Allied Irish Banks Plc v Fitzgerald

CourtHigh Court
JudgeMr. Justice Garrett Simons
Docket Number2019 No. 232 SP

[2021] IEHC 172


Garrett Simons

2019 No. 232 SP

JUDGMENT of Mr. Justice Garrett Simons delivered on 22 March 2021

These proceedings seek to recover the possession of land pursuant to a mortgage entered into between the plaintiff bank and the defendant. By reserved judgment delivered on 27 April 2020, Allied Irish Bank plc v. FitzGerald [2020] IEHC 197, this court held that the bank was entitled to an order for possession subject to a stay on execution. The parties (including the reputed lessee of the mortgaged property) were requested to correspond with each other with a view to agreeing the length of the stay. In default of agreement, the court was to rule on the matter.


In the event, a more fundamental disagreement arose between the parties. The reputed lessee, Ms. Eileen Daly, contends that she continues to enjoy a right to possession of the mortgaged property by virtue of the lease agreement entered into between her and the defendant. This right of possession can, it is said, only be lawfully terminated in accordance with the Residential Tenancies Act 2004 (as amended). This, it is said, would necessitate the bank, qua landlord, serving a notice of termination with a notice period of not less than 244 days.


In response, the plaintiff bank submits that it is not bound by the Residential Tenancies Act 2004 in circumstances where the lease is said to be void against it for having been granted in breach of the terms of the mortgage.


For ease of exposition, the parties will be described in the balance of this judgment by reference to their relationships to each other. The plaintiff will be referred to as “ the Bank”; the defendant as “ the Borrower”; and the notice party as “ the Lessee”. The latter term is used in preference to the more cumbersome formulation “the reputed lessee”. However, it should be emphasised that, in circumstances where the precise status of the lease vis-à-vis the Bank is very much in dispute, the use of the term “the Lessee” should not be understood as implying any finding on this issue.


The lease agreement said to have been entered into between the Borrower and the Lessee, for a term of 35 years commencing on 3 April 2002, will be referred to as “ the 2002 lease agreement” where convenient.


The application for an order for possession had come on for hearing before me on 9 March 2020. There was no appearance on that occasion on behalf of the Borrower. It was explained to the court that the Borrower had been adjudicated bankrupt, and a letter was exhibited from the Official Assignee indicating that he was not opposing the application.


Having heard detailed submissions from counsel for the Bank, I indicated that I would reserve judgment on the matter. The judgment was delivered, subsequent to the Easter vacation, on 27 April 2020 (“ the principal judgment”). As appears from the principal judgment, one of the issues expressly addressed is the status of the lease said to have been entered into between the Borrower and the Lessee.


For the reasons explained in detail in the principal judgment, I concluded that the lease is void as against the Bank. This is because the Borrower did not have authority to enter into a lease of the mortgaged property without the written consent of the Bank. The statutory power, which the Borrower, as mortgagor, would otherwise have enjoyed under the Conveyancing and Law of Property Act 1881 (“ the Conveyancing Act 1881”) had been qualified as follows under the mortgage deed.

“The Mortgagor shall not be entitled without the consent in writing of the Bank to exercise the powers vested in him by section 18 of the said Conveyancing Act of 1881 so long as any moneys shall remain unpaid on this present security.”


There was nothing in the papers before the court on 9 March 2020 to suggest that the Bank had consented to the lease. This remains the position some twelve months later. Despite her asserted intention to have the Borrower set out the factual position on affidavit, the Lessee has not adduced any evidence to support her contention that the Bank had consented to the lease. The onus of proof lies with the Lessee: see Fennell v. N17 Electrics Ltd [2012] IEHC 228; [2012] 4 I.R. 634 (citing Taylor v. Ellis [1960] 1 Ch. 368).


As appears from the principal judgment, I had also been satisfied that the proceedings had been properly served. I was, however, anxious to ensure that the Lessee, Ms. Eileen Daly, be served with a copy of the principal judgment and afforded an opportunity to make submissions on the length of the proposed stay on execution. It will be recalled that April 2020 coincided with the beginning of the restrictions introduced in response to the coronavirus pandemic. Given the very real practical difficulties which those restrictions would present for the sourcing and securing of alternative residential accommodation, it seemed appropriate to grant a longer stay than the three month period typically allowed.


