Lis pendens against receiver in land ownership proceedings dismissed as receiver lacks sufficient interest.

Neutral Citation Number: [2010] IEHC 35

THE HIGH COURT

2003 9018 P

BETWEEN

MOORVIEW DEVELOPMENTS LIMITED, SALTHILL PROPERTIES LIMITED, VALEBROOK DEVELOPMENTS LIMITED,

SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED, MALLDRO S.C. LIMITED, THE POPPINTREE MALL LIMITED

AND BLONDON PROPERTIES LIMITED

PLAINTIFFS

AND

FIRST ACTIVE PLC AND RAY JACKSON

AND BY ORDER

BERNARD DUFFY

DEFENDANTS

JUDGMENT of Mr. Justice Clarke delivered the 5th of February, 2010

1. Introduction

1.1 This is a judgment arising out of a further application in the above proceedings which have already been the subject

of a number of judgments, including a judgment of the 6th March, 2009, Moorview Developments Limited v. First Active

Plc [2009] IEHC 214 (the “main judgment”), dealing with a substantial number of issues arising in both these proceedings

and certain linked cases.

1.2 The application with which this judgment is concerned is one brought on behalf of the second named defendant (“Mr.

Jackson”) who, as is clear from the main judgment, is a receiver appointed by the first named defendant (“First Active”)

to a number of companies owned and controlled by Mr. Brian Cunningham (“the Cunningham Group”).

1.3 On the 10th August, 2007, a lis pendens was registered on behalf of the Cunningham Group against Mr. Jackson and

also, it would appear, First Active. Mr. Jackson has applied for an order vacating the lis pendens so far as he is

concerned. There is no similar application on behalf of First Active.

1.4 The application concerns what is, in reality, a very net question and I, therefore, turn to the issue between the

parties.

2. The Issue

2.1 As has been pointed out, Mr. Jackson has been appointed as a receiver to certain of the companies within the

Cunningham Group. In that capacity it is common case that he has, at the level of principle, an entitlement to cause any

of those companies to sell any of the properties captured by any relevant mortgage debenture. It is clear, therefore,

that, as a matter of fact, Mr. Jackson has the capacity to ensure that any relevant property is sold.

2.2 In addition, it is worth noting that, in circumstances which are set out fully in the main judgment, subsequent to the

appointment of Mr. Jackson as receiver to the relevant companies, First Active decided to go into possession of certain

properties itself in its capacity as a mortgagee and sought to sell the relevant properties as mortgagee in possession. It is

also clear that Mr. Jackson acted as an agent of First Active in the course of those sales.

2.3 It is clear, therefore, and not disputed, that the role which Mr. Jackson has in respect of any material properties is

either as a receiver appointed to the companies which own the relevant properties, or as an agent appointed by a

mortgagee in possession of the said properties.

2.4 In those circumstances Mr. Jackson argues that he does not have an interest in the relevant lands so that these

proceedings, at least insofar as they relate to him, do not involve a claim as against him relating to any interest in the

lands concerned. On that basis, he asserts that the lis pendens is improperly registered as against him and should be

vacated. The Cunningham Group contest that assertion.

2.5 Before going on to analyse that net issue which has arisen, it seems to me that I need to touch on three preliminary

points.

3. Preliminary Points

3.1 First, and as is clear from the main judgment, the proceedings as against Mr. Jackson were the subject of a non-suit

and are, in my view, and for reasons which I have set out in another judgment in these connected matters delivered

today, properly described as having been dismissed. However, it is true to say that there is an appeal pending to the

Supreme Court against the main judgment. It follows that the proceedings are still in being and to the extent that there

is, therefore, a “lis” in existence, it is fair to say that that lis remains pending until such time as the Supreme Court has

dealt with that appeal.

3.2 Second, it is true to say that part of the basis put forward on behalf of Mr. Jackson for seeking to have the lis

pendens vacated was that he was, he asserted, somewhat impaired in his personal dealings by having a lis pendens

registered against his name. There was a debate at the hearing before me as to whether such an assertion was factually

correct. However, that consideration seems to me to be irrelevant. Either the lis pendens is properly registered, in which

case it must remain in place, or it is not properly registered, in which case it should be vacated. Mr. Jackson is entitled to

have the lis pendens vacated if it is not properly registered irrespective of whether its registration has any affect on him.

