New Appeal: Can the deposit of deeds still create an equitable mortgage?

In this determination, Ulster Bank Limited v Hannon, the Supreme Court granted Hannon leave to appeal from a decision of the Court of Appeal on the question:

Has the Registration of Deeds and Title Act 2006, and in particular s 73 thereof, abolished equitable mortgages by deposit of land certificates or other title deeds with a view to securing borrowings and what is the effect of that legislation in terms of the ranking of priorities where several charges are created over land including by the deposit of land certificates or title deeds?

 

Background

Hannon deposited deeds for land with Ulster Bank as security for loans. In 2014 the High Court made an order that by virtue of the deposit of those deeds the money owed to the Bank stood well charged against Hannon’s land.

In the Court of Appeal, Hannon argued that, with the coming into force of s 73 of the Registration of Deeds and Title Act 2006, depositing of deeds for land no longer has the effect of creating an equitable mortgage. The Bank argued that the effect of s 73 is that the deed holder no longer has priority over persons with a registered charge on the land. The CoA upheld the High Court order.

Hannon sought leave of the Supreme Court for a further appeal. Granting leave, the Court held that the case raised an issue of general public importance in light of the number of informal mortgages created by the deposit of deeds and the requirement by the 2006 Act that lenders register any lien created in that manner.

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