Amendments Nos. 2, 41, 42 and 66 are consequential on amendment No. 40. The amendments may be discussed together, by agreement. Is that agreed? Agreed.
Land and Conveyancing Law Reform Bill 2006: Committee Stage.
Amendment No. 1 not moved.
Sections 1 and 2 agreed to.
SECTION 3.
Government amendment No. 2:
In page 14, to delete lines 6 and 7.
This is an official amendment which states that the main amendment in this grouping is amendment No. 40, which simplifies the definition of "mortgage" in section 86 by replacing the term "charge by way of legal mortgage" with the simpler term "legal mortgage". The amendments to sections 3, 87 and 121 are all consequential on the amendment to section 86.
Amendment agreed to.
I move amendment No. 3:
In page 15, line 6, after "land," to insert "unless excluded from any interest in land,"
This is a technical amendment that extends the definition of land in Part 1. It takes cognisance of the fact that land as defined may include such things as mines, minerals and other subterranean elements. I would like to know the Minister's view in this regard.
Prima facie we would believe land includes anything which composes that land, be it earth, soil, rock, minerals or otherwise. Therefore, I wondered about the exact purpose of the amendment. If there were some point of substance, I would have to ask the expert drafting group to examine it. In general, land encompasses the material of which land is composed. Unless I am missing some point, I believe the present definition is sufficient.
I accept that. However, in certain circumstances one might not simply be referring to land in a field, for example, as we might generally think of land. A situation could arise where mines, minerals or other elements would be the subject of discussion. The Minister states that land as defined in this Bill includes such things. If he is clear on this point, I am happy to accept it.
Given the advice I have just received, I am very clear on it. I am grateful to my official for drawing to my attention that a definition of "land" is included on page 15 of the Bill. Paragraph (b) of that definition includes “mines, minerals and other substances in the substratum below the surface, whether or not owned in horizontal, vertical or other layers apart from the surface of the land”. That is probably as good as it gets.
Amendment, by leave, withdrawn.
Amendments Nos. 4, 62 to 64, inclusive, and 67 are related and will be discussed together by agreement.
Government amendment No. 4:
In page 15, line 31, to delete "and a judgment mortgage".
The main amendment in this group dealing with judgment mortgages is amendment No. 62, which is intended to clarify the meaning of subsection (1) of section 116. The purpose is to clarify that a judgment mortgagee may seek a court order for sale or such other order for enforcement against the debtor's land as the court thinks appropriate. The amendments to sections 3 and 123 are consequential on the amendment to section 116. It is also proposed to replace the word "equity" with "right" in subsections (2) and (3) of section 116 to include legal rights as well as equitable rights.
Amendment agreed to.
Government amendment No. 5:
In page 16, line 26, after "means" to insert "the estate or interest which arises from".
This is a drafting amendment to clarify the definition of tenancy by inserting the term "the estate or interest which arises from".
Amendment agreed to.
Section 3, as amended, agreed to.
SECTION 4.
Amendment No. 6 not moved.
Question proposed: "That section 4 stand part of the Bill."
Had the amendment been moved I would have asked for it to be withdrawn. However, it is the intention of the Parliamentary Counsel to submit a Report Stage amendment along the same lines. If Senator Tuffy sees the record of the House she will know her amendment has had some effect.
Question put and agreed to.
Amendments Nos. 7 and 8 not moved.
Section 5 agreed to.
Sections 6 and 7 agreed to.
Amendment No. 9 not moved.
Section 8 agreed to.
Amendments Nos. 10 to 13, inclusive, not moved.
Section 9 agreed to.
Sections 10 and 11 agreed to.
SECTION 12.
Amendments Nos. 14 and 15 not moved.
Question proposed: "That section 12 stand part of the Bill."
The Department of Justice Equality and Law Reform is examining the question of reform in the area of property management companies and estate management charges and will address it in the context of the reforming legislation on auctioneers and estate agents.
I welcome that. There is a need to address that area where there are anomalies. Some management companies exert influence beyond what was intended, sometimes to the detriment of the people who have purchased properties. When it is being examined there is a need to look at interim arrangements whereby the developer controls the management company until all the apartments in a development have been purchased, and sometimes beyond that. Service charges are often unrealistic and there are sometimes contingent liabilities to be made subsequently. I welcome the fact that the Minister is examining the issue as it warrants a degree of evaluation.
I also welcome the fact that the study is being carried out. The problem is in urgent need of attention. With the many apartment complexes being built in Dublin and throughout the country, these management companies and charges cause serious problems for those who buy apartments in those complexes. I appreciate that somebody has to maintain a block of apartments. They are different from housing estates in which each individual is obliged to maintain his or her own property while the council looks after the common areas. Apartment blocks need management companies to do that. My knowledge is of those in my area and the Dublin area where they cause serious problems. I do not know how the Minister will sort it out.
In recent years where, in many cases, investors have bought most of the apartments in a complex, the landlords are not paying the management fees. I would like the Minister to examine that. Paying the management fee is the obligation not of the tenant but the landlord. However in many cases the bill goes to the apartment and the tenant perhaps throws it in the bin and does not pass it on to the landlord. It is up to the landlord to ensure the management fee is paid. Many complexes in Dublin suffer because the fees are not being paid to the management company which gets into difficulty as a result. In some Dublin developments a number of management companies have gone out of business because they do not have the necessary funding. It is a complex and difficult situation and strict legislation needs to be brought in to ensure this area will be dealt with properly in the future. I welcome the fact that this study will be done and I urge that good, strong legislation be introduced to deal with the problem.
Question put and agreed to.
SECTION 13.
Amendments Nos. 16 and 17 are related and will be discussed together by agreement.
Government amendment No. 16:
In page 21, subsection (3), line 29, after "entitled" to insert "provided any protectorship has ended".
The purpose of amendment No. 16 is to ensure consistency between subsections (3) and (4) of section 13 by providing that the conversion of a fee tail into a fee simple will take place only when any protectorship has ended. This is intended to avoid interference with any existing interest in land.
Amendment agreed to.
Amendment No. 17 not moved.
Section 13, as amended, agreed to.
Sections 14 to 21, inclusive, agreed to.
SECTION 22.
Government Amendment No. 18:
In page 26, subsection (3), to delete lines 16 and 17 and substitute the following:
"(3) In considering an application undersubsection (1)(i) and (iii) the court shall have regard to the interest of the beneficiaries as a whole and, subject to these, to—”.
This amendment would make explicit provision in subsection (3) that the court must have overall regard to the interest of the beneficiaries as whole, when dealing with disputes concerning the trustees' performance of their functions as trustees or the other operation of the trust. The amendment also makes it clear that the court is not required to have regard to the matters set out in subsection (3) when considering a dispute concerning the nature or extent of any beneficial or any other interest in the land, as the matters in subsection (3) are not relevant to that type of dispute.
Amendment agreed to.
Section 22, as amended, agreed to.
Sections 23 to 27, inclusive, agreed to.
NEW SECTION.
Amendment No. 19 is in the name of Senator Cummins. Amendment Nos. 20 to 22, inclusive, are related. Therefore, amendments Nos. 19 to 22, inclusive, may be taken together by agreement.
I move amendment No. 19:
In page 27, before section 28, but in Part 6, to insert the following new section:
"28.—Where a co-ownership is to be established, it shall be established as a tenancy in common and no joint tenancy shall be created unless—
(a) it is the stated intention of all parties to the co-ownership to create a joint tenancy, and
(b) each party to the co-ownership has signed a declaration to the effect that he or she understands—
(i) the difference between a tenancy in common and a joint tenancy,
(ii) that the creation of a joint tenancy means that, upon his or her death, his or her interest in the land passes automatically to the surviving co-owners(s), and
(iii) that a joint tenancy cannot be severed other than in accordance with section 28.”.
I am standing in for Senator Cummins, who has put a good deal of work into this amendment, as indeed he has into all of those he has tabled. I shall endeavour to cover what he had prepared for it.
This amendment is an important one, and its function is to make tenancy in common the default status of co-ownership. People generally understand that if a person owns a share in a property, land or building, it will pass to his or her heirs on death. That is the situation where a tenancy in common is concerned, yet very often co-owners inadvertently create a joint tenancy, thereby denying their heirs any right of survivorship.
