Can judicial decisions opening insolvency proceedings be registered in the Land registry in accordance with your legislation?
If affirmative, what effects do these registrations produce?
Council Regulation (EC) No. 1346/2000, as it relates to personal insolvency, was transposed into Irish Law under a Statutory Instrument entitled European Communities (Personal Insolvency) Regulations 2002 (S.I. No. 334/2002).
Article 4 of the Statutory Instrument amends Section 69 of the Registration of Title Act 1964 by inserting the following as a burden that may be registered affecting registered land:
69(1)(rr) a judgment opening proceedings referred to in Article 3(1) of the Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings.
The wording of such a burden is:
Judgment opening the proceedings referred to in Article 3(1) of the Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings affecting the interest of…. in the property obtained on [date] in [Country].
An application to register such burden should be accompanied by:
1) a copy of the judgment and appointment and evidence of registration in the Office of the Official Assignee in accordance with Section 140A of the Bankruptcy Act 1988.
2) Evidence of publication of the judgment and notice of appointment of the liquidator”,
in Iris Oifigiúil and at least one daily morning newspaper circulating in the State, in accordance with Section 140B of the Bankruptcy Act 1988, should also be lodged OR it should be confirmed by the lodging party, if such be the case, that the bankrupt has no establishment, within the meaning of Article 2(h) of the Regulation, in the State.
Applications for registration of these burdens are generally lodged by or on behalf of the relevant jurisdiction’s Insolvency Service. No registration fee is payable.
The effect of this registration is that it acts as a warning notice only and does not restrict subsequent registrations.
Council Regulation (EC) No. 1346/2000, as it relates to corporate insolvency, was transposed into Irish Law under a Statutory Instrument entitled European Communities (Corporate Insolvency) Regulations 2002 (S.I. No. 333/2002).
Article 3 of the S.I. is covered by Section 1419 of the Companies Act 2014.
Section 1419(1) of the Companies Act 2014 requires a “liquidator» to register the judgment opening insolvency proceedings and, where appropriate, the decision appointing him/her, with the Registrar of Companies, where he/she intends to publish notice of such judgment or take any other action on foot of it.
In the case of corporate insolvency, no amendment was made to Section 69 of the Registration of Title Act 1964 to provide for registration of a burden. Therefore, registration takes place only in the Companies Registration Office and no registration is made in the Land Registry.
Vesting of Property in “Liquidators” – Registered Land
The Irish Land Registry will register a liquidator as owner of a property where property has been vested in the liquidator by order of the Court.
An application to have a property vested in the ownership of the liquidator must contain:
1) a copy of the Order operating to vest the property in the liquidator
2) evidence of registration of the judgment and notice and publication (if required), in the Office of the Official Assignee (personal insolvency) or the Companies Office (corporate insolvency)
3) a certified translation of the legislation, under which it is claimed that the subject property has vested, together with a legal opinion in either English or Irish from a legal practitioner in the jurisdiction where judgment was obtained confirming the effects of the legislation.
Disclaimers by Liquidator of Onerous Property
In some circumstances, a liquidator will disclaim any interest in particular property of a bankrupt, usually where the property is not considered sufficiently valuable.
A number of disclaimers, whereby the liquidator disclaims any interest in a particular property, have been received in Ireland from the Insolvency Services of Northern Ireland and Great Britain.
On receipt of a notice of disclaimer from a UK Insolvency Service, the following note is entered as an “Ownership Note” in Part 2 of the relevant Folio:
Copy Disclaimer pursuant to [Article 288 of The Insolvency (Northern Ireland) Order 1989] OR [Section 315 of the Insolvency Act 1986] is filed on Instrument No. D20–LR –. [Date]
The registered owner of the property and the registered owner of any charge is notified of the entry of the above note.
Dealing by owner of property affected by a notice of disclaimer
In Ireland the property of a bankrupt vests on adjudication in the Official Assignee. There is legal authority to the effect that when the Official Assignee disclaims a bankrupt’s property the said property is no longer available to the bankrupt or to the Official Assignee.
Authorities suggest the State may claim such property under Section 30 of the State Property Act 1954. However, such disclaimer does not affect the rights and liabilities of any other person, such as a mortgagee. Section 56 of the Bankruptcy Act 1988 refers. Section 615 of the Companies Act 2014 enables liquidators, acting in the winding up of a company, to disclaim onerous property with the leave of the court.
In the U.K., there appears to be authority that disclaimed property is regarded as bona vacantia. This means in effect “ownerless property” that ultimately vests in the Crown.
Where a dealing by a registered owner is lodged, against whom a notice of disclaimer has
been entered, at a minimum notices should be served on the Chief State Solicitor and the relevant Insolvency Service and “liquidator”.
