The Gazette 1983

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INCORPORATED LAW SOCIETY OF IRELAND
GAZETTE
Vol. 77. No. 7.
In this issue
September 1983
Comment
Comment 175
St. Louis University Law School seeks
'A Little Irish' Collection 185
^ Mayo/Galway Golfing Society
189
- SYS Transcript Service 189
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. '
Published at Blackhall Place. Dublin 7.
Saving Their Deposits?
That 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