Return to innocence: the ‘innocent’ co-owner in mortgage litigation


A recent judgment of the Court of Appeal appears to strengthen the concept of the ‘innocent’ co-owner, writes Gary Hayes in the March Gazette.

In the Court of Appeal decision on Muintir Skibbereen Credit Union v Hamilton & Crowley, a credit union was granted ‘well charging’ orders in respect of two family homes. However, it was refused an order for partition and sale.

Background to the case

The case was not unique. Two mortgage holders - Mr Hamilton and Mr Crowley - had procured a joint commercial loan from the credit union for use in property development. When they were unable to repay the loan, judgment of €562,500 plus costs was entered against them, and subsequently registered over the folios of both homes. The credit union then issued special summons seeking various reliefs, including orders of partition and sale.

However, the presence of Mr Hamilton’s and Mr Crowley’s spouses as notice parties complicated matters. The Crowleys had three children under 13; the Hamiltons had no dependent children, but suffered from ill health. Neither spouse had demonstrated any knowledge of the commercial loan arrangements. Both lacked the resources to obtain alternative accommodation.

Reviving innocence

The decision to refuse the orders of partition and sale in the circumstances reminds Gary Hayes, a Dublin-based barrister and volunteer with the Free Legal Advice Centres, of First National Building Society v Ring. In that 1992 case, current Chief Justice Susan Denham (then sitting in the High Court) granted a well charging order over a family home, but refused to grant an order for partition and sale. The ‘innocence’ of the defendant’s spouse in the matter, and the circumstances of the defendants, were important factors in the decision.

Given the sheer volume of loans in arrears and registered judgments against property, Hayes writes, this judgment may have ramifications for other similar cases.

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