The High Court strikes down bogus Inhibitions

Author: Joanne Cooney and Mark Woodcock

March 22, 2019

The High Court recently held that the timing of an application for the registration of an Inhibition on property was designed to “delay or hinder the due enforcement of the rights of the plaintiff pursuant to its validly registered judgment mortgage” and held it to be void.[1]

The Plaintiff obtained judgment against the Defendants in August 2009 and subsequently registered a judgment mortgage on various properties in February 2011.  In January 2012, the Plaintiff commenced well-charging proceedings to sell the various properties. In defending those proceedings, there was no suggestion that the Defendants were not the full owners of the properties in question. However, a mere three months prior to ultimately obtaining the order for sale, the mother and brother of the first Defendant lodged an inhibition setting out an equitable interest in the properties.

The Court was critical of the timing of the application for an inhibition and held that it was lodged with the sole objective of defeating the due enforcement process of the judgment creditor. The Court was satisfied in this case to exercise its discretion pursuant to Section 98(3) of the Registration of Title Act, 1964 and cancel the Inhibition, confirming the creditor’s entitlement to have the property realised through the Examiner’s Office.

The judgment highlights the growing practice of debtors filing Inhibitions, Cautions and/or Lites Pendentes against charged property to frustrate charge holders attempting to realise their security. More helpfully, the judgment sends a strong message out that such tactics will not be tolerated if there is mal fides.

Inhibitions, Cautions and Lites Pendentes are different forms of burdens registered to impede the sale of effected property.

If you require any advice on the registration of a Caution or Inhibition or a Lis Pendens, or more importantly advice on how to set them aside, please contact Joanne Cooney.

[1] ACC Loan Management Limited and William Fryday and Vanda Fryday and Lavinia Fryday and Richard Fryday [2019] IEHC 103

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