People should not be put in a situation where they may sleepwalk into a joint tenancy. The law on this issue at the moment is that in the absence of a specific instruction to the contrary a joint tenancy is assumed. Undoubtedly there are circumstances where a joint tenancy is exactly what is required. Certainly we see entirely intentional joint tenancy in marriage, between business partners etc. The concept of a joint tenancy is important for such circumstances and the obvious flipside is that in the event of the death of a tenant in common, his or her heirs could sell the inherited interest in the property from under the other co-owners without any consideration for their concerns.
However, many people will be unaware of the consequences of the establishment of a joint tenancy, and it should be made very clear to them beforehand. I would urge the Minister to accept this amendment for the three following reasons. Many joint tenancies are unintentionally created by buyers and they are unaware of the consequences of their actions in this respect. This amendment would not make the creation of a joint tenancy any more difficult, but it would ensure informed decisions by buyers.
Joint tenancy is a common law doctrine and therefore unfamiliar to most jurisdictions. With the increase in population in Ireland, particularly from other EU countries, the majority of which operate a civil law system that would not allow a joint tenancy to exist, it would be prudent to accept this amendment to ensure that buyers are fully aware of the pitfalls of the type of co-ownership they create. While ignorance is never a defence, it is surely worthwhile guaranteeing that all buyers are equally informed at the time of purchase.
With the increased measures laid out in section 28, it would be all the more difficult for joint tenants to sever a joint tenancy or convert it to a tenancy in common. This should be accompanied by increased safeguards against purchasers making decisions on the basis of misinformation or misconception. I should welcome the Minister's response to the proposed amendment.
I am supportive of the sentiments expressed by Senator Terry. I have come across instances where people have inadvertently gone the route of joint tenancy without realising that their successors in title will not be beneficiaries of the land and that it will accrue to the party that lives longest. Something needs to be put in place. In many instances, a good solicitor will explain the implications fairly thoroughly to his or her client and the difference between tenancy in common and joint tenancy. However, there may be instances where it is perhaps overlooked or of malfeasance and therefore it does not happen.
The Minister will, no doubt, comment on the merits of the amendment, but there is a need for a degree of certainty in this area. The point made by Senator Terry is correct, given the number of immigrants we have who will be totally unfamiliar, as are many Irish people, with the joint tenancy implications. There is a need, perhaps, to have them redesignated so that their meaning is clearer. There might be another way of doing it, but there is need to do something further in the Bill to provide for this area. I urge the Minister to try to come up with something that will satisfy the concerns expressed.
My only concern as regards amendment No. 19, as it stands, is about the fact that I believe the majority of people who opt to buy property in co-ownership intend that there will be joint tenancy. The effect could be that people might presume they were going to inherit a property when a partner in the property dies. It means that surviving spouses, for example, might be left in a vulnerable position because they might not be aware of the ramifications and suddenly find that it was not a joint tenancy, despite their having previously thought it was. It is a matter of changing from one common predominator to another.
In general up to this, when people have bought property they intended it to be in joint tenancy. The advantage of having a joint tenancy is that the other half of the property does not go into the estate of a person on his or her death. It is automatically transferred to the surviving partner. If it went into the estate, there are all the probate costs to be considered. It would mean that probate would have to be granted before a surviving partner could get his or entitlement for the part of the estate held by the person who died as a tenant in common.
It is very interesting to listen to the two arguments, both of which are persuasive, in one sense. If one is to have a default or presumptive mode in the joint purchase of property, there will be consequences, no matter how one looks at it. As Senator Tuffy says, there are major advantages in a joint tenancy from the viewpoint of neatness. If a joint owner dies, the other joint owner could be completely frozen, while some type of dispute goes on over whether he or she died intestate, or a dispute arises with a spouse over the legal rights, etc. All kinds of features can arise which have the effect of immobilising property.
On the other hand, as Senator Jim Walsh has said, not merely do most immigrants not know the law, most Irish people do not know it either. If one were to ask people in the street the difference between a tenancy in common and a joint tenancy, one could be locked up.
We have a problem here. I will examine Senator Cummins's amendment for the reasons outlined by Senator Terry. I will consider whether the issues raised by Senator Tuffy outweigh those in the amendment set down by Senator Cummins. We may be in danger of substituting one set of problems for another. The traditional presumption may be as good as the new presumption. I am agnostic on the matter but Senator Tuffy's argument is quite convincing.
Senator Tuffy and the Minister are members of the legal profession and understand the point. I do not seek to delete the provision of joint tenancy but those who enter into a joint tenancy must clearly understand the difference between it and a tenancy in common and the implications for family members. We must deal with it in a way that ensures clear understanding without affecting the benefits of joint tenancy for owning property. That is the challenge for the Minister.
I thank the Minister for examining this matter again, particularly in light of a changing Ireland with many people moving here from Europe and buying property. Irish residents must also know the difference between the two tenancies and this should be pointed out to them. I welcome the Minister's response. I will resubmit this amendment on Report Stage.
Amendment, by leave, withdrawn.
SECTION 28.
Government amendment No. 20:
In page 28, subsection (2), line 1, after "the" to insert "prior".
Amendment agreed to.
Section 28, as amended, agreed to.
SECTION 29.
Government amendment No. 21:
In page 28, subsection (2), between lines 21 and 22, to insert the following:
"(d) an order dispensing with consent to severance of a joint tenancy as required by section 28 where such consent is being unreasonably withheld,”.
Amendment agreed to.
Government amendment No. 22:
In page 29, between lines 12 and 13, to insert the following subsection:
"(6) The equitable jurisdiction of the court to make an order for partition of land which is co-owned whether at law or in equity is abolished.".
Amendment agreed to.
Section 29, as amended, agreed to.
Sections 30 to 32, inclusive, agreed.
SECTION 33.
I move amendment No. 23:
In page 30, subsection (1), line 21, to delete "only on registration of a court order" and substitute "on registration of a court order or otherwise".
The requirement in section 33 that an easement or profits à prendre should be required at law by prescription only on registration of a court order would appear to be unduly onerous. I am not sure how good is my pronunciation of French. Surely a deed can be created to acknowledge such a right without the necessity of a court order.
There is a contradiction in section 38(2) which states: "A conveyance of land creates for the benefit of that land any easement or profits à prendre over the land retained by the grantor which it is reasonable to assume, in the circumstances of the case, was, or would have been if they had adverted to the matter, within the contemplation of the parties at the date of the conveyance as being included in it.” It is assumed that, had the matter been discussed at the time of the agreement, it would have been accepted that the easement or profits à prendre formed part of the conveyance. The rule in Wheeldon v. Burrows is to be abolished. No court order appears to be necessary in respect of section 38 and this appears to contradict section 33.
I can reassure the House that when using Norman French legal terms one can pronounce them as if they were bog standard English words. Everybody can pronounce them in any way he or she wishes and knowing the French pronunciation is not necessary.
I do not propose to accept the amendment tabled by Senator Cummins. Introducing the words suggested, "or otherwise", without any definition of what that means would render the section vague and uncertain. The provisions in section 33, which replace the provisions in the Prescription Acts, are based on detailed Law Reform Commission recommendations in 2002 set out in its report on the acquisition of easements and profits à prendre by prescription.
Before a right over the land of another person is considered an easement there must be a dominant and servient tenement. In other words, a right is an easement only if there is a property in whose favour the right is created and a property subject to it. The servient tenement is the land over which the easement is exercisable while the dominant tenement is the land, owned and occupied by another person, that benefits from the easement to which it is attached. When the land is transferred, the easement is included in the transfer to the new owner. Examples of easements include drainage pipes and overhead cables, rights of support and rights of access to the dominant land. A right of way must be in favour of land in order to be an easement. If, for example, someone includes in a land document the right for me to walk up and down the garden, this is a licence rather than an easement because it is not in favour of some other land. The most usual and straightforward way of creating an easement is an express grant. That happens when a grantor sells land and gives the grantee an easement over that land, such as a right of way.
On the other hand, an easement can be reserved for a person who sells land but retains an easement for the benefit of the land retained, such as a shortcut across a field. In such circumstances, an implied easement may arise in the case of access to a landlocked parcel of land or mutual support between two houses. If one sells land and retains a landlocked portion in the middle the courts will infer an easement of access to the land and a right of way to it on the basis that no one should make one's land inaccessible. Likewise, if two houses are in a terrace, even if there is no express grant of a right of support easement, the courts will infer such an easement. If one buys a house in a terrace, it is assumed that one of the property owners is not in a position to tear down his house and cause the other house to collapse.
