a Lis Pendens with the Land Registry in the context of proceedings which will show up in any Folio search that a property in question is the subject of litigation. In these circumstances no party would, on the advice of their Solicitor, purchase such a property so essentially it means that this property will not be sold pending the resolution of potential litigation. In the context of the economic difficulties faced by many parties in this jurisdiction some cases were instituted in order to use this device to register a Lis Pendens and protect the property. The Judgment of Mr Justice Sean Ryan dated the 26th September 2012 dealt with these new cases.

In this matter a Motion was brought by the Defendant seeking to have a Lis Pendens registered by the Plaintiff struck out as an abuse of process. The property in question was mortgaged with the Irish Nationwide Building Society and the Defendant was a Bank having taken over the assets and liabilities of the Irish Nationwide. The Bank issued ejectment proceedings against the Plaintiffs in the Circuit Court which resulted in a consent Order dated the 30th January 2010. The Plaintiffs agreed to an order for Possession being made in favour of Irish Nationwide and an Order for costs with a Stay on the execution Order for a period of six months. The Stay was extended by agreement between the parties but ultimately because of default by the Plaintiffs the Bank sent the Order to the Sheriff for execution. The Plaintiffs were subsequently removed from the property on foot of the execution order and the Bank obtained possession of the property. The Bank issued Summary Summons proceedings claiming an interest in the property. The Plaintiffs issued proceedings by way of Plenary Summons in which they claimed damages against the Bank and the Sheriff alleging assault and trespass to the person. The plaintiffs registered a Lis Pendens against the property on the same date as the Plenary Summons issued. The Plaintiffs did not serve their Summons or give the Bank notice of the registration of the Lis Pendens.

Following receipt of possession the Bank put the property on the market and reached agreement by the purchaser but the Lis Pendens was registered and could have prevented completion of the sale. The bank alleged that the proceedings were instituted solely for the purpose of frustrating the sale. The Court has expressed their power to vacate the Lis Pendens under Section 123 of the Land & Conveyancing and Law Reform Act 2009 in circumstances where they were satisfied that the action was not being prosecuted bona fide. What they found in this case is that the proceedings were issued for the purpose of registering a Lis Pendens and the Plaintiffs were unable to suggest any detail or give a basis for advancing a claim as to an interest in the land and this resulted in their claim being fatal. It showed the absence of bona fides and therefore the Lis Pendens was struck down.