The Gazette 1983

GAZETTE

SEPTEMBER 1983

enclosed, have been executed by our clients, and all payments have been made in accordance with the first schedule to the contract, our clients will not be contractually bound to your client(s)". The Company created a Floating Charge over all its assets in favour of the Northern Bank Limited ("the Bank") on 20 December 1979. On 26 September 1980 the Company created an Equitable Mortgage by deposit of their deeds to the site in favour of the Bank. On 1 October 1980 a Receiver was appointed by the Bank under the powers contained in the Floating Charge. All the depositors had paid their deposits to the Company before the Equitable Mortgage was created. It was submitted on behalf of one of the depositors, Michael Cummins, who had entered into a building agreement, that his deposit was in part payment of the purchase money, that the Company was a trustee for him to that extent of the legal estate in the property and that he was therefore entitled to a lien on the property in respect of the deposit in accordance with the decision in Tempany -v- Hynes (19761 1.R.101 and was entitled to rank as a secured creditor. It was argued on behalf of the Bank that such a lien only arose in the case of a contract of which the court would grant specific performance and that this was not such a contract. The Court held that where there was a contract in existence the payment of a deposit entitled the purchaser to a lien on the property in respect of the money so paid and the existence of an equitable lien could not depend on the availability of the remedy of specific performance referring to Rose -v- Watson 10 H.L.C.672 and Tempany -v- Hynes. In the case of the other depositors who had not entered into agreements it was argued on behalf of the bank that where no contract at all existed, or at best, a contract which could not be enforced either by an action for specific performance or in any other way, no lien arose in favour of the depositors. The Court rejected this argument relying on the decision in Whitbread& Co. Ltd. -v- Watt 11902] lCh835 and Rose -v- Watson. The Court noted that it was conceded that the Company had not been for some time in a position to implement the transaction in respect of which the deposits were paid. It was clear that if the Company were not in liquidation the depositors would have an uncontestable right in every case to recover their deposits. If the lien relied on depended on that right and need not be the result of any express contract it followed that the fact that in a number of cases there was no enforceable contract was not material. The court therefore held that the depositors were entitled to

a lien on the site in respect of the money so paid and were entitled to rank as secured creditors in the liquidation. As the deposits had been paid before the Equitable Mortgage was created, the equitable interests created by the payment of the deposits had priority over the subsequent equitable interests created by the deposit of the title deeds and the appointment of the Receiver. The court noted 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. In the Matter of Barrett Apartments Limited, High Court per Keane J. 15 July 1983 unreported. John F. Buckley. CRIMINAL LAW Section 7 Offences against the State Act 1939 - Obstruction of Government. Patrick Kehoe had been convicted in the Special Criminal Court of the offence of obstruction of government under Section 7 of the Offences against the State Act 1939, and sentenced to three years in prison. The Court had accepted evidence that Kehoe was one of a large number of people who had marched to the British Embassy protesting at conditions in the H Blocks in Northern Ireland. Some of these marchers had carried various implements. The Gardai had erected barriers at some distance from the British Embassy, and organised themselves behind the barriers in order to prevent the advance of the marchers towards the British Embassy. The Gardai were then attacked by some of the marchers, and an attempt was made to breach the barriers. Kehoe was in possession of a large pole, with which he attacked the officer in charge of the Gardai. On the basis of the evidence, the Special Criminial Court convicted Kehoe under Section 7. The Court held that the Gardai, in setting up the cordon and resisting the further progress of the march, were manifestly performing the duty imposed on the Government to discharge its obligations under the provisions of the Diplomatic Relations and Immunity Act 1967, and in particular protecting the premises of a foreign mission. On appeal, the Court of Criminal Appeal held as follows: 1. There was sufficient evidence of identification to allow the Special Criminal Court to convict Kehoe. 2. The word "government" in Section 7 denotes more than the word "cabinetx". It includes the

SALE OF LAND Payment of booking deposits - priority of depositors against Equitable Mortgagee. Barrett Apartments Limited ("The Company") owned a site at Clontarf Dublin on which it proposed to build a block of flats. It was intended that the sales of the flats be carried out by means of a contract for sale and an agreement for lease. Fourteen persons paid deposits ranging from £3,000 to £10,000 to the Company. Each of the depositors paid "booking deposits" of at least £3,000 and a further £7,000 was to be paid on the execution of the building agreement. Building Agreements were signed in only 2 cases. In respect of some of the deposits a re- ceipt was issued which included the following statement "the sum referred to above is a booking deposit only. It is returnable upon notification by either party. Any agreement regarding the proposed purchase will be the subject of a written contract, and it is agreed that this receipt does not constitute a note or memo of any agreement. It is further agreed that no right of action at law arises out of this receipt". In a number of cases the Solicitors for the Company wrote to the Solicitors for the proposed purchasers a letter including the following statement "we wish to confirm that we act for Messrs. Barrett Apartments Limited who have instructed us that your client(s) has/have agreed to purchase the above premises". In some cases the initial letter from the Company's Solicitor included the following statement "Although your client(s) has paid a booking deposit direct to our clients there is not in existence any contractual obligation on our clients to complete a binding agreement with your client(s) and this letter and the enclosures are not intended to constitute an offer to sell the above mentioned apartment to your client(s). Accordingly until such time as the contracts which are enclosed here- with, together with the other documents