Easements can be also acquired by prescription under the old statutes, the Prescription Acts, to which I have referred. Where previous owners have, over a long period, continuously acted as if they were entitled to the easement, the court may recognise that a person has acquired an easement over the servient land by prescription. Section 33 clarifies and simplifies the existing law by providing that legal title to an easement or profit by prescription may be obtained by a claimant only on the basis of a court order that is registered in the Land Registry or the Registry of Deeds. Section 69 of the Registration of Title Act provides for the registration of easements and profits created by express grant or reservation after first reservation or by court order.
The words "or otherwise" that Senator Cummins proposes to add do not make the meaning clear. I am unhappy that some meaning would be attached to them but I will consider the amendment before Report Stage to see if there is any merit in introducing it.
Amendment, by leave, withdrawn.
Section 33 agreed to.
Sections 34 to 37, inclusive, agreed to.
NEW SECTION.
Government amendment No. 24:
In page 31, before section 38, to insert the following new section:
"38 —(1) The rule known as the Rule inWheeldon v Burrows is abolished and replaced by subsection (2).
(2) Where the owner of land disposes of part of it or all of it in parts, the disposition creates by way of implication for the benefit of any part disposed of any easement over the part retained, or other part or parts simultaneously disposed of, by the grantor which—
(a) is necessary to the reasonable enjoyment of the part disposed of,
(b) was reasonable for the parties, or would have been if they had adverted to the matter, to assume at the date the disposition took effect as being included in it.
(3) This section does not otherwise affect—
(a) easements arising by implication as easements of necessity or in order to give effect to the common intention of the parties to the disposition,
(b) the operation of the doctrine of non-derogation from grant.”.
This amendment is intended to improve the presentation of section 38 in dealing with the implied grants of easements and to clarify that the section does not affect easements of necessity or affect the doctrine of non-derogation of grant.
Amendment agreed to.
Section 38 deleted.
Sections 39 to 41, inclusive, agreed to.
SECTION 42.
Amendments Nos. 25, 38 and 49 are related and will be taken together by agreement.
Government amendment No. 25:
In page 34, subsection (4), lines 12 to 19, to delete paragraph (a) and substitute the following:
"(a) a building owner fails within a reasonable time to—
(i) make good damage, or to reimburse the costs and expenses, undersubsection (2)(a), or
(ii) pay reasonable costs or compensation undersubsection (2)(b), the adjoining owner may recover such costs and expenses or compensation as a simple contract debt in a court of competent jurisdiction,”.
These are purely drafting amendments to correct the indentations of the text in the Bill.
Amendment agreed to.
Section 42, as amended, agreed to.
SECTION 43.
I move amendment No. 26:
In page 34, to delete lines 24 to 26 and substitute the following:
"43.—(1) Where a building owner and an adjoining owner are in dispute in relation to the exercise or proposed exercise of rights under section 42, either party may apply to the court in a summary manner and the court may give such directions as it thinks fit, and may in particular make an order authorising the carrying out of specified".
We have proposed this amendment because we believe the section as it stands gives the advantage to the builder. The person who objects to the building is not given any right to go to the court to determine the matter. Our amendment allows both sides to go to court.
The person who is not the building or moving party would not normally want to go to court because he or she need only object. I do not see why the right of initiative is being conferred on somebody who does not propose to carry out the building. One does not want to be in the position of discussing work with another who goes to court to stop one, when one did not have the right to do the work without his or her consent and has not applied to court for permission to do it. Effectively, the person whose consent is required could take the initiative and go to court thereby involving the other party in costs when the other party might not be disposed to go ahead with the building works. I am not clear what useful purpose this amendment would serve and the more I talk about it the clearer I am that it would serve very little purpose.
Amendment, by leave, withdrawn.
Section 43 agreed to.
Sections 44 and 45 agreed to.
NEW SECTION.
I move amendment No. 27:
"46.—In page 35, before section 46, but in Chapter 3, to insert the following new section:
Where a person complains that trees or hedges grown or maintained by a neighbouring owner are of such a height as to constitute an unreasonable interference with any easement enjoyed by the complaining owner, or unreasonably interfere with light whether or not an easement exists in that regard, the person may apply to the court which may make such order, including an order directing the neighbouring owner to remove or reduce the height of any trees or hedges.".
We have tabled this amendment after consulting legislation in the United Kingdom to control the problem of high hedges or trees. I have encountered this issue in my role as a public representative, as I am sure has the Minister. A person who raises this issue with a neighbour or the local authority must depend on the neighbour's good will. While court should be a place of last resort if the complainant has the possibility of going to court, as in other cases of nuisance, that can pressurise the neighbour into resolving the issue.
We are trying to find a way to give a person in this situation the legal ground to ask his or her neighbour to deal with the problem. Elderly people have often raised this issue with me because they are not able to persuade their neighbours to do something about a situation that causes hardship to those elderly people. What does the Minister think of our proposal?
I appreciate the problem raised here. The cupressus leylandii used in suburbia can create mayhem for an adjoining owner. The law is unsatisfactory because one does not have the right to instruct another to keep a leylandii hedge to a reasonable height. I am sympathetic to the purpose of this amendment which is designed to give a real remedy to a person in that position. This, however, is not the correct Bill in which to deal with this issue.
The phrase "grown or maintained" in the text of the amendment could give rise to terrible disputes. For example, if there is a 100 foot high beech tree growing on a person's land people could say they are afraid it will fall on their houses or that it interferes with their view. The real issue is to find a legislative vehicle to deal properly with the problem Senator Tuffy has raised. It would be better to enter this provision in some planning Bill than in the Land Law and Conveyancing Act. Many issues arise, because apart from the cypress hedge it applies to fully grown trees. I suggest therefore that the Oireachtas examine this genuine issue in some other context.
I, too, have sympathy with the proposal in the amendment and appreciate the Minister's response. This is a serious problem for people in suburban areas where leylandii or other trees grow to 30 or 40 feet and block sunlight from adjoining houses or cause problems with boundary walls and grass which will not grow within a few yards of leylandii. When neighbours cannot come together to reach agreement on what should be done the law should be available as a last resort for them. This legislation is not the correct context for such a provision. The Minister stated it could be provided for in planning legislation. Will he suggest it to the Minister for the Environment, Heritage and Local Government? All public representatives have had to deal with such cases. I have sympathy with the thrust of the amendment.
I appreciate the support of the Minister and Senator Terry for the thrust of the amendment. The UK system to which I referred comes under environmental legislation and it probably would be the right context for this amendment. A clause should be inserted requiring some attempt at alternative dispute resolution to have been made before parties go to court. A formal system of arbitration for the cases I described must be put in place. It could also include noise and nuisance regulations. The courts are not the place for these cases to be resolved. Some formal structure needs to be put in place that puts pressure on the other person to negotiate.
I will communicate with the Minister for the Environment, Heritage and Local Government on this issue. It deserves legislative treatment. I agree with Senator Tuffy that a quick and simple solution rather than a court case is desirable. One does not need solicitors and barristers arguing about the height of bushes in people's gardens if it can be avoided. I am not saying there is anything wrong with solicitors or barristers but ordinary people cannot afford any more to go to court for relatively minor issues such as this. Some system of arbitration by a local authority may offer the best system. At least a local authority has a grasp of planning laws and the like. Giving the right in this legislation would only clog up the courts with arguments about the heights of bushes. The matter requires more reflection.
Amendment, by leave, withdrawn.
Sections 46 to 51, inclusive, agreed to.
SECTION 52.
Amendments Nos. 28 and 29 are cognate and will be discussed together.
I move amendment No. 28:
In page 37, line 34, to delete "if it thinks fit" and substitute "where it is just and equitable to do so".
Section 52 gives much power to the discretion of the court and enables different judges to take different attitudes to similar circumstances. The proposed wording of amendment No. 28 will help to create binding precedent in common law. The proposed wording of amendment No. 29, "as is just and equitable", would also create some certainty in future decisions.
I am glad to accept amendment No. 28 and the thrust of amendment No. 29. Will Senator Terry alter the wording of amendment No. 29 to substitute the words "as it appears to it to be just and equitable" and table it on Report Stage?
Would such a wording leave the provision vague?
The Parliamentary Counsel informed me the wording would be better if it read, "On such an application the court may make such order, including an order as to costs, as it appears to it to be just equitable." I will get my officials to put it in written form and send it to the Senators.
I will consider tabling a differently worded amendment on Report Stage.
Amendment agreed to.
Section 52, as amended, agreed to.
Amendment No. 29 not moved.
