Supreme Court

The Governor and Company of the Bank of Ireland 
(Plaintiff)

v. 

Michael Joseph Smyth and by order Una Smyth
(Defendant)

No.129 of 1993 
[15th November, 1995]	

Status: Reported at [1995] 2 IR 459; [1996] ILRM 241

Hamilton C.J.	
I have read the judgment about to be delivered by Blayney J. and I agree with it.

Egan J.
I too agree with the judgment of Blayney J.

Blayney J.
The first defendant, Michael Joseph Smyth, is a farmer and is the owner of the lands comprised in Folio 9173F of the Register of Freeholders, County of Tipperary, which are situate at Lelagh, Rathcabbin, Roscrea. There are approximately 124 acres in the folio and the defendants’ family home is situate on part of the lands comprised in the folio.
On the 25th May, 1978, the first defendant “Mr. Smyth” executed an indenture of charge in favour of the Governor and Company of the Bank of Ireland “the bank” to secure all monies then owing or which should thereafter become owing on a general balance of account or otherwise from Mr. Smyth to the bank. The second defendant “Mrs. Smyth” signed a form of consent endorsed on the said charge whereby she consented for the purpose of s. 3 of the Family Home Protection Act, 1976, to the said charge. The said consent was in the following form:-

“I, Una Smyth of Lelagh, Rathcabbin, Roscrea, being the spouse
of Michael Smyth hereby consent for the purpose of s. 3 of the Family Home Protection Act, 1976, to the within mortgage to be created by the said Michael Smyth in favour of the Governor and Company of the Bank of Ireland for all liabilities, present and future, either solely or jointly whether as principal or surety with another or others and hereby consent to the registration in (sic.) the mortgage.
 Dated the 25th day of May 1978.
 Signed by the said Una Smyth.”

In June, 1988, there was a sum of £180,289.38 due and owing by Mr. Smyth to the bank on foot of the charge dated the 25th May, 1978. The bank thereupon issued a special summons pursuant to s. 62, sub-s. 7 of the Registration of Title Act, 1964, seeking an order for possession of the lands described in the said Folio 9173F of the Register of Freeholders County of Tipperary.
The summons was heard by Geoghegan J. on oral evidence on the 5th and 9th March, 1993, and in a reserved judgment dated the 26th March, 1993, the learned trial judge decided that the bank was not entitled to an order for possession of Mr. Smith’s lands and dismissed the claim of the bank. The bank now appeals against that dismiss.
A number of issues were raised in the High Court but the sole issue with which this Court is concerned is the single issue on which the learned trial judge decided in favour of the defendants. He held that “while there was a document purporting to be a consent in writing, there was in fact no consent within the meaning of the Act of 1976.”
The circumstances in which Mrs. Smyth came to give her consent to the transaction were not in dispute and might be summarised as follows. On the 12th May, 1978, Mr. Dowley wrote to Mr. Smyth as follows in connection with the proposed charge:-

“Dear Mr. Smyth
Further to recent correspondence I have now received from the bank’s law department the necessary legal papers for benefit of your signature.

Mrs. Smith’s signature will also be required and I shall be obliged if both of you will call on me as soon as convenient in order that we may complete the matter in hand.

Yours sincerely D.E. Dowley

Manager.”

In pursuance of this request, Mr. and Mrs. Smyth called to the bank on the 24th May. In the course of an interview with Mr. Dowley, which lasted between ten and fifteen minutes, Mrs. Smyth signed the form of consent. Mr. Dowley did not explain to Mrs. Smyth that she would lose her home if the payments were not made. And he did not suggest to her that she should get independent advice. The learned trial judge accepted that Mr. Dowley explained to Mrs. Smyth that she was signing a mortgage on her family home. However, it was accepted by counsel for the bank in the course of his submissions to this Court that Mrs. Smyth in fact believed that the charge did not affect the family home. Their house bad been built with a loan of £8,000 from the A.C.C., and there was a mortgage on the farm to secure this sum, and Mrs. Smyth believed that because of this the bank would be unable to sell or take possession of the family home. Counsel for the bank referred to this as being a unilateral mistake on the part of Mrs. Smyth and submitted that it did not affect the validity of her consent as Mr. Dowley, and accordingly the bank, could not reasonably have been expected to be aware of what was in her mind.
The main case made by the bank was that they had no duty at common law or in equity, or under the provisions of the Family Home Protection Act, 1976, to explain to Mrs. Smyth the nature of the charge to which she was giving her consent or the effect or consequences it could have to her.
Accordingly, as there had been no breach of duty on the part of the bank, it was entitled to rely on the consent signed by Mrs. Smyth even though there had been a unilateral mistake on her part in regard to the nature of the charge she was signing.
On behalf of Mrs. Smyth it was submitted that before her consent could be a valid consent under the Act of 1976 it had to be established that she fully and freely consented to what she was doing. As the bank had failed to establish this, it could not rely on the consent.
The net issue in the case is, accordingly, whether the consent signed by Mrs. Smyth was a sufficient consent for the purposes of the Act of 1976 having regard to the circumstances in which her consent was given and, in particular, having regard to her understanding of what she was doing. It was common case that, as required by the Act of 1976, she had signed the consent before her husband executed the charge, and accordingly this was not an issue in the case. The onus of proving that it was a sufficient consent is in my opinion on the bank. It is relying on the charge as giving it title to recover possession of Mr. Smyth’ s farm and, accordingly, the validity of the charge is an essential proof in the case and this depends on Mrs. Smyth having given a valid consent to the charge. In the absence of such a consent s. 3, sub-s. 1 of the Act of 1976 makes the charge void. That subsection provides as follows:-

