Aidan Murphy v Hilary Hooton

• Jurisdiction: Ireland
• Judge: Mr Justice Michael Peart
• Judgment Date: 22 May 2014
• Neutral Citation: [2014] IEHC 266
• Docket Number: Record Number: No. 14099P/2013
• Court: High Court
• Date: 22 May 2014

Murphy v Hooton

Between:

Aidan Murphy

Plaintiff

And

Hilary Hooton

Defendant

[2014] IEHC 266

Record Number: No. 14099P/2013

THE HIGH COURT

Mortgage – Loans – Receiver – Securing Property – Business – Lease – Tenancy – Consent – New Tenancy – Entitlement to occupation - Mandatory Interlocutory Injunction – Trespass – Consent of Mortgagee

Facts: The defendant occupied premises which comprised part of the security for loans advanced by Irish Nationwide Building Society to her husband and son (borrowers) under a Mortgage Deed. The loans and mortgage were acquired by National Asset Loan Management (NALM) under the terms of the National Asset Management Agency Act 2009 (2009 Act). NALM appointed the plaintiff as statutory receiver over the premises charged under the mortgage. The receiver requested Mr Mc Donald to attend and secure the property together with other premises subject to the mortgage. It then came to light the property had been used as overnight temporary accommodation for the homeless. The defendant informed Mr McDonald she was running a business from the premises but that she had no lease or tenancy agreement from the borrowers. Mr McDonald changed the premises locks and gave the defendant a key. The receiver wrote to the defendant asking for particulars of her claim upon which she claimed to be entitled to occupation of the property. No reply was received until after the proceedings herein and Notice of Motion were issued. The borrower”s Solicitors wrote to Mr Ben Donoghue of Irish Bank Resolution Corporation(IBRC) advising the defendant had no interest in the property by virtue of business equity or otherwise and IRBC responded advising they had received no evidence the defendant held any interest in the property. The defendant swore a replying affidavit on the 20^th March 2014, resisting the plaintiff”s application for an injunction and alleged trespass of the property. The defendant asserted she was the occupier of the property and that since she took over the business from her husband in February 2008, she carried on the business of providing emergency accommodation in the premises. The defendant alleged the IBRC was aware of her tenancy and control of her business and the plaintiff did not swear any affidavit contending the defendant”s allegation. Both parties agreed the mortgage predated the commencement of the Land and Conveyancing Law Reform Act 2009, that it had no application to the facts herein, that save in some limited circumstances a tenancy between the owner/borrower and a tenant without prior consent in writing of the mortgagee will in light of a clause such as 11(L) of the mortgage be void as against the mortgagee. Counsel for the defendant discussed the case of Fennell & ACC Bank v N17 Electronics Ltd (in liquidation) [2012]. Mr Justice Michael Peart discussed the case of Iron Trades Employers Assurance association Ltd v Union Land and House Investors Ltd [1937] Ch. 313 and Re O”Rourke”s Estate [1889]. Counsel for the defendant submitted the defendant had paid an agreed sum of rent into her husband”s loan account each month. Counsel for the plaintiff submitted this was insufficient to create a new tenancy.

Mr Justice Michael Peart held a verbal agreement existed between the defendant and her husband. No transparent engagement existed between the borrowers and the bank or between the defendant and the bank as regards any tenancy arising. Mr Justice Michael Peart held the evidence of consent and the agreed terms must be clear, the onus is on the defendant to establish these matters and based on the evidence there was no prospect of a successful defence to the plaintiff”s strong claim for possession. Mr Justice Michael Peart discussed the case of Patel and others v W.H.Smith (Eziot) Ltd [1987]and referred to Campus Oil principles, stating a higher test of arguability must be established by a plaintiff who sought a mandatory interlocutory injunction, together with a case likely to succeed. Mr Justice Michael Peart followed the Patel principles and held he would make an order in terms of paragraphs 1, 2, 3 and 4 of the Notice of Motion and postponed the perfection of any order for at least a week as regards the forthwith delivery of possession and keys.