Section 53 agreed to.
Sections 54 and 55 agreed to.
SECTION 56.
I move amendment No. 30:
In page 39, subsection (1), lines 5 to 9, to delete paragraph (a).
Section 56(1)(a) states a purchaser of land is not entitled to require the production of an instrument dated or made before the period prescribed by section 54, that is, 20 years. It is necessary when in assignments of leases made 20 or more years ago to see the actual lease or other subdivisions of the property rights of way created by previous deeds. I do not see the merit of this paragraph.
Section 3 of the Conveyancing Act 1881 provides, subject to certain exceptions, that a purchaser is precluded from acquiring productions of any title documents stated or made before the time prescribed by law or stipulated in the contract for the commencement of the title or from making requisitions, objections or inquiry as to such prior title. The Law Society of Ireland's standard contract for sale contains provisions of a similar nature. These provisions are intended to facilitate effective conveyancing of land while at the same time protecting the interests of purchasers. I am not aware of any concerns on the part of the Law Society of Ireland on section 56(1). It simply restates the law in accordance with modern practice. If there is an issue I will examine it between now and Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 31, 32, 53 to 57, inclusive, 60 and 78 to 80, inclusive, are cognate and will be discussed together.
Government amendment No. 31:
In page 39, subsection (2)(b), line 29, to delete “property” and substitute “land”.
These amendments are to clarify that the provisions in question apply only to land and not to property as the latter term can include personal property.
Amendment agreed to.
Government amendment No. 32:
In page 39, subsection (2)(c), line 33, to delete “property” and substitute “land”.
Amendment agreed to.
Amendments Nos. 33, 34, 43 and 61 are cognate and may be discussed together by agreement.
Government amendment No. 33:
In page 40, subsection (7)(b)(i), line 24, to delete “subsists” and substitute “exists”.
These are minor drafting amendments involving the substitution of "exists" for "subsists" and "existing" for "substituting". The purpose of these amendments is to simplify the text with the use of more modern and commonly used English.
Amendment agreed to.
Government amendment No. 34:
In page 40, subsection (7)(b)(ii), line 26, to delete “a subsisting” and substitute “an existing”.
Amendment agreed to.
Section 56, as amended, agreed to.
Sections 57 to 59, inclusive, agreed to.
SECTION 60.
Government amendment No. 35:
In page 42, subsection (3), line 10, to delete "trust" and substitute "use".
Subsection (3) is intended to remove the existing need in a voluntary conveyance to use the words "onto and to the use of the grantee" in order to avoid the creation of a resulting use in favour of the grantor. It is a convention of current law that one must convey land onto and to the use of the grantee; otherwise, the law presumes there is a resulting use, which is a similar concept to a trust in favour of the person conveying the land. The amendment makes the intention of subsection (3) clearer than it was in the original text.
Amendment agreed to.
Section 60, as amended, agreed to.
Section 61 agreed to.
SECTION 62.
Government amendment No. 36:
In page 43, subsection (2)(b), to delete lines 2 to 10 and substitute the following:
"(i) if made by an individual—
(I) it is signed by the individual in the presence of a witness who attests the signature, or
(II) it is signed by a person at the individual's direction given in the presence of a witness who attests the signature, or
(III) the individual's signature is acknowledged by him or her in the presence of a witness who attests the signature, or
(IV) it is signed and sealed by the individual;".
This is another tactical amendment which is designed to clarify the meaning of subsection (2)(b)(i)(III). The amendment makes it clear that the intention of the provision is to refer to a prior signature being acknowledged rather than to the deed itself being acknowledged.
Subsection (2)(b)(i)(IV) provides that a deed is correctly executed if it is “signed and sealed by the individual”. Is it a requirement that such a deed should be witnessed? Will the Minister explain what is required to make the deed “sealed”?
My understanding of current conveyancing law is that the witness does not have to be in the presence of the signatory to validate the deed. Will the Minister clarify whether this is the case? The function of the witness is to endorse the individual's signature, but I understand that endorsement was not required to be made in the latter's presence. However, subsections (2)(b)(i)(I), (2)(b)(i)(II) and (2)(b)(i)(III) specify “in the presence of a witness”. Are we introducing a new requirement into conveyancing law with these provisions?
The purpose of having a witness sign the deed is to ensure the signatory cannot subsequently claim it is not his or her signature. The witness's role is to validate. Subsections (2)(b)(i)(I), (2)(b)(i)(II) and (2)(b)(i)(III) make reference to “in the presence of a witness”. Subsection (2)(b)(i)(IV), however, refers to “signed and sealed by the individual”. I am unsure in what circumstances an individual would have a seal, which is usually associated with corporate entities. If a seal is used, however, I assume it is tantamount to the witnessing of the signature. If the seal of an individual is also endorsed on the document, it would be difficult for him or her subsequently to disown the signature. Will the Minister clarify this provision?
Like Senator Jim Walsh, I ask the Minister to explain what a seal involves. On my previous question, I see that subsection (2)(b)(i)(III) provides that the individual may acknowledge the signature in the presence of the witness, which implies that the latter need not be present when the signature is made. However, I am still unsure of what exactly is involved here. I recall checking the definition of “witness” and my understanding is that the witness must validate the signature but that this validation is not necessary to be done in the signatory’s presence.
According to custom and practice in conveyancing, deeds are generally said to be signed, sealed and delivered in the presence of the individual concerned. I would have thought, however, that a deed signed by an individual and subsequently validated by a witness would be valid regardless of whether the individual was present when the validation was made. Are we making existing law more strict in this regard? I am sure it sometimes happens that witnesses sign deeds at a later time than they were signed by the individual concerned in circumstances where the former may or may not have seen the signature being made but is certain it is valid. I understood such a procedure would be valid so long as the witness understands the seriousness of what he or she is doing.
Section 62 is intended to modify substantially the formalities for the correct execution of deeds. Subsection (1) abolishes the need for a seal in the case of execution by an individual, but a seal will remain necessary for corporations. It also abolishes the rule that authority given to another person to deliver a deed must itself be given by deed. This has already been done in regard to powers of attorney under section 15 of the 1996 Act.
Subsection (2) sets out the new requirements for deeds following the abolition of the need for sealing by individuals. Subsection (2)(a) provides for identification of a document as a deed by giving it an appropriate heading or otherwise making it clear on its face that it is intended to be a deed, or by expressing it to be executed or signed as a deed. This is one of the aspects of the new arrangements to differentiate between a deed and a letter of intent or similar.
Paragraph (b) sets out the different methods of execution depending on the status of the person or body executing the deed. Subparagraph (i) makes it clear that while individuals are no longer required to use a seal, it remains open to them to do so if they wish. Subparagraphs (ii) and (iii) preserve the existing law relating to corporations.
The Senators asked what is involved in a seal and whether, under these provisions, a deed that is signed and sealed by the individual must also be witnessed. This is a good question and I do not have an immediate answer. I will consult the expert group on this because I do not want to mislead the House.
Senator Tuffy asked about the meaning of subparagraph (i)(III), which specifies that the deed can be "acknowledged by the individual in the presence of a witness who attests the signature". Is the Senator asking whether it is necessary for the witness to be present when the signature is made or whether one can witness a deed without seeing it being signed?
Yes. My question goes further, however, in that I wish to know whether it is even necessary for the individual to be present when the witness endorses the signature. The definition of the word "witness" implies that a witness may endorse a person's signature without necessarily being in the presence of the signatory when the endorsement is made. Has it always been a requirement of land law that one must be in the presence of the person whose signature one is witnessing? That seems to be the requirement in subsections (1), (2) and (3) in that the witnesses and the person signing must both be present. I know that is the practice and is the way the deed is set out. If the deed simply said it must be signed by X and witnessed by Y, the witness would not necessarily need to be present at the same time as the person signing. However, I believe that is the requirement in this section. Is this taking it a bit further than was the case before? Is that a good idea?
I do not know. I would say Senator Tuffy has seen the execution of many more documents than I have in my time because barristers rarely see them executed. I always thought witnessing a signature meant being physically present when the signature was carried out rather than coming in afterwards and somehow countersigning it at a later point. I may be wrong on that and I do not want to embarrass anybody but I do not believe one would be a witness if one did not actually witness the signature. For instance, in the case of a will, if one did not see it being signed, I do not believe one would be a witness to it. I could, however, be wrong on that and there could be some——
I always thought the will was a lot stricter in terms of requirements. One can challenge a will and state the witness was not present at the time and it was not executed properly. Are we now bringing that element to deeds of conveyancing? We are making it a lot stricter than was the case and that could lead to problems.
