A UNANIMOUS Supreme Court ruling has refused the Revenue an order for sale of lands co-owned by a man and his estranged wife so as to execute judgment orders obtained against him. This has major implications for creditors seeking to sell co-owned property to satisfy a judgment mortgage obtained against just one owner.
The effect of the decision is that courts have no jurisdiction to make an order for sale of the entirety of co-owned property, in lieu of partition of such property, to enforce a judgment mortgage.
The Revenue had sought orders entitling it to sell 19 hectares in Co Cork owned by Thomas and Carmel Deasy to satisfy three judgments obtained by it against Mr Deasy.
In 2004, the Revenue secured charging orders over Mr Deasy’s interest in the lands but in 2006 the High Court ruled it was not entitled to an order for sale of the lands and the Supreme Court has upheld that order.
The Revenue is involved in at least 20 similar cases, while other cases were deferred pending yesterday’s decision by the three-judge court comprising Ms Justice Fidelma Macken, Mr Justice Joseph Finnegan and Mr Justice Donal O’Donnell.
While Mr Deasy had since reached a settlement with the Revenue, it asked the Supreme Court to determine the issues due to their relevance to other cases.
The Chief Justice, Mr Justice John Murray, previously said the issues were of “fundamental importance” to the Revenue and remained live in the context of the continued exercise of its power to recover outstanding taxes.
The issues also had important implications for the property rights of co-owners of registered land against whom it was sought to enforce judgment orders, he noted.
The Revenue’s action was against Mr Deasy, but Ms Deasy was later joined to the case by order of the High Court as she was a co-owner of the lands.
Ms Deasy raised an issue whether the High Court had jurisdiction to give a judgment creditor a remedy for enforcement of their judgment mortgage when that remedy affected not just the judgment debtor but the co-owner of the property.
Giving the Supreme Court judgment, Mr Justice Finnegan stressed the sole issue for determination in the case was whether the court could order a sale in lieu of partition of the Deasy lands. The Revenue had not sought an order for partition of the lands or for sale of Mr Deasy’s interest in them, he noted.
He found the High Court was correct in holding it had no jurisdiction under the Partition Act 1868 to make an order, on the application of the Revenue as a judgment mortgagee of registered lands, for sale of the lands in lieu of partition.
He was also satisfied the Registration of Title Act 1964 did not give the court power to order partition of property, or sale in lieu of partition, at the suit of a judgment mortgagee of registered land.
