Connolly v BRGA Ltd T/A BRG Gibson Auctions and Others

• Jurisdiction: Ireland
• Judge: Ms. Justice Eileen Roberts
• Judgment Date: 07 June 2023
• Neutral Citation: [2023] IEHC 304
• Court: High Court
• Docket Number: 2022 No. 2013P

Between

Irene Connolly

Plaintiff

and

BRGA Limited T/A BRG Gibson Auctions, Ken Fennell, James Anderson and Start Mortgages Designated Activity Company

Defendants

[2023] IEHC 304

2022 No. 2013P

THE HIGH COURT

Interlocutory relief – Injunction – Possession of property – Plaintiff seeking an injunction restraining the defendants from taking possession of the property and/or marketing for sale and/or selling or taking any steps to sell the property pending the trial of the action – Whether relief ought to be refused on the grounds of delay

Facts: The plaintiff, Ms Connolly, applied to the High Court for interlocutory relief against the defendants, BRGA Ltd, Mr Fennell, Mr Anderson and Start Mortgages DAC, concerning a property in Monaghan comprised in Folio MN7213F. The relief sought was for an injunction restraining the defendants from taking possession of the property and/or marketing for sale and/or selling or taking any steps to sell the property pending the trial of the action. The plaintiff relies on the framework set out by O’Donnell J in Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd [2019] IESC 65 and the case of AIB v Diamond [2012] 3 IR 549 with its emphasis on the court taking into consideration the outcome which achieves the least risk of injustice pending a full hearing of the issues at trial. The defendants agreed with the legal principles for interlocutory relief. However, they disagreed with the plaintiff as to how those principles should be applied to the facts of the case. Furthermore, the defendants urged the court to refuse relief on the grounds of delay.

Held by Roberts J that as counsel for the defendants acknowledged at the hearing that the plaintiff had raised fair issues, the case turned on a consideration by the court of the balance of convenience/balance of justice. Roberts J noted that the factors in favour of granting the interlocutory relief sought included the following: (1) if the receivers were permitted to sell the property, it would be lost to the plaintiff even if she succeeded at trial; (2) the plaintiff averred in para. 7 of her supplemental affidavit sworn 2 June 2022 that “substantial payments have been made to the loan account over the years since the inception of the loan, indeed totalling the overall sum of €94,033.33 by my calculations, which is significantly in excess of the principal loan monies of 77,400”; (3) the balance outstanding on the loan was substantially less than the value of the property; (4) the fact that the value of the property more than covered any arrears outstanding on the loan provided a level of comfort to the defendants in respect of the undertaking as to damages given by the plaintiff; and (5) the status quo was that the receivers were unable to sell the property. Roberts J noted that the factors which weighed against granting the interlocutory relief sought included the following: (1) there had been a considerable delay by the plaintiff in the case; (2) while there had been ad hoc payments made by the plaintiff, the defendants said the loan had been in default for almost a decade, as it was not repaid at the end of the original ten-year term; (3) the status quo appeared to be that the receivers were in possession and unable to sell the property pending trial.

Roberts J held that, balancing the various factors outlined above, the least risk of injustice would be achieved by preventing the sale of the property pending trial. Roberts J granted the plaintiff the interlocutory relief she sought subject to the following conditions: (1) the existing order should be varied so that it no longer prohibits the receivers from taking possession of the property; (2) the plaintiff should continue to honour her undertaking to discharge the sum of €400 per month to the fourth defendant pending trial; and (3) the parties must agree a timetable to take the matter to trial expeditiously.

Application granted.

JUDGMENT of Ms. Justice Eileen Roberts delivered on 7 June 2023

Introduction

1 . This is the plaintiff's application for interlocutory relief against the defendants concerning a property in Monaghan comprised in Folio MN7213F (the “ Property”). There is also a second motion before the court in relation to the plaintiff's failure to deliver a statement of claim. In circumstances where a statement of claim was delivered the day before the hearing, that second motion did not trouble the court. The focus of this judgment therefore relates to the plaintiff's application for interlocutory relief.

2 . It is common case that the Property is not the plaintiff's family home. It is one of a number of residential investment properties owned by the plaintiff and was, until March 2022, occupied by a tenant. The Property has remained unlet since that date.