“3. - (1)	Where a spouse, without the prior consent in writing of the other spouse, purports to convey any interest in the family home to any person except the other spouse, then, subject to subsection (2) and (3) and section 4, the purported conveyance shall be void.”

It is common case that sub-ss. 2 and 3 and s. 4, to which the provisions of sub-s. 1 are subject, do not affect the position here, and accordingly do not have to be considered. The Court is concerned solely with whether there was a valid “prior consent in writing” given by Mrs. Smyth. It is clear from the definitions in s. 1 of the Act that a charge is a conveyance within s. 3, sub-section 1.
The question of what the requirements are which a consent has to comply with in order to be valid has not as yet been considered by any court. It seems to me that they have to be deduced from the object of the Act itself and from dicta of this Court explaining it, and also from authorities setting out what requirements have been laid down for consents which are required in other contexts.
The long title of the Act is:-
“An Act to provide for the protection of the Family Home and for related matters.”
The aim thus clearly set out requires no explanation and it is plain that the section which essentially gives effect to it is section 3. It follows that the purpose of the provision in s. 3 is to enable a spouse to protect the family home for her own benefit and also for that of her children. This is set out in very clear language by Henchy J. in his judgment in Hamilton v. Hamilton  [1982] I.R. 466, where he said at p. 485:-

