Castletown Foundation Ltd v Magan
| Jurisdiction | Ireland |
| Judge | Ms. Justice Faherty |
| Judgment Date | 21 December 2020 |
| Neutral Citation | [2020] IECA 363 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Appeal Number: 2019/427 |
[2020] IECA 363
Whelan J.
Faherty J.
Binchy J.
Appeal Number: 2019/427
THE COURT OF APPEAL
Residential tenancy – Irregularly obtained judgment – Remittal – Appellant appealing against the judgment and order of the High Court refusing him relief pursuant to Part II of the Landlord and Tenant (Amendment) Act 1980 – Whether the judgment of the High Court was obtained irregularly
Facts: The defendant/appellant, Mr Magan, appealed to the Court of Appeal against the judgment and order of the High Court (Hunt J) dated 10 September 2019 refusing him relief pursuant to Part II of the Landlord and Tenant (Amendment) Act 1980 as amended and holding that his residential tenancy was validly determined under the provisions of the Residential Tenancies Act 2004, that he did not enjoy any right of relief against forfeiture and that he had not established any other legal right to occupation or possession of the property in question. Arising from the parties’ submissions, the issues which arose for consideration were twofold. Firstly, whether the judgment of Hunt J should be set aside on the ground that it was obtained irregularly. Secondly, even if the judgment was obtained regularly, whether the matter should nevertheless be remitted to the High Court to prevent any possibility of injustice to the defendant on the basis that the merits of the defendant’s defence mandate such a course.
Held by Faherty J that no unfairness could be said to accrue to the defendant by dint of documents being put before the Court immediately prior to the hearing commencing without the defendant having had the opportunity to consider the documents. The documents furnished comprised the December 2010 Letting Agreement, the First Notices of Termination and the Second Notice of Termination. Faherty J found that these documents were well known to the defendant. Faherty J was satisfied that the decision to proceed with the trial was entirely within the proper discretion of the trial judge; it follows that the judgment rendered by the trial judge on 10 September 2019 was regularly obtained. Faherty J perceived no procedural unfairness in the manner in which it was obtained; accordingly, there were no grounds upon which the Court should set aside the judgment on the basis that it was irregularly obtained. Faherty J held that the defendant had not shown the Court that he had a good defence on the merits or that he had a defence which had a reasonable prospect of success as the jurisprudence demands (The Saudi Eagle [1986] 2 Lloyd’s Rep 221, approved by Peart J in Allied Irish Banks Plc v Lyons [2004] IEHC 129). Accordingly, Faherty J found no basis for the Court to remit the matter to the High Court for trial. Faherty J held that it was not necessary to consider the implications of the defendant’s bankruptcy on the proceedings or how the Court might have exercised its discretion to remit the matter had the defendant met the reasonable prospect of success threshold.
Faherty J held that the appeal would be dismissed.
Appeal dismissed.
This is the defendant's appeal of the judgment and order of the High Court (Hunt J.) dated 10 September 2019 refusing him relief pursuant to Part II of the Landlord and Tenant (Amendment) Act 1980 as amended (“the 1980 Act”) and holding that his residential tenancy was validly determined under the provisions of the Residential Tenancies Act 2004 (“the 2004 Act”), that he did not enjoy any right of relief against forfeiture and that he had not established any other legal right to occupation or possession of the property in question.
The relevant background (paras. 3-36 hereof) is for the most part derived from the judgment dated 21 November 2018 delivered by Haughton J. in the proceedings.
The proceedings concern a property known as Castletown Cox House and Estate, County Kilkenny. In 1991, the defendant, who is a life peer in the United Kingdom, purchased the property through Castletown Estates Limited (“CEL”). Throughout the 1990s, he purchased surrounding farmlands, resulting in a total acquisition, to include Castletown Cox House, of 513 Acres. It is acknowledged by all concerned that Castletown House is one of Ireland's few surviving great Georgian Houses. Since 1999, substantial sums have been spent on the refurbishment and modernisation of the property.
The defendant arranged for Castletown House and Estate to be transferred into a trust-Eaglehill Trust-for two of his children, Henrietta Black (née Magan) and Edward Magan. The current trustee (having been appointed on 4 April 2013) is Yew Tree Trustees Limited (formerly DW Trustees Limited). The trust is administered in Jersey.