I may be very old fashioned but I always imagined witnessing a signature was the same for a will as for a deed and that one could not witness it if one did not see it happen.
In corporations, the normal phraseology is "signed and sealed in the presence of". That is clear English. I agree there is probably a practice where a person may sign the deeds, contract or whatever at home and post them back to the solicitor who will know the signature and will get somebody to sign as witness. That is short-circuiting. If there were a problem subsequently and somebody claimed it was not his or her signature, there would be a real issue about the fact the person did not witness it. Any deviation from the requirement that one must be present and see the signature being made if one witnesses a signature could cause legal problems down the line.
I appreciate the seriousness of signing a conveyancing deed. I always understood that two people had to be present to witness the making of a will and that there were strict rules surrounding an affidavit. Senator Jim Walsh is right and let us call a spade a spade. There is possibly a practice where a person signs deeds and the solicitor, who is not in the office at the time, witnesses it afterwards knowing it is that person's signature. Obviously, it is very different from a will because there are issues of affidavits with a will. It is quite serious if someone makes a will but a witness states he or she was not present at the time of the signing of the will and that he or she came in afterwards. That would be a major issue. In practice, a conveyancing deed was seen as slightly different and I am concerned. If this provision brings a stricter element into the situation, it is important solicitors are aware of it.
I am not saying this to embarrass anybody but I would have thought that if one sent a deed to one's client at home, asked him or her to sign it, return it to one's office and one signed the witness part one's self, technically speaking, one has not witnessed the signature. As Senator Jim Walsh said, it is a shortcut and in certain circumstances, one could end up in the soup. I may be wrong on that but I believe the term "witnessing a signature" has the same meaning in conveyancing as it does in a testamentary context. I am not conscious that I am making the law stricter but if my understanding is correct, what is in the text confirms it. If the Senator's understanding is correct, it is making the law stricter but I do not believe she is correct.
Amendment agreed to.
Section 62, as amended, agreed to.
Sections 63 and 64 agreed to.
SECTION 65.
Government amendment No. 37:
In page 44, subsection (1), line 9, to delete "is expressed" and substitute "appears".
Section 65 abolishes the needs for words of limitation in conveyances of unregistered land. This is a drafting amendment to bring the wording of section 65 into line with section 123 of the Registry of Deeds Act 1964 which abolished the need for words of limitation for transfers of registered land. Section 65(4) aims to cure defects in conveyances executed before this Bill comes into operation, so it will have retrospective effect. An issue has been raised about its scope and I have been asked that it be looked at again. I may, therefore, have to bring forward an amendment at a later stage but that is the state of play at present.
Amendment agreed to.
Section 65, as amended, agreed to.
Sections 66 to 77, inclusive, agreed to.
SECTION 78.
Government amendment No. 38:
In page 50, subsection (5), lines 44 and 45 and in page 51, lines 1 to 5, to delete paragraph (b) and substitute the following:
"(b) extended by providing expressly in the conveyance that—
(i) the land conveyed, or
(ii) the part of the land which remains vested in the covenantor,
stands charged with the payment of all money which would otherwise become payable under the implied covenant.".
Amendment agreed to.
Section 78, as amended, agreed to.
Sections 79 to 84, inclusive, agreed to.
SECTION 85.
I move amendment No. 39:
In page 54, paragraph (a), line 4, before "conditions" to insert "general".
I accept the amendment.
Amendment agreed to.
Section 85, as amended, agreed to.
SECTION 86.
Government amendment No. 40:
In page 54, lines 11 to 27, to delete subsections (1) to (3) and substitute the following:
"86.—(1) A legal mortgage of land may only be created by a charge by deed and such a charge, unless the context requires otherwise, is referred to in this Part as a "mortgage"; and "mortgagor" and "mortgagee" shall be read accordingly.
(2) From the commencement of this Chapter, any—
(a) instrument purporting to convey a legal estate or interest in land by way of mortgage, or
(b) other transaction which under any instrument or statutory provision would operate otherwise as a mortgage by conveyance of a legal estate or interest in land, operates as if it were a mortgage under this Part.
(3) From the commencement of this Chapter, any power, whenever created, to mortgage or lend money on mortgage of a legal estate or interest in land operates as a power to mortgage the legal estate or interest by a charge under this Part or to lend money on the security of such a charge.".
Amendment agreed to.
Section 86, as amended, agreed to.
SECTION 87.
Government amendment No. 41:
In page 54, subsection (1), line 39, to delete "charge by way of".
Amendment agreed to.
Government amendment No. 42:
In page 55, subsection (2), lines 10 and 11, to delete all words from and including "first" in line 10 down to and including "mortgage" in line 11 and substitute "first legal mortgagee".
Amendment agreed to.
Section 87, as amended, agreed to.
SECTION 88.
Government amendment No. 43:
In page 55, subsection (1), line 21, to delete "subsists" and substitute "exists".
Amendment agreed to.
Section 88, as amended, agreed to.
Sections 89 to 91, inclusive, agreed to.
SECTION 92.
Amendments Nos. 45 and 46 are related to amendment No. 44 and may be discussed together.
Government amendment No. 44:
In page 57, lines 1 to 11, to delete subsection (1) and substitute the following:
"92.—(1) Where—
(a) money advanced or owing under a mortgage, or any part of it, is expressed to be advanced by or owing to two or more persons out of money, or as money, belonging to them on a joint account, or
(b) such a mortgage is made to two or more persons jointly and not in shares, the mortgage debt, or other money or money’s worth for the time being due to those persons, shall, as between them and the mortgagor, be deemed to belong to them on a joint account.”.
These are purely drafting amendments intended to improve the text.
Amendment agreed to.
Government amendment No. 45:
In page 57, subsection (3), lines 18 and 19, to delete ", obligation or transfer".
Amendment agreed to.
Government amendment No. 46:
In page 57, between lines 19 and 20, to insert the following subsection:
"(4) In this section "mortgage" includes an obligation for payment of money and a transfer of a mortgage or of such an obligation; and "mortgagor" shall be read accordingly.".
Amendment agreed to.
Section 92, as amended, agreed to.
SECTION 93.
Government amendment No. 47:
In page 57, subsection (1)(a), line 24, after “mortgage” to insert “, legal or equitable,”.
This amendment to section 93 makes it clear that this section, which lays down general principles governing the exercise of a mortgagee's statutory powers and rights, is intended to apply to both legal and equitable mortgages. Moreover, an issue was raised recently in connection with the notice period in section 93(1)(c). I may wish to introduce an amendment in that regard on Report Stage.
Amendment agreed to.
Section 93, as amended, agreed to.
SECTION 94.
I move amendment No. 48:
In page 58, subsection (1), line 4, after "unless" to insert the following:
", not more than one year before such taking of possession,".
This amendment is designed to make clear that a bank or building society cannot take possession without a court order merely because it induced a homeowner to sign a consent when taking out a mortgage. The consent, to be valid, must be in contemplation of the specific taking of possession.
There may be another way to amend this section to try to deal with this issue. However, unless the mortgagor consents in writing to such a taking, if some kind of consent exists in the mortgage itself, this section as it stands could allow it to kick in.
I do not propose to accept the amendment because section 94(1) provides that a mortgagee shall not take possession of the mortgaged property without a court order, unless the consent of the mortgagor has been given. The amendment now seeks to impose a condition. Effectively, the consent would have to be given within the preceding year. This would mean the mortgagee — the building society — would be required to update each mortgagor's consent every year or, failing that, to go to court in all cases that would arise. This would create either additional administrative costs for mortgagees or additional court-related costs. This would not be in the public interest.
I can see the Senator's point. She is suggesting that early in the life of a mortgage, general consent seems to recede into the background of everyone's memory as time passes. However, she is really suggesting that non-court based possession would become very difficult, if not impossible in most cases. The law should be left as it is.
While I appreciate the Minister's comments, will he examine this issue? The consent that is given in writing should relate to the specific taking of possession as covered by section 94. Can this consent be more tightly linked to the actual provisions of the section?
I will examine the matter between now and Report Stage. However, the Senator is really suggesting that if one did execute a consent, it must be renewed annually to have any real effect. I would be loath to agree to such a proposition without careful consideration. However, I will consider it between now and Report Stage.
Amendment, by leave, withdrawn.
