Bank of Ireland v. Coen [1988] IEHC 19 (11 November 1988)

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This is a claim by the Plaintiffs (the Bank) for a declaration that the lands the subject matter of Folio 17732 and of Folio 22010 of the Register of Freeholders County Roscommon are well charged with certain debts owing by the Defendants to the Bank.

A similar claim in relation to other lands being the subject matter of Folio 2359 and Folio 2360 of the Register of Freeholders, County Sligo and of Folio 12623F of the Register of Freeholders, County Cork came before the High Court on the 3rd of November 1986 and a declaration was made by consent that the moneys in question were well charged on those lands and the usual Orders ancilliary to such a declaration were also made. That declaration and the ancilliary Orders were made by ' O'Hanlon J., and by consent it was also ordered that the Bank's claim for a similar declaration and ancilliary Orders in relation to the County Roscommon lands should be adjourned for plenary hearing without pleadings. It is that issue that came before me by way of Plenary hearing on Wednesday the 2nd of November 1988 and at the end of the hearing I reserved my Judgment.

The registered owner of the lands the subject matter of Folio 17732 and Folio 22010 County Roscommon is the first Defendant Francis Coen. The lands the subject matter of Folio 17732 comprise 27 acres 2 roods and 27 perches and those the subject matter of Folio 22010 comprise 20 acres 2 roods and 30 perches making a total of 48 acres 1 rood and 17 perches.

It was conceded by both Defendants at the hearing before me that the land certificate of Folio 17732 was deposited by the first Defendant with what is now the Boyle Branch County Roscommon of the Bank on the 11th of February 1963 "to secure all his liabilities, present and future, either solely or jointly with another or others". It was further conceded by both Defendants that the land certificate of Folio 22010 was deposited by the first Defendant with the same branch of the Bank on the 9th of December 1969 "to secure all his liabilities, present and future, either solely or jointly with another or others".

The case made before me by the Defendants was that in or about the year 1976 or 1977 the then and the present Manager of the Boyle Branch of the Bank, Mr. Denis O'Donnell, had agreed to release the lands in question from the equitable mortgage by deposit and had agreed to hold the said land certificates for safekeeping only and not otherwise. This allegation was denied by the Bank and by the said Denis 0’Donnell in evidence.

The Defendants' evidence was that in or about the year 1976 they had succeeded in paying off all debts due by them to the Bank in respect of lands theretofore purchased by them and that the second Defendant attended at the Boyle Branch of the Bank with a view to taking home the land certificates. The Defendants further said that at about that time they wished to purchase about 58 acres of lands at Tulsk in the County of Roscommon and required Bank facilities to finance that purchase. Some of the documentation comprising "applications for accommodation" which was produced to me in the course of the hearing would suggest that the Tulsk lands had been bought P1 before January 1968 and it may be that it was other lands perhaps in County Sligo which were in contemplation of purchase at the time in 1976. In any event the Defendants alleged that having discussed their plans to purchase more lands the said Denis O'Donnell agreed to provide the necessary overdraft facilities and further agreed that he would hold only the land certificates of the Sligo lands and the Cork lands hereinbefore mentioned as security for the increased overdraft facilities and would hold the land certificates relating to the Roscommon lands for safekeeping only, those lands no longer to be security for the overdrafts allowed to the Defendants.

The Defendants are not merely farmers but were at all material times also cattle dealers in a substantial way of business. The documents produced before me in the course of the hearing showed that throughout the years 1976 and 1977 the Defendants were applying for additional overdraft facilities to finance their cattle-dealing business which needed additional finance because of substantial increases in the price of cattle during the 1970s. An application for accommodation dated the 9th of April 1976 showed an existing overdraft permission of £4,000 which was sought to be increased to £7,500: an application of the 1st of October 1976 showed that the permitted overdraft had then become £10,000 and was sought to be increased to £20,000: an application of the 2nd of May 1977 showed that the permitted overdraft was then £25,000 and it was sought to maintain it at that and likewise further applications of the 27th of October 1977 and the 28th of February 1978.

The documents also show that throughout the years 1976 and 1977 Folio 17732 and Folio 22010 County Roscommon were held as security but the Sligo lands the subject matter of Folio 2359 and Folio 2360 apparently were not yet properly deposited lthough earlier application forms would suggest the contrary.