Transfers on sale by “liquidators”
Section 1419(1) of the Companies Act 2014 requires a “liquidator» to register the Judgments opening insolvency proceedings, obtained in a court of any EU Member State, (other than Denmark), are recognised without any further formalities in Ireland. Subject to the provisions of Article 18 of the Regulation, the “liquidator” may exercise all the powers conferred on him/her by the law of the State where Article 3(1) proceedings were opened.
However, before the “liquidator” can act on the judgment in Ireland, certain procedural formalities must be completed.
First, the judgment and notice of appointment of the “liquidator” must be registered with the Official Assignee or Companies Registration Office, under Section 140A of the Bankruptcy Act 1988 or Section 1419 of the Companies Act 2014, as appropriate.
Secondly, in the case of personal insolvency, the judgment and notice of appointment of the “liquidator” must be published in Iris Oifigiúil and at least one daily newspaper circulating in the State, in accordance with Section 140B of the Bankruptcy Act 1988. In the case of corporate insolvency, the judgment and notice of appointment of the “liquidator” must be published in Iris Oifigiúil and at least once in two daily morning newspapers circulating in the State, in accordance with Sections 711 and 1420 of the Companies Act 2014. Publication is not mandatory, however, if the bankrupt or insolvent body corporate has no establishment”, within the meaning of Article 2(h) of the Regulation, in the State.
Transfers on sale by “liquidators» should be accompanied by the following documentation:
• Copy of the judgment and official translation if the original is not written in Irish or English.
• Evidence of registration in the Office of the Official Assignee or Companies Registration Office, as appropriate.
• Copies of the publications containing reference to the judgment and the notice of the appointment of the “liquidator» or confirmation that the bankrupt or insolvent company has no “establishment” in the State, within the meaning of Article 2(h).
It should be noted that these transfers do not overreach any registered charges or burdens. The purchaser will take subject to such charges or burdens, unless they are specifically discharged. See Third Party Rights in Rem below.
Third Party Rights in Rem
Article 5 of the Regulation provides that the opening of insolvency proceedings shall not affect the rights in rem of creditors or third parties. Article 5(3) states that the right, recorded in a public register and enforceable against third parties, under which a right in rem may be obtained, shall be considered a right in rem.
Article 11 of the Regulation provides that the effects on the rights of the debtor in immoveable property subject to registration in a public register, shall be determined by the law of the Member State under whose authority the register is kept. It would appear, therefore, that sales by mortgagees in possession and sales by receivers, appointed under registered charges, are not affected by Article 3(1) insolvency proceedings.
In the case of a transfer on sale of the property by the registered owner of a prior charge, in exercise of a power of sale, registration of the purchaser should proceed in the usual manner.
This is the case even where the “liquidator” has been registered as owner and/or a Section 69(1)(rr) burden has been registered. Section 62(10) of the Registration of Title Act 1964 applies to any such burden ranking after the charge. Notices are served upon completion of the application on the Registered Owner of the property and the owner of any puisne burden registered on the property.
While Article 5 would appear to apply also to sales by receivers, appointed under a prior registered charge, a receiver is selling as agent or attorney of the owner of the property. Such a sale does not generally overreach other interests. Therefore, prior notice is served on the “liquidator” and Insolvency Service of the relevant jurisdiction. The notice points out that in view of Article 5 of the Council Regulation (EC) No. 1346/200, it is proposed to proceed with registration of the purchaser. The notice also seeks clarification as to whether or not the subject property is being disclaimed. In the event that no objection is received, registration of the purchaser proceeds any Section 69(1)(rr) burden is cancelled.
Recognition and Enforcement of Other Judgements
Under Article 25 of the Regulation, other judgments handed down by the court, where the judgment that opened insolvency proceedings was obtained, concerning the course and closure of the insolvency proceedings, are also recognised without any further formalities.
Furthermore, judgments deriving directly from insolvency proceedings and which are closely linked to them, even if handed down by another court, are recognised without further formalities. This includes preservation measures taken after the opening of insolvency proceedings.
Enforcement of judgments, to which Article 25 applies, is governed by Council Regulation (EC) No. 44/2001, known as the “Brussels 1 Regulation” Applications for the enforcement of a judgment, under the Brussels 1 Regulation, are made to the Master of the High Court.
See Articles 6, 7 and 8 of S.I. No. 333/2002 and Articles 5, 6 and 7 of S.I. No. 334/2002.
Any application for registration, grounded on an Article 25 judgment, should be accompanied by the relevant order of the Master of the Irish High Court declaring that the judgment is enforceable.