“The Act of 1976 provides for the protection of the family home, presumably as an implementation of the constitutional duty that falls on the State to protect the family and to guard with special care the institution of marriage. To this end, the Act of 1976 (as I have pointed out) created a new right whereby (save in excepted cases) the non-disposing spouse is given a right to veto the disposition to a third party of any legal or equitable interest in the family home. But the Act goes further than giving just a power of veto. Even in cases where the non-disposing spouse does not profess to exercise the right to veto (because, for example, he or she does not know of such a right) or where such spouse is willing to refrain from exercising the right to veto and has expressed such willingness orally, nevertheless, if the prior consent in writing has not been given by the non-disposing spouse, the purported conveyance (save in the excepted cases) is rendered void by s. 3 of the Act of 1976. This, to my mind, shows that the legislature, in order to preserve inviolate the dual and interlocking rights of the spouses in the family home, intended the penalty of voidness to apply in order to prevent either a legal or an equitable interest in the family home being disposed of to a third party by the unilateral action of one of the spouses.”
This passage emphasises an important aspect of the right given to the spouse – it is given for the protection of the family, and not simply for the protection of the spouse. So in considering whether a valid consent has been given, this aspect must also be taken into account.
In Somers v. W.  [1979] I.R. 94, Griffin J. also referred to s. 3 of the Act. The plaintiff there had purchased the family home of the defendant from the defendant’s husband. The couple were separated at the time of the sale and the conveyance had been executed without obtaining the defendant’s prior written consent. Griffin J. said in his judgment at p.113:-
“… the prohibition (i.e. in s. 3) covers every conceivable type of disposition of the family home by the defendant’s husband. If, therefore, the husband intends to sell the family home, or to raise a mortgage on the security of it, unless the exceptions in s. 3 apply, he cannot do so without first discussing the matter with the defendant and obtaining her prior consent in writing.”
This passage would seem to suggest that the responsibility for obtaining the consent is that of the other spouse after the matter had first been discussed between them.
There are two areas in which the requirements for a valid consent have been considered by the Court - marriage and adoption. In N v. K  [1985] I.R. 733 four of the judges dealt with the nature of the consent required for a valid marriage. Finlay C.J. said at p. 742:-
“Consent to the taking of such a step [ i.e. valid marriage must, therefore, if the marriage is to be valid, be a fully free exercise of the independent will of the parties.
Whilst a court faced with the challenge to the validity of a marriage, based on an absence of real consent, should conduct its inquiry in accordance with defined legal concepts such as duress or, what has been described by O’Hanlon J., as ‘the related topic of undue influence’ (at p. 281) these concepts and the legal definition of them must remain subservient to the ultimate objective of ascertaining, in accordance with the onus of proof, whether the consent of the petitioning party was real or apparent.”
Griffin J. said at p. 751:-
“It is therefore of the utmost importance that the contract of marriage should be entered into with the full and free consent of the contracting parties, and if, as the Chief Justice has stated in his judgment, the apparent decision to marry on the part of one of the parties has been caused to such an extent by external pressure as to lose the character of a fully free act of that party’s will, no valid marriage has taken place.”
Hederman J. said in his judgment at p. 753:-
“A personal and full internal and informed consent is essential to a valid marriage.”
McCarthy J. at 754 refers to:-
“The need of a true voluntary consent, based upon adequate knowledge and freed from vitiating factors commonly described as undue influence or duress particularly those emanating from third parties.”
And at p. 755 of the report he stated:-
“The test – whether or not each party to the contract brought an informed and willing consent to it – in my view, is a subjective one, the burden of proving which lies upon the petitioner for a declaration of nullity.”
In the area of adoption, in G. v. An Bord Uchtála  [1980] I.R. 32, Walsh J. said in his judgment at p. 74:-
“There is no definition in any of the Acts of the phrase ‘the placing of the child for adoption’. However, I think one may reasonably assume that it means either the handing over of the child for the purpose of its being adopted or even, if the mother retains the child, the giving of a clear and unambiguous indication that it is her desire to surrender her natural rights in respect of the child and that it be adopted. I am satisfied that, having regard to the natural rights of the mother, the proper construction of the provision in s. 3 of the Act of 1974 is that the consent, if given, must be such as to amount to a fully informed, free and willing surrender or an abandonment of these rights.”
The consequences of a consent given under s. 3 are not as far reaching as the consequences of a consent to marry or to place a child for adoption but one of the elements required for the validity of the consent in each of these cases is in my opinion applicable in the case of a consent under s. 3 also. This is the requirement that the consent must be an “informed consent”. Both Hederman J. and McCarthy J. used this particular term, and McCarthy J. also refers to “the need of a true voluntary consent based upon adequate knowledge.” And in G. v. An Bord Uchtála  [1980] I.R. 32, Walsh J. says that the consent to place a child for adoption must be a fully informed consent.
In my opinion a consent under s. 3 must satisfy this requirement. It must be a fully informed consent. The spouse giving it must know what it is that he or she is consenting to. Since giving one’s consent means that one is approving of something, obviously a precondition is that one should have knowledge of what it is that one is approving.
In the instant case I am satisfied that Mrs. Smyth did not know what she was consenting to. She believed that the charge would affect the land only and would not affect the family home. She was not aware that the charge covered the family home as well. Her consent, therefore, was not a fully informed consent and on that ground was in my opinion invalid.
It was submitted on behalf of the bank, however, that as Mr. Dowley could not have known what was in Mrs. Smith’s mind, the bank was not affected by the fact that she did not know that the charge included the family home as well as the land. I reject this submission for two reasons. Firstly, on the facts here the validity of the consent depends solely on whether Mrs. Smyth had full knowledge of what she was doing. That the bank was not aware of her lack of knowledge is immaterial. Secondly, the bank would be treated as having constructive notice of her lack of knowledge. This arises under s. 3 of the Conveyancing Act, 1882, the relevant part of which is as follows:-