Government amendment No. 49:
In page 58, subsection (3), lines 15 to 22, to delete paragraph (b) and substitute the following:
"(b) on making an order for possession, or at any time before the enforcement of such an order,
(i) stay the enforcement, or
(ii) postpone the date for delivery of possession, or
(iii) suspend the order, for such period or periods as it thinks reasonable and, if an order is suspended, the court may subsequently revive it.".
Amendment agreed to.
Question proposed: "That section 94, as amended, stand part of the Bill."
When taking possession of a property as a result of a failure on the part of the mortgagee to meet the mortgage, I cannot discern the presence of an obligation on mortgagors to maximise the value of properties. Often, their sole interest is to recover the mortgage. However, there may be a residual value in excess of the mortgage that should accrue to the defaulting mortgagee in such circumstances. I do not see such an obligation in the section although there should be one somewhere in law.
I agree with the general proposition advanced by Senator Jim Walsh that one should not have a situation in which one can simply realise one's interest in a property and effectively throw the property to the wolves without securing anything for others who might still have a residual interest in it.
However, section 99 provides that:
In the exercise of the power of sale conferred by this Chapter or any express power of sale, the mortgagee, or any receiver or other person acting on behalf of the mortgagee, shall, notwithstanding any stipulation to the contrary in the mortgage, ensure as far as is reasonably practicable that the mortgaged property is sold at the best price reasonably obtainable.
This is probably as far as one can go down that route.
Question put and agreed to.
SECTION 95.
Amendments Nos. 50 to 52, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 50:
In page 58, subsection (1)(a), line 36, after “property,” to insert “and”.
Amendment No. 50 is a drafting amendment that inserts the word "and" between subsections (1)(a) and (1)(b) to make it clear that both are required. As I cannot discern any other intention in the section, this is basically a drafting amendment to make the wording absolutely clear.
Amendment No. 51 has been tabled because I wished to make it clear that the application may be immediate and without notice. As for amendment No. 52, in certain circumstances it may be quicker to make an application to the Circuit Court or High Court than to the District Court. Consequently, I propose the amendment of the section to allow for that flexibility.
I am happy to accept amendment No. 50. In respect of amendment No. 51, I have serious reservations about allowing ex parte applications. This section deals with cases in which the mortgagee has reasonable grounds for believing the mortgaged property has been abandoned. However, that may not be the case. Allowing an ex parte application could be open to abuse and would not be in the public interest.
As for the textual change proposed in amendment No. 52, my advice from the draftsman is not to accept it as it does not improve the text.
In respect of the wording of amendment No. 51, what if the situation was urgent? That is envisaged by the section. Should the Minister not allow ex parte proceedings on that basis?
I am concerned it might open the door to sharp practice and that people would end up getting possession and getting an order in circumstances in which an injustice would be done to a person who had an interest in the property.
Amendment agreed to.
Amendment Nos. 51 and 52 not moved.
Section 95, as amended, agreed to.
Sections 96 and 97 agreed to.
SECTION 98.
Government amendment No. 53:
In page 60, paragraph (c), line 21, to delete “property” and substitute “land”.
Amendment agreed to.
Government amendment No. 54:
In page 60, paragraph (d), line 27, to delete “property” and substitute “land”.
Amendment agreed to.
Government amendment No. 55:
In page 60, paragraph (d)(i), line 31, to delete “property” and substitute “land”.
Amendment agreed to.
Government amendment No. 56:
In page 60, paragraph (d)(ii), line 33, to delete “property” and substitute “land”.
Amendment agreed to.
Government amendment No. 57:
In page 60, paragraph (d)(ii), line 39, to delete “property” and substitute “land”.
Amendment agreed to.
Section 98, as amended, agreed to.
Sections 99 to 104, inclusive, agreed to.
SECTION 105.
Government amendment No. 58:
In page 64, lines 9 to 13, to delete subsection (2).
Subsection (1) of this section sets out the order in which a receiver of mortgaged property is required to apply income received in respect of the property. It is proposed to delete subsection (2), which would have given the mortgagee the power to vary the order of categories of payment and could have created a conflict with the receivership law as it gives too much flexibility to the mortgagee.
Amendment agreed to.
Section 105, as amended, agreed to.
Section 106 agreed to.
NEW SECTION.
Government amendment No. 59:
In page 64, before section 107, to insert the following new section:
"107.—(1) Where a mortgage is expressed to be created on any land for the purpose of securing future advances (whether with or without present advances), the mortgagee is entitled, in priority to any subsequent mortgage, to the payment of any sum due in respect of any such future advances, except any advances which may have been made after the date of, and with express notice in writing of, the subsequent mortgage.
(2) Insubsection (1) “future advances” includes sums from time to time due on a current account and all sums which by agreement or in the course of business between the parties are considered to be advances on the security of the charge.
(3) Save in regard to the making of such future advances the right to tack in any form is abolished, but without prejudice to any priority acquired by tacking before the commencement of this Chapter.
(4) This section—
(a) applies to mortgages made before or after the commencement of this Chapter,
(b) does not apply to registered land.”.
This amendment proposes to replace the text of section 107 in order to clarify and simplify the position relating to future advances on a mortgage and the priority of such advancesvis-à-vis other mortgages. It reflects the existing text of section 75 of the Registration of Title 1964, which it is now proposed to retain. Section 124 of the Bill, which would have amended section 75 of the 1964 Act, is now unnecessary and, therefore, I propose to delete it.
Amendment agreed to.
Section 107 deleted.
SECTION 108.
Government amendment No. 60:
In page 66, subsection (3)(d), line 1, to delete “property” and substitute “land”.
Amendment agreed to.
Section 108, as amended, agreed to.
Section 109 agreed to.
SECTION 110.
Government amendment No. 61:
In page 67, subsection (3)(a), line 2, to delete “subsisted” and substitute “existed”.
Amendment agreed to.
Section 110, as amended, agreed to.
Sections 111 and 112 agreed to.
SECTION 113.
Question proposed: "That section 113 be deleted."
It is proposed to move section 113 to a new Part 12 of the Bill, in conjunction with amendment No. 68.
Question put and agreed to.
Section 114 agreed to.
SECTION 115.
Question proposed: "That section 115 be deleted".
It is proposed to delete section 115 because the company law review group is dealing with the issue of registration of judgment mortgages against companies and provisions to deal with this issue will be included in the company law legislation which is being prepared in this Department.
Question put and agreed to.
SECTION 116.
Government amendment No. 62:
In page 68, lines 30 to 34, to delete subsection (1) and substitute the following:
"116.—(1) Registration of a judgment mortgage undersection 114 entitles the judgment mortgagee to seek an order for sale from the court and such other order for enforcement of the mortgage against the judgment debtor’s estate or interest in land as the court thinks appropriate.”.
Amendment agreed to.
Government amendment No. 63:
In page 68, subsection (2), line 35, to delete "equity" and substitute "right".
Amendment agreed to.
Government amendment No. 64:
In page 68, subsection (3), line 38, to delete "an equity" and substitute "a right".
Amendment agreed to.
Section 116, as amended, agreed to.
Section 117 agreed to.
SECTION 118.
Government amendment No. 65:
In page 69, to delete lines 12 to 14 and substitute the following:
""(3) In the case of a judgment mortgage, the right of action accrues from the date the judgment becomes enforceable and not the date on which it is registered as a mortgage.".".
This amendment is intended to bring section 118 of the Bill into line with section 47 of the Statute of Limitations Act 1957, which provides that for the purpose of the extension of the limitation period in certain circumstances, such as disability or fraud, the date of accrual of a right of action on a judgment mortgage is the date upon which the judgment became enforceable and not the date on which it was originally registered as a mortgage.
Amendment agreed to.
Section 118, as amended, agreed to.
SECTION 119.
Question proposed: "That section 119 be deleted."
It is proposed to transfer section 119 to a new Part 12, as set in amendment No. 69. As regards the substance of the section, the writ of fieri facias is an old common law remedy which allows the sheriff to seize the chattels of a debtor on foot of an execution order. Courts have held that chattels in this context include chattels real. Chattels real include leasehold property. A leasehold property is not realty. It is personality but it is called chattels real. Therefore, the sheriff can, on a fieri facias order, seize a leasehold itself.