A copy of the principal judgment was duly served on the Lessee. In response, the Lessee swore an affidavit explaining that she had not been served with the pleadings prior to the hearing on 9 March 2020, and requesting an opportunity to be heard on the question of the validity of the lease.


It appears from the affidavits filed by Ms. Daly that—contrary to the Bank's understanding—the Lessee has not been in occupation of the mortgaged property for a number of years. It seems that the dwelling has, at various points, been occupied by persons described as sub-tenants of the Lessee. Most recently, the mortgaged property is said to be subject to a caretaker agreement. This has not, however, been confirmed on affidavit.


At all events, rather than become embroiled in technical arguments as to whether the proceedings had been properly served on every person in actual possession, or in receipt of the rents and profits, of the mortgaged property, as required by the Rules of the Superior Courts, I indicated that the Lessee would be afforded an opportunity to make written and oral submissions on the question of whether she could rely on the lease as against the Bank. This was done in circumstances where no order had yet been drawn up pursuant to the principal judgment, and the proceedings were not yet finalised. It would be open to this court, having heard submissions from the Lessee, to revisit the principal judgment and to reach different findings if appropriate.


Directions were given to ensure that the Lessee, Ms. Daly, received a full set of pleadings and a copy of the transcript of the hearing on 9 March 2020. Thereafter, the hearing of the Lessee's application to revisit the principal judgment had been adjourned on a number of occasions to facilitate Ms. Daly who, at that time, had been representing herself.


A solicitor came on record for the Lessee on 25 February 2021 and instructed counsel to request a further adjournment. I acceded to this request. The matter ultimately came on for hearing before me on 15 March 2021, at which stage Ms. Daly was represented by solicitor and counsel. Both sides had filed very helpful written legal submissions, which were read by the court in advance, and these submissions were elaborated upon at the hearing. I reserved judgment to today's date.


(i). Lessee


The argument made on behalf of the Lessee may be summarised as follows. It is submitted that the Lessee enjoys security of tenure as a tenant under Part 4 of the Residential Tenancies Act 2004 (“ the RTA 2004” where convenient). A residential tenancy may only be terminated in accordance with Part 5 of that Act.


Counsel places particular emphasis on the wording of section 59 of the RTA 2004 as follows.

“59.—Subject to section 60, neither—

(a) any rule of law, nor

(b) provision of any enactment in force immediately before the commencement of this Part,

which applies in relation to the termination of a tenancy (and, in particular, requires a certain period of notice or a period of notice ending on a particular day to be given) shall apply in relation to the termination of a tenancy of a dwelling.”


(Section 60 addresses the contingency where a tenancy agreement requires a greater period of notice to be given by a notice of termination than that required by Part 5).


Counsel submits that section 59 of the RTA 2004 precludes reliance on “any rule of law” or “any enactment” to avoid the requirements of Part 5. It is said to follow that the provisions of section 18 of the Conveyancing Act 1881 cannot be relied upon to terminate a residential tenancy. It is further submitted that the case law relating to negative pledge clauses in leases of commercial premises has no application in the context of a residential tenancy. It is sought to distinguish the judgment in Fennell v. N17 Electrics Ltd and subsequent case law on this basis.


More generally, the judgment of the High Court (Baker J.) in Hennessy v Private Residential Tenancy Board [2016] IEHC 174 is cited as authority for the proposition that security of tenure for a tenant is of the first importance, and that the residential tenancies legislation must be construed to give effect to this where there is any ambiguity. The judgment of the ECtHR in McCann v. United Kingdom (2008) 47 EHRR 913 is also cited as emphasising the requirement for proportionality in any decision involving the loss of an individual's home.


Applying the above analysis to the facts of the present case, it is said that the 2002 lease agreement may only be lawfully terminated by the Bank notifying the Lessee of its intention to enter into a contract for the sale of the property (in accordance with...

To continue reading

Request your trial
1 cases
  • Allied Irish Banks Plc v Fitzgerald
    • Ireland
    • High Court
    • 26 March 2021
    ...seeking costs – Whether a stay should be placed upon the orders pending an appeal Facts: The High Court (Simons J), on 22 March 2021 ([2021] IEHC 172) (the supplementary judgment) decided that the notice party, Ms Daly, the reputed lessee, did not have a right to possession of the mortgaged......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT