The Gazette 1983

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. 77. No. 7. In this issue Comment

September 1983

Saving Their Deposits?

Comment

175

T hat the people who paid "Booking Deposits" for the apartments which the failed Barrett Apartments Ltd., never did build were fortunate is clearly hinted at in Mr. Justice Keane's well reasoned judgment in the matter of Barrett Apartments Ltd., (The High Court 15th July 1983 unreported). His decis- ion that the deposits paid to Barrett Apartments Ltd. at a stage at which that company had created only a floating charge over its assets, gave the prospective purchasers a lien over the company's lands and priority over the sub- sequently created equitable mortgage by deposit of the title deeds and appointment of a receiver. His comment that the position might well have been different if the bank had stipulated for a legal mortgage of the property as a condition of making their advance shows not only how lucky the Barrett depositors were, but points the way for lending institutions to avoid the recurrence of similar situations in the future. Solicitors acting for purchasers of yet-to-be-built houses and apartments regularly advise clients of the danger of paying substantial deposits or stage payments over to the builders. Equally regularly, the client is pre- sented with a simple choice: either he pays the money over or he does not get the house or apartment. While the Barrett decision will clearly be helpful to persons who have already paid such deposits, it is certain that lending institutions will take steps to close the gap in their protection which this case has exposed. The fact that purchasers' deposits are at risk has been of concern to the Law Society for some years. It was critical of the ministerial approval given to the National House Building Guarantee Scheme, which did not (as its English counterpart does) provide security to purchasers for their deposits. The introduction of a scheme of deposit protection consisting of the creation of a mutual fund, topped up by insurance cover, is long overdue. The NHBG Scheme is now well established and the construction industry deserve considerable credit for the liberal way in which the scheme has been operated. The only obvious defect is the absence of protection for depositors: indications have been given that the inclus- ion of an arrangement for the protection of deposits in the scheme would be considered. It is time that such con- sideration was urgently given. With the inclusion of such protection in the Scheme the industry could be justly proud of its work. • 175

Right to Jury Trial in cases of Contempt

177

^/Practice Notes

183

St. Louis University Law School seeks 'A Little Irish' Collection

185

^Medico — Legal Society

187

^ S p e c i al Damage!

189

^ Mayo/Galway Golfing Society

189

- SYS Transcript Service

189

- Section 45 Consents and the Treaty of Rome

191 197 199

Book Review Correspondence

Executive Editor: Mary Buckley Editorial Board: Charles R. M. Meredith. Chairman John F. Buckley Gary Byrne William Earley Michael V. O'Mahony Maxwell Sweeney Advertising: Liam O hOisin. Telephone 305236 The views expressed in this publication, save where other-wise indicated, are the views of the contributors and not necessarily the views of the Council of the Society. The appearance of an advertisement in this publication does not necessarily indicate approval by the Society for the product or service advertised. '

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