Order according to paragraphs 1, 2, 3 and 4 of the Notice of Motion granted

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S147

LANDLORD & TENANT (AMDT) ACT 1980 PART II

LANDLORD & TENANT (AMDT) ACT 1980 S13(1)(A)

LANDLORD & TENANT (AMDT) ACT 1980 S5

LAND & CONVEYANCING LAW REFORM ACT 2009

FENNELL & ACC BANK PLC v N17 ELECTRICS LTD (IN LIQUIDATION) UNREP DUNNE 11.5.2012 2012/15/4218 2012 IEHC 228

IRON TRADES EMPLOYERS INSURANCE ASSOCIATION LTD v UNION LAND & HOUSE INVESTORS LTD 1937 CH 313 1937 1 AER 481

O'ROURKE'S ESTATE, IN RE 1889 23 LRI 497

PATEL v WH SMITH (EZIOT) LTD & ANOR 1987 1 WLR 853 1987 2 AER 569

LINGHAM v HEALTH SERVICE EXECUTIVE 2006 17 ELR 137 2005/36/7565 2005 IESC 89

Judgment of

Mr Justice Michael Peart

1 The defendant is in occupation of a premises ("the property") which comprises part of the security for certain loans advanced by Irish Nationwide Building Society to her husband and son ("the borrowers") under a Deed of Mortgage dated 25^th June 2001.

2 The loans and the mortgage were acquired by National Asset Loan Management ("NALM") a NAMA Group entity under the terms of the National Asset Management Agency Act 2009 ("the Act of 2009")

3 The plaintiff is the statutory receiver appointed by NAMA on the 8^th July 2013 pursuant to section 147 of the Act of 2009 over these premises and others charged under the said mortgage as security for the loans, the borrowers having committed acts of default,

4 Upon his appointment, the receiver requested a Mr McDonald of Crowe Howarth to attend at the property and secure possession of same, as well as the other premises the subject of the said mortgage. Those other premises are not the subject of the present application for an injunction to restrain trespass and to deliver up possession.

5 When Mr McDonald called to the property on the 8^th July 2013 in order to take possession and secure same he discovered that the plaintiff was the only person there, and he found also that the property has been divided up into a number of 'bedsits' which are used as overnight temporary accommodation for the homeless, in respect of which the defendant is in receipt of monies from Dublin City Council.

6 The defendant informed Mr McDonald at that time that she was running a business from the premises but that she did not have a lease or other written tenancy agreement from the borrowers. In the circumstances, Mr McDonald changed the locks to the premises but gave a key to the defendant as a matter of courtesy.

7 Later the same day the receiver wrote to the defendant asking her to set out the basis of any claim by which she maintained an entitlement to be in occupation of the property. No reply was received to that letter or to another letter written to her on the 17^th July 2013 requesting a timeline for the delivery up of possession. That remained the position until after the present proceedings and Notice of Motion were issued. It is only in her replying affidavit to the present application for injunctive relief - in effect seeking a mandatory order for possession - that the receiver has learnt that the defendant seeks to substantiate her claim to be entitled to be in possession by asserting the existence of an oral tenancy with the owners which first arose in 2008, and given the passage of time since 2008 that she is entitled to a continuation of that tenancy on the basis of a "business equity".

8 I should however note that the borrowers' solicitors (the same solicitors as now act for the defendant) did write to Mr Ben Donoghue of Irish Bank Resolution Corporation by letter dated 8^th April 2013 in which, inter alia, he stated:

"I have discussed the position of Hilary Hooton separately with her. It is my opinion that Hilary has long term rights in the above premises by virtue of her 'business equity' or otherwise. I do not wish to represent Hilary to clarify her rights to her as she needs independent legal advice on the matter and I understand she is to seek such advice over the next few days but she requested me to inform you of her intentions in this regard."

9 It was pointed out by Hilary that her business at South Circular Road provides the vast bulk of the payments being made to IBRC."

10 IBRC replied to that letter by stating, inter alia:

"We have never been provided with evidence that Hilary Hooton holds any interest in the property …… and accordingly how she can have acquired long term rights to this property is something that is inconceivable. Your clients will fully appreciate, as per the terms of the security granted in favour of Irish Nationwide Building Society (at the time) that they are not entitled to let the secured property. The consent of this Bank was not provided to any such lease under the terns of the security granted in favour of Irish Nationwide Building Society which they are obliged to as it was known at the time the security was provided."

11 9. The receiver maintains the position that Irish Nationwide Building Society had no notice of any such tenancy, and that its written consent was neither sought nor given in respect of any such tenancy, and in that regard has referred to Clause 11 (L) of the mortgage deed which contains the usual covenant against assignment or sub-letting by the borrowers other than with the bank's prior written consent:

"Not to assign or let or part with the possession of the mortgaged property or any part thereof without the prior consent in writing of the Society and further that the mortgagor shall not exercise the statutory power of leasing or agreeing to lease or accepting or...