For a reason which I will set out shortly, the remedy is rarely used today. I will set out the background to the inclusion of the proposed abolition of the sheriff's power to seize leasehold in section 119. In 1988, the Law Reform Commission published a report entitled Reported Debt Collection: (1) The Law Relating to Sheriffs. Chapter 8 of the report considered issues relating to sheriffs' powers to seize leasehold land. It argued that the advantage to creditors of infrequent use of this power was more than outweighed by the unnecessary inconvenience to purchasers of leasehold who must search in the sheriff's office for lodgements of an execution order. While the commission concluded that there was much to be said for abolishing the power or leaving judgment creditors with a more appropriate remedy of a judgment mortgage, it deferred making a definitive decision until it had considered the reform of the law relating to judgment mortgages.
In March 2004, a consultation paper on judgment mortgages was published. It recommended that the seizure of leasehold land by sheriffs as a means of enforcing debts be abolished. In October 2004, the Law Reform Commission published the consultation paper on reform and modernisation of land law and conveyancing law, which completed the first stage of the joint project between my Department and the commission to develop the legislation we are discussing today. It also recommended the abolition of sheriffs' powers to seize leasehold land and the implementation of reforms in respect of judgment mortgages. During the extensive consultation process which followed the October 2004 consultation paper, no submissions were received in respect of this recommendation with the result that the proposal to abolish leasehold seizure power was included in the draft land and conveyancing Bill set out in the Law Reform Commission report which was published in July 2005.
This Bill is based on the draft Bill contained in the 2005 report. As regards the substance of objections to the abolition of the power of seizure, it appears that the threat of seizure may be a useful instrument for enforcing debts against land only in certain circumstances. However, as already stated in the Law Reform Commission's 1988 report, any seizure would encounter the difficulties to which I referred in that report. These difficulties include the fact that seizure does not vest legal ownership in the sheriff and the fact that in the case of unregistered land, the sheriff has no means of ascertaining the title. Indeed, it has been stated that a sale under a fieri facias order is notice to buyers that the sheriff has no knowledge of the title and buyers and that buyers would consequently buy at their own peril, which would make it a virtually unmarketable title. The sheriff is not entitled to vacant possession of the property and any purchaser would have to seek ejectment of the tenant. Moreover, any attempt to gain possession by any other means would constitute forcible entry.
In short, the law relating to seizures of leasehold is unsatisfactory and ineffective. The alternative method of enforcing debts is by means of a judgment mortgage. I accept that the existing law and procedures whereby the Revenue Commissioners or any other plaintiff could seek a judgment mortgage on a debtor's land is cumbersome and fraught with difficulties. This is the reason Part 10 simplifies and clarifies the law relating to judgment mortgages. For these reasons, I suggest that Senator Cummins gives further consideration to the reforms set out in Part 10 of the Bill as a more effective method than retaining the power of seizure under the fieri facias order.
I thank the Minister for his reply. Does the correspondence received by Senator Cummins from the Dublin City Sheriff on behalf of all the sheriffs in the country suggest that they would be happy with what the Minister has outlined here today? Senator Cummins received a very lengthy piece of correspondence which was probably received by the Minister or his officials. In it, they outlined the many reasons they wished to see section 119 of the Bill deleted. Can I take it what the Minister has outlined is in line with what the sheriffs are seeking?
The sheriffs wrote to the Revenue Commissioners and the Department which then offered to discuss the matter with the Revenue Commissioners. As I understand it, those discussions have not taken place. If anyone wants a bilateral or trilateral discussion between now and Report Stage, we will be more than happy to engage in those discussions.
Question put and agreed to.
Section 120 agreed to.
SECTION 121.
Government amendment No. 66:
In page 69, line 31, to delete "charge by way of legal mortgage within the meaning ofPART 9” and substitute “legal mortgage under Part 9”.
Amendment agreed to.
Section 121, as amended, agreed to.
Section 122 agreed to.
SECTION 123.
Government amendment No. 67:
In page 70, line 13, to delete "the creditor has the obligations, powers and rights specified" and substitute "with the effect stated".
Amendment agreed to.
Section 123, as amended, agreed to.
SECTION 124.
Question proposed: "That section 124 be deleted."
This section is no longer necessary as a result of the amendment of section 107 by amendment No. 59.
Question put and agreed to.
NEW SECTIONS.
Government amendment No. 68:
In page 70, before Schedule 1, to insert the following new section:
"PART 12
MISCELLANEOUS
125.—Alis pendens does not bind a purchaser of land for valuable consideration, without actual knowledge of it, unless it is registered in the prescribed manner in the Judgments Office within 5 years before the making of the conveyance to the purchaser.”.
This amendment involves the insertion of the existing section 113 into Part 12 to improve the presentation of the Bill.
Amendment agreed to.
Government amendment No. 69:
In page 70, before Schedule 1, to insert the following new section:
"126 —The power of the sheriff, or of other persons entitled to exercise the sheriff's powers, to seize a tenancy under a writ offieri facias or other process of execution is abolished.”.
This amendment also involves the insertion of the existing section 119 into the new Part 12 to improve presentation.
Amendment agreed to.
NEW SCHEDULE.
Amendment No. 70 is a Government amendment and acceptance of it involves the deletion of Schedule 1 of the Bill.
Government amendment No. 70:
In page 70, before Schedule 1, to insert the following new Schedule:
|
Enactment |
Provision |
Nature of amendment |
|
(1) |
(2) |
(3) |
|
Trustee Act 1893 |
Section 15 |
The substitution of “ sections 55 and 56 of the Land and Conveyancing Law Reform Act 2006“ for “section two of the Vendor and Purchaser Act, 1874”. |
|
Housing (Gaeltacht) Act 1929 |
Section 9 |
In subsection (2)— |
|
(a)the substitution of “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2006” for “mortgage made by deed within the meaning of the Conveyancing Acts, 1881 to 1911”, |
||
|
(b)the substitution of “that Act” for “those Acts” in both places where it occurs. |
||
|
Minerals Development Act 1940 |
Section 52 |
In Subsections (1) and (2), the deletion of the words “as tenant for life or person having the powers of a tenant for life under a settlement or”. |
|
Harbours Act 1946 |
Section 169 |
In subsection (5), the deletion of— |
|
(a)“or by reason of his being an infant”, |
||
|
(b)“for his life, or”. |
||
|
Statute of Limitations 1957 |
Section 2 |
In subsection (1), the substitution of “ ‘judgment mortgage’ means a mortgage registered by a judgment creditor under section 114 of the Land and Conveyancing Law Reform act 2006;” for the definition of “judgment mortgage”. |
|
Section 25 |
In subsection (4), the deletion of “any settled land, within the meaning of the Settled Land Acts, 1882 to 1890, or”. |
|
|
Charities Act 1961 |
Section 34 |
In subsection (4), the deletion of “, or the redemption and reconveyance of land which is subject to the mortgage or charge”. |
|
Section 37 |
In subsection (1)— |
|
|
(a)in paragraph (h), the substitution of “land,” for “land.”, |
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(b)the insertion of the following paragraph after paragraph (h): |
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“ (i)the making of an application for a works order under section 43 of the Land and Conveyancing Law Reform Act 2006,”. |
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Companies Act 1993 |
Section 231 |
In subsection (2)(a), the deletion of— |
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(a)“fee farm grant, sub fee farm grant,”, |
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(b)“any rent reserved on any such grant or”. |
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Registration of Title Act 1964 |
Section 3 |
In the definition of “freehold land”, the insertion of “in possession” after “fee simple”. |
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In the definition of “leasehold interest”, the substitution of “estate” for “interest” where it first occurs. |
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The deletion of the definitions of “Bankruptcy Acts”,”Registry of Deeds”, “Settled Land Acts”, “settlement”, “settled land”, “tenant for life” and “trustees of the settlement”. |
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Section 37 |
In subsection (3), the deletion of “In either case,”. |
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Section 38 |
In subsection (1), the deletion of “full or limited”. |
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Section 39 |
The deletion of “full or limited”. |
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Section 44 |
In subsection (3), the deletion of “In either case,”. |
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Section 45 |
The deletion of “full or limited”. |
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Section 46 |
The deletion of “full or limited”. |
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Section 47 |
The deletion of “full or limited”. |
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Section 51 |
In subsection (1), the deletion of “Subject, in the case of a limited owner, to the Settled Land Acts,”. |
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Section 60 |
In subsection (2), the deletion of— |
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(a)“if he is full owner,” in each place where it occurs, |
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(b)“and if he is not full owner, of such persons as may be prescribed”, and |
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(c) “, and, if he is not full owner, to such persons as may be prescribed”. |
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Section 61 |
