Ulster Bank v Rockrohan: Statute of Limitations won’t prevent enforcement of 1987 well charged order

Statute-of-LimitationsIn February 1987 the High Court granted Ulster Bank a well charged order for IRL £1,267,169 against Rockrohan secured against 120 acres in Co Cork and an order for a sale of that land. The court did not, however, grant the Bank an order for possession because there was ongoing litigation against a number of parties–including Ulster Bank–which, if successful, would have enabled the payment of the debt without necessitating the sale of the property. As it was one of the parties involved in the secondary litigation, the Bank agreed to wait until that litigation was resolved before enforcing its order. That litigation, though, did not conclude until June 2005.

In September 2006, the Assistant Examiner of the High Court set the date and conditions for the sale of the land. Rockrohan made an application for judicial review of that decision. Rockrohan argued that it had been in adverse possession of the property against the Bank since 1989, that the Bank failed to act expeditiously to enforce its order for sale and was now estopped from doing so. Mc Govern J (here) held that as the High Court did not grant the Bank possession of the property in 1987, Rockrohan were not in possession adverse to anyone; furthermore he was satisfied that the delay to the sale of the land was due to the protracted litigation. He refused the relief sought.

In January 2009 the High Court (Irvine J) issued another judgment (here) granting Ulster Bank an order for possession and rejecting Rockrohan’s claim that the Bank’s interest in the land was extinguished by the Statute of Limitations Act 1957. Rockrohan appealed that decision to the Supreme Court.

Supreme Court

There were two issues for consideration on appeal: whether Rockrohan had a claim for adverse possession against the Bank, and if so did the Bank have a defence of estoppel against that. The Court reviewed the authorities on averse possession which hold that not all possession of land by someone other than by the owner is adverse. The basics are that the possessor must hold the land overtly, but not by force, by deception or by permission of the owner. A mortgagor can be in adverse possession to a bank: where, for example, no payments are made and the bank does not enforce its security, National Westminister Bank Plc v Ashe [2008] 1 WLR 710. In this case, though, Rockrohan was in possession of the property with the Bank’s permission. The Bank had an order for sale that it could enforce at any time, but it held off on exercising that option on Rockrohan’s request.

The Court quoted, with approval, Snell’s Equity 32nd Ed on estoppel:

Where by his words or conduct one party to a transaction freely makes to the other a clear and unequivocal promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) or was reasonably understood by the other party to have that effect, and, before it is withdrawn, the other party acts upon it, altering his her position so that it would be inequitable to permit the first party to withdraw the promise, the party making the promise or assurance will not be permitted to act inconsistently with it.

In this case there Rockrohan made a clear and express request in open court that the Bank hold off on its order for sale of the property on the understanding that the debt would be satisfied by the profits from the other litigation if it was successful or by the sale of the property if it wasn’t. The Bank altered its position in reliance on that representation. The Court held that it would be inequitable to allow Rockrohan to resile from that position.

The Court also approved Irvine J’s finding that the 1957 Act cannot be interpreted as prohibiting the recovery of a debt secured under a well charged order or from recovering interest due on such a debt [27].

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