Clarke and Another v Pepper Finance Corporation [Ireland] Designated Activity Company and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Cregan
• Judgment Date: 21 October 2025
• Neutral Citation: [2025] IEHC 564
• Docket Number: [HP 2025/793]

Between

Thomas Clarke and Catherine Clarke

Plaintiffs

and

Pepper Finance Corporation (Ireland) DAC and James Anderson

Defendants

[2025] IEHC 564

[HP 2025/793]

THE HIGH COURT

Judgment of Mr. Justice Cregan given on 21 ^st October, 2025

Introduction

1 . This is an application by the plaintiffs for an injunction prohibiting the defendants from selling a property known as The Cottage, Moone, County Kildare comprised in Folio KE10478F.

Background

2 . On 17 ^th July, 2007, the plaintiffs purchased a bungalow known as The Cottage, Moone, County Kildare registered under Folio No. 10478F. This purchase was financed by way of a loan of €400,000 from Leeds Building Society which was secured on a mortgage over the said property.

3 . Subsequently, the first defendant acquired the loan and the mortgage, and the first defendant was registered as the owner of the mortgage on the said property.

4 . The plaintiffs defaulted on their obligations under the loan, and as of 3 ^rd December, 2024, the plaintiffs' loan account had an outstanding balance of €538,231 (which included arrears of €134,436).

5 . On 3 ^rd December, 2024, the first defendant called in the loan and appointed the second defendant as receiver over the said property.

6 . On 17 ^th February, 2025, the plaintiffs brought an injunction application to restrain the sale which was made returnable to 3 ^rd March, 2025 (“the first application”). This application was grounded on the affidavit of Mr. Thomas Clarke, the first named plaintiff. That grounding affidavit was sparse and only consisted of three pages.

7 . When this matter came before the court on 3 ^rd March, 2025, the defendants gave undertakings not to market or sell the property pending the determination of the application for an interlocutory injunction. The court gave directions about filing of affidavits by the defendants and the plaintiffs. Subsequently, however. it emerged that the plaintiffs failed to abide by directions of the court on two separate occasions to file affidavits — in circumstances where they had the benefit of undertakings given by the defendant. In the circumstances, I released the defendants from their undertakings not to sell the said property.

8 . Subsequently, the defendants offered the property for sale and, as a result, the plaintiffs brought this second application for an injunction.

9 . On 4 ^th July, 2025, counsel for the plaintiffs applied to court for an early hearing date for their second interlocutory application for relief. Having considered the submissions from both sides, I granted liberty to the plaintiffs to issue a second motion seeking interlocutory relief returnable for 10 ^th July, 2025.

The hearing of the injunction

10 . The hearing of the injunction took place before me on a number of days in late July 2025. I was not satisfied about the state of the evidence on whether the property was landlocked. I adjourned the matter until 7 ^th October, 2025, and directed both parties to obtain experts' reports and to prepare clear maps which showed whether the property was landlocked. I also granted an injunction restraining the defendant from selling the property until the return date on 7 ^th October, 2025. I will come back to the issue of the experts reports later in this judgment.

The legal test for an injunction

11 . The legal test for an interlocutory injunction was recently restated by O'Donnell J (as he then was) in Merck Sharp & Dohme Corporation v. Clonmel Healthcare Ltd [2019] IESC at paragraph 64:

“Finally, at the risk of perhaps creating a further rule that will require subsequent qualification and correction, it may be useful to outline the steps which might be followed in a case such this:-

(1) First, the court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted;

(2) The court should then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanimid and Campus Oil approach will yield the correct outcome. However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;

(3) If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice;

(4) The most important element in that balance is, in most cases, the question of adequacy of damages;

(5) In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;

(6) Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial.

(7) While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;

(8) While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined.”

Analysis of whether there is a serious issue to be tried

The first issue — the first defendant does not have the power to appoint a receiver

12 . The first issue raised by the plaintiffs is that the first defendant does not have the power to appoint a receiver under the mortgage. However, it is clear that condition 14.5 of the mortgage conditions provides that the lender does indeed have the power to appoint a receiver to the property.

13 . I am satisfied that the plaintiffs' submissions on this issue are without substance.

The second issue – that the receiver does not have a power of sale

14 . The second issue raised by the plaintiffs is that the receiver does not have a power of sale. However, it is clear that condition 15.2 of the mortgage conditions provides that any receiver “shall have the power to exercise the rights referred to at condition 14.5”. Mortgage condition 14.5 includes a power of sale.

15 . I am satisfied therefore that the plaintiffs' submissions on this issue also are without substance.

The third issue – that the receiver is invalidly appointed

16 . The third issue raised by the plaintiffs was that the receiver was invalidly appointed. However, it is clear from the affidavit of Patrick O'Dwyer of 11 ^th March, 2025, for the defendants, that the plaintiffs were obliged to make monthly repayments on the loan and that the mortgage deed provides that failure to make monthly repayments would trigger acceleration repayment of the whole debt under paragraph 2(b) of the mortgage (and paragraph 3.1(b) of the mortgage conditions) and 14.4(a) of the mortgage conditions. These conditions state that the whole debt becomes immediately due and payable on default in paying two or more monthly payments. It is clear that the plaintiffs defaulted on their debt over a considerable period of time. On foot of their default, the first defendant issued demands to the plaintiffs on 3 ^rd December, 2024, and as a result of the plaintiffs' breach the whole debt became due and payable. As a result, the first defendant became entitled to appoint a receiver under paragraph 14.5 of the mortgage conditions.

17 . I am satisfied therefore that the plaintiffs' submissions on this issue also are without substance.

The fourth issue – that Pepper holds no interest in the mortgage dated 2nd October, 2007

18 . The next issue raised by the plaintiffs is that Pepper does not hold any interest in the mortgage dated 2 ^nd October, 2007. However, it is clear that Leeds Building Society transferred this loan and mortgage to the first defendant on 16 ^th November, 2018. The first defendant is now registered on the folio as the owner of the charge.

19 . Section 31(1) of the Registration of Titles Act, 1964 provides that the register shall be conclusive evidence of the title of the owner to the land as appearing on the register. (See also Tanager DAC v. Kane [2019] 1 IR 385. See also Bank of Ireland v. Cody [2021] 2 IR 381).

20 . I am satisfied that the plaintiffs' submissions on this issue also do not raise a fair question to be tried.

The fifth issue – the receiver was appointed over folio 10478 County Kildare not the property that is the subject matter of the mortgage

21 . The plaintiffs' fifth submission is that the receiver was not appointed over the correct property. The plaintiffs submit that the receiver was appointed over Folio 10478 County Kildare and not over Folio 10478F, the property which is the subject matter of the mortgage.

22 . It is clear, however, that this submission is also without substance. The property which was...