3 . In 2004, the plaintiff, who is now retired, borrowed €77,400 from Irish Life and Permanent plc (“ PTSB”) on foot of a loan offer letter dated 12 February 2004 (the “ Loan”) secured by a mortgage dated 29 March 2004 (the “ Mortgage”). The plaintiff was registered as owner of the Property on 3 June 2010 and the Mortgage was also registered as a charge in favour of PTSB on the folio for the Property on 3 June 2010.

4 . In February 2019, PTSB transferred its interest in the Loan and Mortgage to the fourth named defendant who, on 27 March 2019, became the registered owner of the former PTSB charge on the Property, with the entry on the folio noting that “ the ownership of this charge has been transferred”.

5 . On 26 May 2021, a letter of demand was sent by the fourth named defendant to the plaintiff calling for payment in the sum of €32,912.64, representing the outstanding balance on the Loan as at 30 April 2021. No payments were made by the plaintiff on foot of that letter of demand.

6 . By deed of appointment dated 4 November 2021 (the “ Deed of Appointment”), the second and third named defendants (the “ Receivers”) were appointed by the fourth named defendant as receivers over the Property. The Receivers accepted their appointment on 30 November 2021.

7 . Subsequently, the Property was marketed for sale by the Receivers in a public auction commencing at noon on Thursday, 26 May 2022 for the sum of €100,000. The first named defendant is the firm of auctioneers who were involved in that auction process. On 25 May 2022, the plaintiff applied ex parte for an injunction to prevent the sale, which application was refused by O'Moore J. The court however gave the plaintiff liberty for short service of a Notice of Motion for an interlocutory injunction returnable for the following morning at 10am. On 26 May 2022 that motion was heard by Dignam J in circumstances which will be set out in more detail in this judgment. The hearing obviously took place with some considerable degree of urgency given that the auction was to commence at 12 noon that day. While the defendants' solicitors had been served with papers by email the previous afternoon and had prepared an unfiled replying affidavit for the purpose of the court hearing on 26 May, it was not possible on timing grounds for them to have comprehensive evidence before the court on 26 May 2022. Dignam J granted the plaintiff injunctive relief and the Property was withdrawn from auction immediately thereafter.

8 . In those circumstances, while both parties were represented before Dignam J, the hearing before him was in reality an interim hearing. Further affidavits were exchanged between the parties following the Order of Dignam J. The interlocutory application proper was heard by this court on 18 May 2023, and is the subject of this judgment.

The plaintiff's application

9 . The Order of Dignam J made on 26 May 2022 is in the following terms: –

“…that the defendants and each of them their servants or agents be restrained until further Order of the Court from taking possession and/or marketing for sale and/or entering into contract for sale and/or completing any sale and/or selling [the Property]…”.

10 . The Order reflects the usual undertaking as to damages by the plaintiff but also includes an additional undertaking by her “… to pay €400 per month on the first day of each month to the Fourth Named Defendant”.

11 . There was some debate at the outset of the interlocutory hearing as to whether the plaintiff had complied with the terms of that undertaking. This would be of some importance in circumstances where the plaintiff was seeking to invoke the equitable jurisdiction of this court. While it is clear that there were some missed monthly payments, the affidavit filed by the plaintiff and sworn on 12 May 2023 provided an explanation for those delays and, importantly, confirmed that as at the date of the hearing of the interlocutory application all payments specified in the order of Dignam J had been made in full by the plaintiff. This court therefore proceeded on the basis that the plaintiff was not in breach of the Order of Dignam J.

12 . The plaintiff seeks interlocutory relief in the same terms as sought before Dignam J. In general terms, the relief sought is for an injunction restraining the defendants from taking possession of the Property and/or marketing for sale and/or selling or taking any steps to sell the Property pending the trial of this action.

There is one practical issue in relation to the Order currently in place and what is in fact the status quo. It appears to this court that the parties have, in reality, treated the Order as one solely directed to preventing the sale of the Property. It appears that the Receivers are in fact in possession of the Property albeit that strictly the Order prevents this. The Property has been unlet since March 2022 and remains vacant. The Receivers cannot do anything with the Property as the Order in place restrains the defendants from taking possession of it. On the other hand, the plaintiff is not in fact in possession of the Property....