Supreme Court allowed appeal, quashing High Court order for sale in lieu of partition due to lack of jurisdiction over one joint tenant.

An Chúirt Uachtarach

The Supreme Court

Record number: 2004/477Sp

Appeal number: 488/2006

Laffoy J

Charleton J

O’Malley J

Between

ACC Bank plc

Plaintiff/Respondent

and

Gerard Lynn

Defendant

and

Kathleen Lynn

Defendant/Appellant

Judgment of Mr Justice Charleton delivered on Monday the 21st December, 2015.

1. In the special indorsement of claim on the special summons, originally returnable for 1st December 2005, the respondent ACC Bank

sought from the High Court declarations that a judgement mortgage registered by the bank over Folio 6027F of the Register of

Freeholders, County Westmeath stood well charged over the interest of Gerard Lynn, the 1st named defendant in the said lands. A

declaration was also sought that this defendant owed the bank the sum of €27,237.87 as of 7th April 2003 as well as seeking an

account, sale of the lands, possession and an enquiry, an order was sought “providing for the partition of the said land and premises.”

2. The matter came on for hearing on the ordinary Monday list before McKechnie J on 5th December 2005. He made an order declaring

that the principal monies secured by the judgment mortgage stood “well charged on the first defendant’s interest in the said land and

premises” and further ordered that in default of payment by the first defendant “the said land and premises be sold in lieu of partition

at such time and place and subject to such conditions of sale as shall be settled by the Court”.

3. Gerald Lynn and Kathleen Lynn are husband and wife. The relevant land incorporates the family home in Mullingar. They are joint

tenants of the registered freehold land. Kathleen Lynn is the sole appellant, though clearly the outcome of the appeal also affects her

husband.

Issue on appeal

4. Kathleen Lynn seeks to argue a new point on the appeal and this point appears in the notice of appeal thus:

The High Court erred in law in determining that it had jurisdiction to order sale in lieu of partition at the suit of the

judgement creditor whose judgement mortgage affect the interest of one only of two joint tenants of registered freehold

land.

This matter is not comprehensible save in the context of a chronology of events. It is in accordance with that sequence that the

correctness of the judgment of McKechnie J must be analysed. The note agreed by counsel of his judgment of 5th December 2005

reads:

The question of whether a judgement creditor could obtain an order for sale in lieu of partition over registered lands held

by joint tenants (as is the case here) was the subject of some uncertainty for a long period. The recent judgement of the

High Court in Irwin v Deasy (unreported, Finlay Geoghegan J 1st March 2004) opened to me by [counsel for the bank]

establishes that he can. I rejected the argument that there is an error in the affidavit of Tara Glynn sufficient to withhold

the well-charging order. Even if the matter was dealt with on the basis of section 3 of the Partition Act 1868 (as opposed

to section 4) an order for sale should be made. I will make orders in terms of paragraphs 1, 2, 3, 4, and 6 of the summons,

together with an order for costs to the plaintiff with an order for taxation. I will put a stay on the orders until 31st March

2006

By way of explanation, the affidavit of Kathleen Lynn referred to is the affidavit of judgment on foot of which the judgment mortgage

was registered on Folio 6027F of County Westmeath.

Chronology

5. A chronology in this case is best set out in linear form.

• 7th April 2003, ACC Bank obtain judgment against Gerald Glynn in the sum of €23,638.55 in the Circuit Court.

• 25th August 2003, a judgment mortgage is registered as against his interest in the land.

• 1st March 2004, the first judgment in unrelated case of Irwin v Deasy [2004] 4 IR 1 is given by Finlay Geoghegan J. As

a precedent, that decision was followed in this case in the High Court. This decision was to the effect that where there

was more than one co-owner of a property that the other co-owner should be joined in the special summons proceedings.

Nonetheless, the decision was to the effect that there was a jurisdiction to make an order for sale instead of an order for

partition under sections 3 and 4 of the Partition Act 1868.

• 5th December 2005, judgment of McKechnie J in the High Court in this case.

• 31st January 2006, the second judgment in Irwin v Deasy is given by Laffoy J in the High Court. This decided that a

judgment creditor who had a judgment mortgage registered against the interest of one co-owner in registered land did not

have any sufficient interest to maintain an action for the partition of such lands and, accordingly, in the absence of

legislative intervention, the High Court had no jurisdiction to order a sale instead of ordering partition of the entirety of

the co-owned registered land to enforce a judgment mortgage registered only against the interests of one co-owner.

• 13th December 2006, after over a year had passed from his judgment, the order of McKechnie J is perfected.

• 21st December 2006, Kathleen Lynn files a notice of appeal to this Court. That notice specifically calls in aid the point

of the decision of Laffoy J in Irwin v Deasy.

• 1st December 2009, the Land and Conveyancing Law Reform Act 2009 comes into force.