The plaintiff is a limited liability company registered in the British Virgin Islands. It is the owner of Castletown House and Estate. In turn, the plaintiff is owned and controlled by the trustee. CEL manages Castletown House and Estate on behalf of Eaglehill Trust.
While the defendant's primary home is in London, Castletown House has been a secondary home for the Magan family since in or about the 1990's.
By Letting Agreement dated 15 December 2010, the plaintiff let Castletown House and some 53.61 acres of land to the defendant for a term of three years, terminating on 12 December 2013, at a rent of €100,000 per annum together with VAT, payable by monthly instalments (“the Letting Agreement” or “the December 2010 Letting Agreement”). The Letting Agreement appears to have replaced an existing business tenancy concluded between the parties in 2004.
Pursuant to clause 2.1 of the Letting Agreement, the defendant agreed to pay the rent at the time and in the manner specified in the agreement. Under Clause 2.7 he agreed not to reduce any payment of rent by making any deductions therefrom or setting off any sum against rent. Pursuant to Clause 2.17 he agreed “to use the property as a residence only for the first named tenant and his dependants.” Clause 4 provided, inter alia, that whenever the tenant was seven days late in paying any rent, even if it was not formally demanded, the landlord may end the tenancy by giving the tenant not less than four weeks written notice. Any such termination would not cancel any outstanding obligations owed by the tenant to the landlord.
Notwithstanding Clause 2.17, the tenancy was not registered with the Residential Tenancies Board (“RTB”).
It is common case that on the expiry of the term of the tenancy on 12 December 2013 the defendant continued in occupation of the demised property on foot of a tenancy from year to year, arising by implication. It is also the case that the last rent payment or contribution to rent was in July 2012. As set out in the judgment of Haughton J., as of 12 April 2018 the total sum due in respect of rent was €571,893 exclusive of interest. The defendant did not dispute those figures. It is the case that the defendant raised a counterclaim in the within proceedings alleging breach of contract on the part of the plaintiff under which the parties had made an agreement in 2005 for the upkeep and maintenance of Castletown House. In an affidavit sworn 31 August 2018, the defendant averred that the plaintiff had failed to pay any sum in respect of the upkeep and maintenance from 2017 onwards in contrast to payments made by the defendant which were put at €361,167.72. As found by Haughton J., the running expenses of Castletown House are significant, being in the order of €500,000 per annum.
It appears that in or about mid-2015, the trust's primary lender, Sancus Jersey Limited (Sancus), was expressing serious concern to the trust in respect of accumulating debt. It indicated that unless a resolution was found it would call in the security held, namely Castletown House and Estate. This triggered a process of consultation by the then trustee with the defendant and the beneficiaries of the trust. Following these consultations, on 3 October 2016 the defendant advised the trustee of arrangements being progressed whereby Castletown House Estate would be acquired at fair market value out of the trust ownership. According to the defendant, this was most likely going to be achieved through a financing of the Irish Heritage Preservation Trust. The defendant further advised that if by Friday 14 April 2017 the acquisition had not concluded, the trustee would need to seek a sale to a third party.
The April 2017 deadline passed without the defendant's proposal coming to fruition. Notwithstanding the correspondence of 3 October 2016, post April 2017, the position being adopted by the defendant and Mr. Edward Magan was that the trustee should proceed by way of sale of certain real estate in the UK instead of the Castletown Estate. However, the plaintiff did not agree with the defendant's stance and accordingly proceedings were brought in the Royal Court of Jersey (“the Jersey Court”) by the plaintiff seeking approval in principle for the sale of the Castletown Estate. Those proceedings, in which the defendant and Mr. Edward Magan were both represented, were heard on 4 July 2017. On that date the Jersey Court, inter alia, approved the plaintiff's decision to market Castletown House and Estate.
On 6 July 2017, Mr. Edward Magan instituted High Court proceedings in this jurisdiction seeking to restrain the marketing and sale of Castletown Cox. These proceedings were initially stayed pending mediation which took place in London and led to a mediation agreement on 26 September 2017 under which the plaintiff could continue marketing the property but same would not be sold pending consideration of any refinancing proposal that the defendant and Mr. Edward Magan might put forward.
However, on the basis of no realistic...
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Castletown Foundation Ltd v Magan
...on which the defendant was entitled to possession or occupation of the property. This court dismissed an appeal against that decision ( [2020] IECA 363). The moment, as it were, has Appeal against summary judgment 12 . To address the appeal against the grant of summary judgment, it is neces......