Bank has no legal interest in Mansfield house, court rules

A BANK-APPOINTED receiver to a company linked to the Mansfield group is not entitled to take possession of a house occupied by the estranged daughter-in-law of businessman Jim Mansfield, the High Court has ruled.

Mr Justice Paul Gilligan ruled Donna Cosgrave, who has lived with her two children at Saggart Lodge, a detached Victorian house at Saggart, Co Dublin, since 2006, had an equitable interest in the property. He also found the property is a family home under the meaning of the 1976 Family Home Protection Act and the bank had no legal interest in it.

The property is part of a 10.6 acre site purchased in 2004 by Jeffel Ltd, Rathcoole Dublin, which the judge said is “loosely related” to the Mansfield group of companies.

Martin Ferris, appointed by Bank of Scotland as receiver to Jeffel in July 2010, had asked the court to rule on the respective property rights of Jeffel and Ms Cosgrave.

Ms Cosgrave and her husband, James Mansfield jnr, a director of Jeffel, separated in 2005 after which it was agreed he would buy the house from Jeffel and transfer it to her. A deed of transfer was executed in December 2007 but the transfer was never formally affected as no stamp duty was paid nor was it registered against the folio in the land registry.

On March 14th, 2007, Jeffel entered into an agreement with Bank of Scotland for all its past and future debts, secured on assets belonging to the company. The bank provided Jeffel with a €35 million loan to buy the site containing the property.

Arising out of that agreement, the receiver argued he was entitled to immediate possession of the Saggart Lodge property. It was contended the bank had not been made aware of Ms Cosgrave’s interest in the property and was not aware from Jeffel’s financial statements it received full value for the sale to Mr Mansfield.

The receiver argued the March 2007 agreement ranked in priority to any purported conveyance of the property to Ms Cosgrave.

Ms Cosgrave, a notice party, argued the company held she was entitled to a full and equitable legal interest in the property. It was her family home and was never intended to be included among the bank’s security as part of the 2007 agreement with Jeffel.

In his judgment, Mr Justice Gilligan found Ms Cosgrave had lived at the property following its renovation in 2006 and had an equitable interest in it because Jeffel allowed her reside there. That interest was created before the 2007 agreement between Jeffel and the bank.

While the bank had a charge on the property, it was clear, when entering the 2007 agreement, the bank failed to conduct a detailed investigation into the title of the properties taken as security. Had it done so, it would have actual notice of her residence.

As a result, any interest the bank had in the property was subject in terms of priority to Ms Cosgrave’s. The property also enjoyed the protections in the Family Home Protection Act. Any interest in the property which Jeffel sought to convey to the bank was done without the consent of Mr Cosgrave and therefore was void.