Possession of a Family Home on Judgement Mortgage
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- Created: Thursday, July 21 2016 15:03
In a recent decision in the joint cases of Muintir Skibbereen Credit Union v. Crowley and Muintir Skibbereen Credit Union v. Hamilton, both issued simultaneously on 13th July 2016, the Court of Appeal refused to make an order directing the sale of jointly owned family homes, to enable the discharge of a Judgment debt obtained against one of the spouses.
The Court determined that this would result in the sale of the family home over the wishes of an innocent spouse, who was not party to the commercial loan transaction. The decision upheld a similar refusal by the High Court.
The credit union had registered a Judgment Mortgage over one spouse’s interest in the family home. The enforcement of the Judgment Mortgage would have then entailed the partition of the interest of each spouse, and then the sale of one spouse’s interest only. The credit union had sought orders for the partition of the legal ownership of the family home, and the sale of one spouse’s interest, pursuant to Section 31 of the Land Law and Conveyancing Act 2009 (“the 2009 Act”). This states that a Court “may” order the partition and sale of a jointly owned property.
Mr. Justice Hogan cited the Family Home Protection Act 1976, which reflected Articles 40.5 and 41 of the Irish Constitution, and the objective of preventing the sale of a family home without the consent of both spouses. Mr. Justice Hogan stated that the objective would be “seriously compromised if a family home which the couple co-owned could be effectively sold by court order over the heads of the wives in the present cases given that they had no involvement in the business affairs of their respective husbands and, critically, where they had never been given a prior opportunity to consent to such loan transactions”.
Accordingly, Mr. Justice Hogan found that the court should not make an order for sale pursuant to section 31(2)(c) of the 2009 Act, where the Judgment Mortgage affected the interest of one spouse only. The Judge noted that the position “would, of course, have been very different had the wives in question been parties to such transactions or if they had otherwise consented to the loan agreements which had given rise to the judgment mortgages in the first place”.
Interestingly, Mr. Justice Hogan also noted the practical difficulty of enforcing the sale of one spouse’s interest in a family home. He stated that “partition of a family home in these circumstances is not a realistic possibility and the sale of a divided moiety of a family home would not represent a marketable title, even if such a thing were possible”.
This decision is the first occasion in which the legal question has been considered by either the Court of Appeal or the Supreme Court, following the enactment of section 31 of the 2009 Act.