The test is not similar to the consideration which a court may have to give in the case of an interlocutory injunction,

where the court needs to balance the interests of the parties concerned. There either is or is not a sufficient piece of

litigation in place as against Mr. Jackson to warrant the continuance of a lis pendens. If there is not, then Mr. Jackson is,

in my view, entitled to a vacation of that lis pendens as of right.

3.3 Finally, it is said that there is no urgency about this matter so that Mr. Jackson’s application could conveniently be

left over until all of the issues arising in the proceedings linked with these proceedings have been determined. This again

seems to me to be an irrelevant consideration. If Mr. Jackson is properly entitled to have the lis pendens vacated, then

he is entitled to have that done now rather than have to wait until other unconnected issues are determined.

3.4 It follows that it seems to me that I should now decide the issue of principle which arises between the parties as to

whether the connection which Mr. Jackson may have to the relevant property justifies the registration of a lis pendens

against him. I now turn to that question.

4. Analysis

4.1 Neither counsel was able to find any direct authority on the point. In those circumstances it seems to me that the

matter must be determined from first principles. A lis pendens is designed to give notice of the fact that proceedings

relating to land are pending before the court. Insofar as a lis pendens is registered against a named individual, then it

seems to me that its purpose must be to bring to the attention of any interested party, the fact that there are

proceedings in being against the person concerned which relate to the ownership of property or an interest in property. It

may be that there is contained within the one set of proceedings a number of claims against a number of defendants in

circumstances where not all of the claims are pursued against all of the defendants. It seems to me that, as a matter of

first principle, it could never be the case that a defendant who happened to be properly joined in a set of proceedings in

relation to some relief that did not relate directly to land in which the relevant defendant had an interest, could properly

be the subject of a lis pendens. There would, in those circumstances, be no lis pending in relation to the ownership of

land or an interest in land in respect of the person concerned. The underlying rationale behind the registration of a lis

pendens is as was noted by Geoghegan J. in A.S. v. G.S. [1994] 1 I.R. 407. In the course of his judgment in that case

Geoghegan J. noted with approval the explanation by Lord Cranworth in Bellamy v. Sabine [1957] 1 De. G. & J. 566. The

relevant passage speaks of “litigation…pending between a plaintiff and a defendant as to the right to a particular

estate…”.

4.2 That quote seems to me to express the fundamental proposition. The issue between the parties must relate to the

ownership of some interest in land. Where there is more than one defendant in the proceedings, then in order that a lis

pendens be validly registered in respect of a particular defendant, then the issues which arise on the pleadings and which

are being bona fide pursued by the plaintiff insofar as the relevant defendant is concerned, must relate to the ownership

of some interest in land.

4.3 In those circumstances, it does not seem to me that the position of a receiver or agent is captured. A receiver does

not own any interest in lands which are properly described as being owned by the company to which the receiver has

been appointed. The lands remain owned by the company (in receivership). The fact that the receiver may well be

entitled, provided that all necessary formalities are complied with, to execute a deed of transfer of a relevant interest in

property in the name of the company does not alter that fact. It is the company which transfers the property. The

receiver is simply entitled, by virtue of the debenture in favour of the relevant lender, and his appointment, to cause the

company to effect the transfer. There is a real sense in which the receiver’s position in this regard is no different than

that of the directors of a solvent company who are, of course, entitled to act on behalf of the company, to sell its

property, and, within the articles of association and the law generally, to fix the company seal to any relevant deed of

assurance. The fact that, in different circumstances, it may be the receiver rather than the directors who can cause the

company to execute a deed of assurance, does not make the receiver any more a person with an interest in the land

owned by the company than the directors were persons with an interest in the land owned by the company.

4.4 Therefore, it seems to me that, insofar as a plaintiff may wish to contest the ownership of land held by a company in

receivership, then it is that company in receivership who is the proper defendant to that aspect of any relevant

proceedings rather than the receiver himself. If a party wishes to obtain injunctive or similar relief against the receiver

then that is, of course, possible, but such a claim is not a claim relating to an interest in land but rather is a claim to an

injunction.

4.5 In those circumstances, it does not seem to me that a receiver has a sufficient interest in any land purportedly

owned by the company to which the receiver has been appointed so as to warrant the registration of a lis pendens

against the receiver arising out of proceedings relating to those lands. In an appropriate case there is no reason why a lis

pendens cannot be registered against a company in receivership.

5. Conclusions

5.1 In those circumstances, it seems to me that Mr. Jackson is entitled to an order vacating the lis pendens registered as

against him on the 10th August, 2007.

5.2 This judgment does not in any way affect any lis pendens registered in relation to First Active who are not a party to

this application.