O'Brien v McMahon

• Jurisdiction: Ireland
• Judge: Ms. Justice Stack
• Judgment Date: 08 April 2022
• Neutral Citation: [2022] IEHC 246
• Court: High Court
• Docket Number: Record No. 2020/7827P

Between

Tom O'Brien, Hilary Larkin and Pepper Finance Corporation (Ireland) Designated Activity Company

Plaintiffs

and

Patrick McMahon and Patrick McMahon (as Administrator ad litem of Angela McMahon, deceased)

Defendants

[2022] IEHC 246

Record No. 2020/7827P

THE HIGH COURT

JUDGMENT of Ms. Justice Stack delivered on the 8 ^th day of April, 2022 .

Introduction

1 . The plaintiffs seek orders against the defendants restraining them from preventing, impeding, or obstructing the first and second named plaintiffs from taking possession of three properties (all described below), orders restraining the defendants from trespassing on those properties, orders compelling the defendants to forthwith deliver up to the plaintiffs or either of them all keys, fobs, magnetically readable cards, RFID devices, other electronic access devices, access codes and alarm codes in their possession, power and/or procurement relating to the property, and an order directing the defendants to deliver up to the plaintiffs or either of them forthwith all books and records held by them in relation to the properties to include but not limited to any purported licence(s) and/or tenancy agreement(s) in respect of the properties, and orders directing them to immediately cease occupancy of and to vacate the property.

2 . Sadly, the second defendant has died, and the first defendant is now sued as her administrator ad litem.

3 . The First Property, Clara House, 9 Castleknock Road, Dublin 15, is comprised in Folio DN25442F. The defendants are registered as full owners, and Bank of Scotland registered a charge over it on 9 May, 2006. On 25 April, 2014, the third plaintiff (“Tanager”) became registered as owner of that charge.

4 . The Second Property, 50 Castleknock Glade, Dublin 15, is comprised in Folio 59609F. Again, the plaintiffs are registered as full owners, a charge was registered in favour of Bank of Scotland (Ireland) Ltd on 26 October, 2006, and on 25 April, 2014, Tanager became registered as owner of that charge.

5 . The Third Property is 14 Castlegate Square, Adamstown Castle, Lucan, County Dublin, and is comprised in Folio 119451L of the register, County Dublin. The defendants are registered as full owners, a charge was registered by Bank of Scotland (Ireland) Ltd as a burden on the property on 20 September, 2007, and on 25 April, 2014, Tanager was registered as owner of that charge.

6 . I am satisfied from the affidavits filed on behalf of the plaintiffs in the within motion that loans advanced to the plaintiffs on foot of facility letters dated 3 August, 2003 and 21 July, 2005, in the case of the First Property, facility letter dated 6 December, 2005, in relation to the Second Property, and facility letter dated 17 May, 2006, in relation to the Third Property were secured on each of those properties, and monies are due and owing on foot of each of these loans, which are secured by the respective charges on the property, of which Tanager is the registered owner. Demand has been made for repayment of the loan and no repayment has been forthcoming.

7 . By three separate Deeds of Appointment, one in relation to each property, dated 1 August, 2019, the first and second plaintiffs have been appointed as joint receivers over the Properties.

8 . Under Clause 8.4 of the Deed of Mortgage in Charge dated 18 September, 2003, in relation to the First Property, the powers of a receiver include a power at para. (f) (x) to sell the property. By virtue of Clause 1.1 (v), “receiver” is defined as meaning a person who is appointed by the Bank in writing “to be the receiver and manager of all or any part of the Property”.

9 . The mortgage and charge dated 4 May, 2006, in relation to the Second Property contained, at Clause 8, a provision to the effect that the Bank's Home Mortgage Conditions would apply to the Mortgage and Charge as though they were set out therein in full and the borrower agreed that he/she had received a copy of the Conditions and had read and understood the Conditions after having been given a real opportunity to become acquainted with the Conditions. This Deed was executed by the defendants in the presence of their solicitor, who witnessed their signatures. Those Conditions are exhibited in the affidavits, and at Clause 1.1 (h), they contain the same definition of “Receiver” as is set out above in relation to the mortgage and charge relating to the First Property, and also contain the same power of sale at Clause 8.4 (f) (x).

10 . The Deed of Mortgage in Charge relating to the Third Property is dated 31 July, 2007 and is in the same format as the Mortgage and Charge relating to the Second Property, incorporating the Home Loan Mortgage Conditions, which are in the same terms as set out above in relation to the Second Property.

11 . The plaintiffs have submitted all of the essential proofs to show that the debt secured on each property is due and owing and unpaid notwithstanding demand, and that Joint Receivers have been appointed over each property on foot of the power to that effect in the respective Deeds of Mortgage and Charge in relation to each property.

12 . That being the case, I now turn to the points raised by the defendants to resist the application of the plaintiffs.

Points raised by the defendants

(i) Whether the relief is mandatory or prohibitory

13 . The defendants say that the plaintiffs must meet the test for mandatory relief, in accordance with judgment of the Supreme Court in Charleton v. Scriven [2019] IESC 28. It seems clear from para. 5.3 of the judgment of the Supreme Court in that case that many of the reliefs sought by the receivers in that case sought to direct that the rents due from the various properties, all of which were rented, should be paid to the receivers. This was interpreted as being an application for prohibitory relief, whereas those orders which amounted in substance to an order for possession were characterised as being mandatory.

14 . A similar situation would appear to apply in this case where, for example, in seeking an order to deliver up all keys, fobs, and other access cards and codes, as well as in seeking an order restraining the defendants from impeding the plaintiffs in taking possession, the plaintiffs are, in reality, seeking possession, and therefore mandatory relief. Accordingly, they must meet the higher test set out in Maha Lingham v. HSE [2005] IESC 89 and must show that they have a strong case that they are likely to succeed at the hearing of the action.

15 . Insofar, as the notice of motion, however, seeks an order restraining interference with the exercise by the plaintiffs of matters such as the collection of rent (which is not stated explicitly in the Notice of Motion), that application would be prohibitory in nature.

16 . It should be borne in mind that the plaintiffs are in possession of the Third Property, but not the first two. Although counsel for the plaintiff stated at hearing that he did not need an order for possession, I find it difficult to construe the notice of motion as seeking anything other than an order for possession. Furthermore, it is not clear that the first two properties are tenanted at the moment and therefore they appear to be in the possession of the defendants.

17 . In short, I am satisfied that the substance of this application is to regain possession of the First and Second properties, and to ensure that the plaintiffs' possession of the Third Property continues unimpeded by the defendants. Therefore, in respect of the First and Second properties, the application is mandatory in nature, whereas in respect of the...