• 13th May 2011, this Court upholds the judgment of Laffoy J in Irwin v Deasy; both the High Court and the Supreme

Court judgment are reported at [2011] 2 IR 752.

• 24th August 2015, as of midnight on this date 12 years have passed since the registration of the judgement mortgage

and, without deciding the matter, it would appear that any claim to enforce same is statute barred.

• 16th December 2015, this case comes for hearing before this Court with both sides represented by solicitor and counsel.

No dispute

6. ACC Bank does not contest that in the event that the appellant Kathleen Lynn is entitled to, as is sought, raise the same point as

in Irwin v Deasy [2011] 2 IR 752, that the High Court lacked jurisdiction and that the order of McKechnie J cannot stand. It must be

remembered that a judgment mortgage is purely an order in execution. It is subject to particular safeguards that are set down in law

over centuries.

7. What is in dispute is that ACC Bank opposes the raising of what is described as a new point by Kathleen Lynn. The effect of not

allowing this point to be argued was responsibly accepted by ACC Bank as meaning that an order of the High Court would be upheld

by this Court where the original order was made without jurisdiction. In that regard, for the avoidance of doubt, it should be

remembered that the decision of Finlay Geoghegan J in Irwin v Deasy [No 1] was correctly opened to the High Court and that as of

the date of the judgment of McKechnie J he was required to follow that judgment, save in the exceptional circumstances where a

judge does not follow a decision of the court at the same level. The appellant bank further argues that in the event that the new

point is allowed to be argued on appeal that it should be subject to condition whereby the matter is remitted to the High Court with

an entitlement to ACC Bank to amend the pleadings to enable a claim for an order for sale of the lands and a distribution of the

proceeds of sale be made under Part 2, and specifically section 117 of the Land and Conveyancing Law Reform Act 2009. Any such

condition is opposed by counsel on behalf of Kathleen Lynn.

New point on appeal

8. Movie News Ltd v Galway County Council (Supreme Court, unreported, 25th July 1977) sets out clearly the reasons why points not

argued before the High Court should not, save in the most exceptional circumstances, be argued for the first time on appeal to the

Supreme Court. As Henchy J stated, it would be wrong for the Supreme Court, “under the guise of an appeal, [to] enter on the trial of

a matter as of first instance and thereby deprive the party aggrieved with its decision of the constitutional right of appeal which he

would have if that matter had been decided in the High Court.” Nonetheless, this Court retains discretion to enable a point not argued

at trial to be considered on appeal. In Lough Swilly Shellfish Growers v Bradley [2013] IR 227, O’Donnell J, at paragraph 26 stated:

However, with respect to the judgment of Henchy J. in Movie News Ltd. v. Galway County Council, the proposition that

the objection to any argument of a new point in an appeal is grounded in the constitutional right of appeal is not beyond

argument. Indeed, if it were so, it is hard to see how it could admit of the exceptions, unless the exceptions were

themselves mandated by the Constitution.

Most importantly, from the perspective of this case, he emphasised in the same paragraph that the Constitution does not expressly

limit appeals to points argued at trial:

What the Constitution requires is an appeal which permits the Supreme Court to consider whether the result in the High

Court is correct. The precise format and procedure of any such appeal is not dictated by the Constitution. While that

object is often and best achieved by a careful analysis of the argument in the High Court and the High Court’s

adjudication of said argument, it does not follow that the constitutional appeal must always be limited to that process.

9. The argument of points on appeal not considered at first instance encompasses circumstances that point to potentially extreme

contrasts between the factors which enable the exercise by this Court of what is a broad discretion. There is a continuum between

lack of merit in bringing in fresh points on appeal simply because they have occurred to the parties or their lawyers late in the day

and cases where the discretion should favour an appellant. In exercising that discretion, the fundamental point is where the balance

of fairness lies. That, however, cannot be the only factor. Given that the Constitution, as Henchy J stated in Movie News Ltd v

Galway County Council case, contemplates a full hearing of all issues at first instance and an appeal only on such points of law as

have been fully ventilated at first instance, a party seeking to raise a novel legal issue on appeal must justify that by reference to

some special or extraordinary factor. In a broad sense, it can be possible to describe the circumstances in which that argument might

find purchase. As O’Donnell J said in that judgment at paragraph 28:

There is a spectrum of cases in which a new issue is sought to be argued on appeal. At one extreme lie cases such as

those where argument of the point would necessarily involve new evidence, and with a consequent effect on the

evidence already given (as in K.D. (Otherwise C.) v. M.C. [1985] I.R. 697 for example); or where a party seeks to make

an argument which was actually abandoned in the High Court (as in Movie News Ltd. v. Galway County Council

(Unreported, Supreme Court, 25th July, 1977)); or, for example where a party sought to make an argument which was

diametrically opposed to that which had been advanced in the High Court and on the basis of which the High Court case

had been argued, and perhaps evidence adduced. In such cases leave would not be granted to argue a new point of

appeal. At the other end of the continuum lie cases where a new formulation of argument was made in relation to a point

advanced in the High Court, or where new materials were submitted, or perhaps where a new legal argument was sought

to be advanced which was closely related to arguments already made in the High Court, or a refinement of them, and

which was not in any way dependent upon the evidence adduced. In such cases, while a court might impose terms as to

costs, the court nevertheless retains the power in appropriate cases to permit the argument to be made.