“3. - (1)	A purchaser shall not be prejudicially affected by notice of any instrument, fact, or thing unless -
(i) it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him.”
If Mr. Dowley had enquired as to the state of knowledge of Mrs. Smyth in regard to what was covered by the charge, he would have discovered that she believed that it did not apply to the family home, and accordingly he is deemed under the section to have constructive notice of this since it would have been reasonable for him in the circumstances to make such an enquiry. The bank was concerned to get a good title under the charge, and this involved getting a valid consent from Mrs. Smyth, which in turn required that Mr. Dowley should make enquiries as to what she knew about the charge in order to ensure that she understood what she was being asked to consent to. If Mr. Dowley had made these enquiries, he would have discovered her lack of knowledge and been able to remedy it. And since the enquiries ought reasonably to have been made in the circumstances, the bank is treated as having constructive knowledge of what the enquiries would have revealed.
It was argued on behalf of Mrs. Smyth in the High Court that the bank had a duty to explain the charge fully to Mrs. Smyth and to suggest to her that she should get independent advice. In my opinion this is not correct. The bank did not owe any duty to Mrs. Smyth to take these steps. The reason they ought to have been taken by Mr. Dowley was to protect the bank’s own interests since if Mrs. Smyth had consented to the charge after it had been fully explained to her and after she had received independent advice it is unlikely that her consent could have been challenged. So it is correct that the bank ought to have done these things, but not because it owed Mrs. Smyth any duty to do so. The reason was to ensure that it got a good title to the land which was the subject of the charge.
I am satisfied in the circumstances that the charge given by Mr. Smyth to the bank is void by reason of his wife’s consent having been invalid.
It was further submitted on behalf of the bank that even if the consent were held to be invalid an order for possession of the land should nonetheless be made excluding the family home. It was argued that s. 3 made the charge void in respect of the interest in the family home only and did not affect the interest in the remainder of the land. This submission had not been made in the High Court and the defendants submitted that the Court should follow its well established jurisprudence that a matter which had not been raised at first instance should not be allowed to be argued on the appeal.
The Court has occasionally made exceptions to this rule but in my opinion it should not do so in the instant case. There is no evidence before the Court as to the boundaries of what the bank says would constitute the family home. Sub-section 2 of s. 2 provides that the family home “includes any garden or portion of ground attached to and usually occupied with the dwelling or otherwise required for the amenity or convenience of the dwelling.” Before this Court could enter on a consideration of this submission, it would have been necessary that the High Court should have decided how much of the land should be included with the dwelling as forming part of the family home. If that had been done, and the issue had been argued, this Court could have considered the point, but since there has been no finding as to what constitutes the family home, this is not possible.
It was submitted on behalf of the respondents that the charge constituted a single conveyance which could not be severed. This view found favour with Costello J. (sitting as a judge of the Supreme Court) in Hamilton v. Hamilton  [1982] I.R. 466 where a wife was refusing to consent to a conveyance of a holding of 215 acres which included a family home. Costello J. said in his judgment at p. 490:-
“The effect of the proposed conveyance will be to convey this family home, even though there will be conveyed with the family home additional land which may not form part of it. Once a proposed conveyance includes a family home then, it seems to me, the provisions of s. 3, sub-s. 1 of the Act of 1976 apply to it and the written consent mentioned in the subsection is required – unless the transaction falls within one of the four exceptions set out in the section.
No arguments were advanced to support the alternative plea that the Court should sever the property and decide that written consent was required to a conveyance of the portion of the property comprising the family home but that no such consent was required to a conveyance of the remainder of the property. I do not think that such a contention is sustainable. I am satisfied that the Court is concerned with a proposal to convey a family home within the meaning of the Act of 1976 and that the written consent of the non-disposing spouse to this proposed conveyance is being withheld.”
Since I am rejecting the bank’s submissions for the reasons I have already given, it is not necessary to decide whether it would have been possible to sever the charge and declare it void in respect of the family home only. My inclination would be to agree with the view expressed by Costello J. but I think it preferable to reserve this point for decision on another occasion when the matter would be fully argued.
Counsel for the bank referred the Court to an unreported decision of Johnson J. in the case of Bank of Ireland v. Slevin  [1995] 2 I.R. 454 which was a circuit appeal in which judgment was given on the 16th February, 1989. In that case the bank had been given a charge by way of deposit of title deeds on a farm which included the family home. The charge had been created in September, 1977, by the defendant and it would appear that it did not have the prior consent in writing of his wife. Johnson J. held that the charge could be severed with the result that it was void in respect of the family home only. As I have already indicated, I am not going to decide the issue of severance in the instant case so I express no view on the correctness or otherwise of Johnson J.’s decision, but the manner in which he dealt with the issue would support my conclusion that the Court could not make an order of severance in the instant case. Having indicated that he would grant a charge on such portion of the lands as did not comprise the family home, Johnson J. went on to say at p. 458 of the report:
“But I require a proper map to be produced setting out clearly the
family home, the offices attached thereto, the land which constitutes the amenity and convenience thereof including the avenue which Mr. Slevin has indicated is not contained in the map. The map itself I find quite inadequate and in the event of it being difficult to make a map then it should have been done by way of aerial photography.”
This passage indicates the type of evidence which ought to have been given in the High Court if this contention was going to be made. The question of the extent of the family home would then have become an issue and the High Court could have made a finding on it based on the evidence. In the absence of such a finding it is not possible now for this Court to consider the issue.
I would dismiss the appeal and confirm the decision of the learned High Court Judge.