In subsection (3)(a), the deletion of “full or limited”. In subsection (4), the deletion of “full owner or limited”. |
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Section 100 |
In subsection (2), the deletion of “(including a limited owner exercising powers under the Settled Land Acts or this Act)”. |
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Succession Act 1965 |
Section 60 |
In subsection (1)— |
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(a)in paragraph (c), the substitution of “a sub-lease of the land” for “a sub fee farm grant of the land, or a sub-lease thereof”, |
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(b)in paragraph (c), the deletion of “sub fee farm grant or”, |
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(c)the deletion of “grant or”, |
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(d)the deletion of “any rent reserved on such grant or”. |
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Housing Act 1966 |
Section 71 |
In subsection (4)— |
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(a)the substitution of “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2006” for “mortgage made by deed within the meaning of the Conveyancing Acts, 1881 to 1911”, |
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(b)the substitution of “that Act” for “those Acts” in both places where it occurs. |
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Charities Act 1973 |
Section 4 |
In subsection (3), the deletion of “or the redemption and reconveyance of land which is subject to the mortgage or charge”. |
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Bankruptcy Act 1988 |
Section 50 |
In subsection (1), the deletion of “or a leasehold interest in land”. |
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Section 51 |
The substitution of the following for subsection (1): |
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“(1) A judgment creditor who registers a judgment mortgage under section 114 of the Land and conveyancing Law Reform Act 2006 shall not, by reason of such registration, be entitled to any priority or preference over simple contract creditors in the event of the person against whom such judgment mortgage is registered being adjudicated bankrupt unless the judgment mortgage is registered at least three months before the date of the adjudication.”. |
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Section 61 |
In subsection (3) (a)— |
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(a)the deletion of “fee farm grant, sub fee farm grant,”, |
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(b)the deletion of “any rent reserved on any such grant or”. |
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Section 87 |
In subsection (4), the substitution of “a judgement mortgage under section 114 of the Land and Conveyancing Law Reform Act 2006” for “an affidavit of a judgment mortgage under the Judgement Mortgage (Ireland) Act 1850”. In subsection (5), the substitution of judgment mortgage” for “affidavit”. |
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Trustee Savings Bank Act 1989 |
Section 23 |
The substitution of the following for subsection (5): |
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“(5) Where a Trustee Savings Bank is a creditor under a judgement within the meaning of section 111 of the Land and Conveyancing Law Reform Act 2006, a judgment mortgage may be registered under section 114 of that Act by the secretary or other officer or the law agent of the bank duly authorised in that behalf by the bank.”. |
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Housing (Miscellaneous Provisions) Act 1992 |
Section 5 |
In subsection (6)— |
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(a)the substitution of “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2006” for “mortgage by deed within the meaning of the Conveyancing Acts, 1881 to 1911”, |
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(b)the substitution of “that Act” for “those Acts” in both places where it occurs. |
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Family Law Act 1995 |
Section 10 |
In subsection (1)(e), the substitution of “under section 29 of the Land and Conveyancing Law reform Act 2006” for “for the partition of property or under the Partition Act, 1886, and the Partition Act, 1876”. |
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Powers of Attorney Act 1996 |
Section 16 |
In subsection (2), the deletion of “or as a tenant for life within the meaning of the Settled Land Act, 1882, or as a trustee or other person exercising the power of a tenant for life under section 60 of that Act”. |
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Family Law (Divorce) Act 1996 |
Section 15 |
In subsection (1)(e), the substitution of “under section 29 of the Land and Conveyancing Law Reform Act 2006” for “for the partition of property or under the Partition Act, 1868, and the Partition Act, 1876”. |
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Taxes Consolidation Act 1997 |
Section 574 |
In subsection (3), the deletion of “(and in particular where settled land within the meaning of the Settled Land Act, 1882, is vested in the tenant for life and investments representing capital money are vested in the trustees of the settlement)”. |
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Section 964 |
In subsection (1), the substitution of the following for paragraph (c): |
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“(c)Any judgment mortgage to be registered by a Collector-General under Section 114 of the Land and Conveyancing Law Reform Act 2006 may be registered by a successor.”. |
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Stamp Duties Consolidation Act 1999 |
Section 1 |
In subsection (1), in the definition of “conveyance on sale”, the deletion of “(including a decree or order for, or having the effect of, an order for foreclosure)”. |
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Planning and Development Act 2000 |
Section 99 |
In subsection (3A)(c), the substitution of “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2006” for “mortgage made by deed within the meaning of the Conveyancing Acts 1881 to 1911”. |
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Housing (Miscellaneous Provisions) Act 2002 |
Section 9 |
In subsection (3A)(c), the substitution of “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2006” for “mortgage made by deed within the meaning of the conveyancing Acts 1881 to 1911”. |
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Capital Acquisitions Tax Consolidation Act 2003 |
Section 2 |
In subsection (1), in the definition of “general power of appointment”, the deletion of “or exercisable by a tenant for life under the Settled Land Act 1882,”. |
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Registration of Deeds and Title Act 2006 |
Section 32 |
In subsection (1), the substitution of the following for paragraph (g): |
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“ (g)a judgment mortgage registered under section 114 of the Land and Conveyancing Law Reform Act 2006;”. |
This amendment involves replacing the existing text of Schedule 1 with a revised Schedule containing a list of consequential amendments to other statutes. Basically, it updates references in those statutes to take account of the provisions of the Bill with which we are dealing and it provides for the deletion of obsolete references.
Amendment agreed to.
Schedule 1 deleted.
SCHEDULE 2.
Government amendment No. 71:
In page 72, line 20, in the third column, after "Section 2" to insert the following:
"so far as it relates to contracts for the sale or other disposition of estates or interests in land".
Section 49 of the Bill re-enacts the substance of section 2 of the Statute of Frauds Act 1695 which requires written evidence of the contract relating to land to be produced in court if enforcement of the contract is sought. However, section 2 of the Statute of Frauds also deals with other matters such as contracts relating to guarantees, contracts upon a consideration of marriage and agreements not to be performed within a year. As these matters are outside the scope of the Bill, it is necessary to restrict the scope of the repeal to this particular issue, which is contracts for the sale or disposition of estates or interests in land.
Amendment agreed to.
Amendments Nos. 72 to 77, inclusive, are related and they can be discussed together by agreement.
Government amendment No. 72:
In page 73, between lines 35 and 36, to insert the following:
"
|
4 Geo. 4 c. 18 |
Crown Lands Act 1823 |
The whole Act |
".
These amendments extend the list of provisions to be repealed in the Second Schedule and provide for the correction of some citations. Amendment No. 52 provides for the repeal of section 72(1)(j) of the Registration of Title Act 1964 and the effect of that repeal, which is a necessary consequence of the over-reaching provisions in section 21, is that the rights of persons in actual occupation of registered land or in receipt of the rents or profits thereof will have to be registered in the Land Registry for them to affect the land itself.
Amendment agreed to.
Government amendment No. 73:
In page 73, line 41, in the first column, to delete "c. 86" and substitute "c. 74".
Amendment agreed to.
Government amendment No. 74:
In page 75, between lines 40 and 41, to insert the following:
"
|
27 & 28 Vic. c. 107 |
Drainage and Improvement of Lands Supplemental Act Ireland 1864 |
The whole Act |
".
Amendment agreed to.
Government amendment No. 75:
In page 77, between lines 23 and 24, to insert the following:
"
|
No. 22 of 1933 |
Perpetual Funds (Registration) Act 1933 |
The whole Act |
".
Amendment agreed to.
Government amendment No. 76:
In page 77, line 28, in the third column, after "62(8),", to insert "72(1)(j),”.
Amendment agreed to.
Government amendment No. 77:
In page 77, line 30 and 31, in the third column, to delete "58(2) and 95" and substitute "58(2), 95 and 97".
Amendment agreed to.
Schedule 2, as amended, agreed to.
SCHEDULE 3.
Government amendment No. 78:
In page 79, lines 30 and 31, to delete "property" and substitute "land".
Amendment agreed to.
Government amendment No. 79:
In page 79, lines 46 and 47, to delete "property" and substitute "land".
Amendment agreed to.
Government amendment No. 80:
In page 80, line 15, to delete "property" and substitute "land".
Amendment agreed to.
Schedule 3, as amended, agreed to.
Title agreed to.
Bill reported with amendments.
When is it proposed to take Report Stage?
Next Wednesday at 3.30 p.m.
When is it proposed to sit again.
Next Wednesday at 2.30 p.m.