10. Of course, it is not possible to give any definitive list of factors. In addition, however, to those stated above, the urgency or

importance of decision on a point of law which affects a multitude of cases and the conduct of the litigation may also be important.

In Koger Inc. & Anor v. James O’Donnell & Ors [2013] IESC 28, the argument of a new point on appeal was disallowed where it was

completely opposed to the points raised during the trial in the High Court. On the other hand in Cussens & Ors v Brosnan (Inspector

of Taxes) [2015] IESC 48, a fresh ground which was closely related to the arguments advanced at first instance was allowed, it being

regarded as arising from the questions already posed in the case. In the context of the fundamental obligation of the courts under the

Constitution to seek to dispense justice to litigants, earlier cases on the exercise of this discretion are of limited assistance; see for

instance London, Chatham and Dover Railway Company v South-Eastern Railway Company (1888) 40 Ch D 100 and Davis v Galmoyle

(1888) 39 Ch D 322. Any discretion to enable a new point to be argued on appeal is to be exercised in order to pursue the aim of

fundamental fairness within the limitations of the constitutional structure.

This case

11. The point now sought to be argued is not fact dependant: the interest of Kathleen Lynn, the nature of the land holding and the

fact that this is registered land are all beyond dispute. No misconduct or inadvertence in the litigation by either side needs to be

taken into consideration since the state of the law at the time of the High Court judgment appeared to be settled. Hence, each side

properly relied on such authorities as were then available to them. Nor is this issue one that was not considered at trial. At all times,

the situation of a wife holding an interest in a family home that had been made subject to a judgment mortgage would have been a

key question on the issue as to whether the appealed order should be made. The fresh point was raised in the notice of appeal at the

earliest possible opportunity and incorporated in the written submissions on the appeal so that there has been a fair opportunity to

deal with it. Most importantly, however, on the particular facts of this appeal, is the issue of this Court being placed in a position of

being required to do an injustice. Should the point as to jurisdiction not be allowed to be argued, this Court would be affirming an

order of the High Court where that court did not have the necessary jurisdiction. In all the circumstances, the Court’s discretion

should be exercised in favour of Kathleen Lynn as defendant/appellant.

12. Since the law on the issue is clear, the order of the High Court should be overturned on appeal.

13. Finally, counsel for ACC Bank has sought to make the exercise of the Court’s discretion in favour of Kathleen Lynn subject to

conditions. Prior decisions have resulted in appropriate orders as to costs where such an adjustment is necessary to maintain the

balance of fairness between the parties; see in particular Lough Swilly Shellfish Growers v Bradley per O’Donnell J at paragraph 28,

which is quoted above. No compelling reason has been advanced in this case why the Court should extend the reasoning in that case

in this instance. What ACC Bank seek is leave to amend pleadings, with a remittal to the High Court, to enable the point Part 2, and

specifically section 117 of the Land and Conveyancing Law Reform Act 2009, to be used to cure the defect in issue. While at times

the appeal in this case drifted towards an analysis of whether that provision might cure or improve the position of a judgment

mortgage holder in similar circumstances, the matter is not now for decision.

14. The point sought to be counter argued by ACC Bank is as novel a point as could be imagined. The legislation sought in aid was not

in existence at the time of the High Court order. Whereas ACC Bank might consider that the issue of fresh proceedings in order to

pursue that point might be unprofitable in the context of their apparently extant remedy in aid of execution, any such proceedings if

issued would first have to be considered in the High Court. In addition, the passage of time is to be noted. Whether the age of the

judgment mortgage renders it infirm or whether an exception to the limitation period is enabled by the decision of this court in Krops v

Irish Forestry Board [1995] 2 IR 113 are among the issues that would thereby come into focus.

15. Imposing such a condition on Kathleen Lynn would not be right. What should not happen on appeal through the raising of novel

points is the complete recasting of the litigation. Were that to be allowed, the measured consideration of points on appeal would be

replaced by an appellate court constituting itself a court of first instance and depriving the parties of the remedy of appeal that is

inherent in the structure of Article 34 of the Constitution.

Result

16. In consequence, the appeal should be allowed. The order of the High Court should be discharged except (a) the order declaring

that the principal moneys secured by the said judgment mortgage created by registration and the interest thereon and the costs of

registration stand well charged on the interest of Gerard Lynn in the said lands and premises and (b) the order acknowledging that

there is due to ACC Bank on foot of the judgment a sum of €27,239.87 for principal together with interest at the rate of 8 percent

from the 7th day of April 2003.