In any event in November 1977 and February 1978 the first Defendant and the second Defendant respectively deposited their land certificates relating to those Sligo lands which were held by them as tenants in common in equal and undivided shares each having his own land certificate relating to his own half of the undivided share. In a nutshell the Defendants contended before me that those Sligo lands were substituted for the Roscommon lands and were not given by way of additional security. The documentation clearly showed that for quite some years previously the Bank regarded themselves as holding both those Sligo lands and the Roscommon lands as security for the overdraft facilities.

It is obvious from the evidence that neither Defendant has a clear understanding of the meaning and the continuing effect of a deposit of title deeds by way of equitable mortgage and in particular that the mere fact that at certain times no debt may be owing to the Bank does not alter the position that the lands remain as security when the account runs into overdraft again. There were certainly discussions about depositing the Sligo land certificates during November 1977 and February 1978 as is apparent from a memorandum called a "decision memo" dated the 1st of November 1977 and the specification attached thereto. The specification attached to that memorandum clearly indicates that the Roscommon lands on Folio 17732 and Folio 22010 were held as security together with other lands whilst the second page of the specification indicates land certificates which were held but not yet deposited as including the Sligo certificates Folio 2359 and Folio 2360. On the 15th of November 1977 there is another document headed "Record of Deposit of Deeds" and this verifies a deposit by the first Defendant, Francis Coen, of the deeds set out in the schedule thereto which include the two County Sligo folios together with other land certificates of folios not the subject of these proceedings. This document of course accords with the consent Order made by Mr. Justice O'Hanlon on the 3rd of November 1986 by consent of both parties and which involved a finding that on that day the 15th of November 1977 the first Defendant did deposit those two folios whereas another three months elapsed until the 24th February 1978 before the second Defendant lodged his land certificates relating to his undivided half share in those lands.

During the years 1976 and 1977 the authorised overdraft to finance the Defendants' cattle business had risen from £4,000 to £25,000 and if as they stated in evidence before me the Defendants required further finance to purchase lands whether they be at Tulsk or Sligo, I am satisfied that what the Bank were looking for was more security and not less.

Reliance on behalf of the Defendants was also placed on the fact that the Roscommon lands are not referred to in a form of application dated the 28th of February 1978: the reason clearly is because that was just after the formalities regarding the Sligo lands were completed when the second Defendant formally deposited his land certificate to his undivided half share on the 24th of February 1978, the first Defendant having deposited his certificate as already stated on the 15th of November 1977 and hence the reference in the document of the 28th of February 1978 to "proposed new security items already held".

The Defendants' case has a further peculiarity in that it is not alleged that the first Defendant, Francis Coen, ever requested the return of his land certificates, namely, Folio 17732 and Folio 22010 which are his sole property. It is suggested on behalf of the Defendants that the second Defendant, Michael Coen, made this request on behalf of his brother, the first Defendant, and that the Plaintiff's Manager, Denis O'Donnell, accepted the second Defendant's authority to make this request without any written or other confirmation from the first Defendant at that time.

The Bank's case is that they obtained a valid security by equitable deposit of the land certificates relating to Folio 17732 on the 11th of February 1963 and Folio 22010 on the 9^th of December 1969 and that thereafter they always retained the same as a continuing security for the Defendants' overdraft from time to time. I am quite satisfied that this is the correct position and that whatever conversations took place between the parties in the years 1976 and 1977 the Defendants wholly misunderstood the same insofar as they claim that the Bank released its security on those Roscommon lands at that or at any other time.

I therefore declare that the sum of £103,749 was well charged on the Roscommon lands the subject matter of Folio 17732 and Folio 22010 of the Register of Freeholders, County Roscommon together with interest on the said sum to the 2nd of November 1988 in the sum of £40,500.23 and further interest from the 2nd of November 1988 until payment and I make the same ancillary Orders as were made by O'Hanlon J., on the 3rd of November 1986 in relation to the Sligo and the Cork lands.

For the Plaintiffs: Patrick Keane, S.C., and Robert Hastings,. B.L. (instructed by Messrs. Patrick F. O'Connor and Son, Solicitors, Swinford, Co. Mayo).

For the Defendants: George Brady, S.C., and Noel Cosgrave, B.L. (instructed by Messrs. C.E. Callan and Co., Solicitors, Boyle, Co. Roscommon).

No cases or statutes were referred to, the case being a question of fact only.

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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Bank of Ireland v. Coen [1988] IEHC 19 (11 November 1988) URL: http://www.bailii.org/ie/cases/IEHC/1988/1988_IEHC_19.html Cite as: [1988] IEHC 19

High Court of Ireland Decisions