O'Connor v Promontoria [Aran] Ltd ; M&F Finance (Ireland) Ltd v Promontoria [Aran] Ltd

• Jurisdiction: Ireland
• Judge: Ms Justice Eileen Roberts
• Judgment Date: 08 November 2022
• Neutral Citation: [2022] IEHC 616
• Court: High Court
• Docket Number: Record No. 2020/5065P

Between:

Thomas O'Connor

Plaintiff

and

Promontoria (Aran) Limited, Luke Charlton, Marcus Purcell and Ulster Bank Ireland Designated Activity Company

Defendants

M&F Finance (Ireland) Limited

Plaintiff

and

Promontoria (Aran) Limited, Ulster Bank Ireland Designated Activity Company, Luke Charlton and Marcus Purcell

Defendants

[2022] IEHC 616

Record No. 2020/5065P

Record No. 2021/852P

THE HIGH COURT

Injunctive relief – Appointment of receivers – Validity – Plaintiffs seeking injunctive relief – Whether receivers were validly appointed

Facts: The plaintiffs in each set of proceedings, Mr O’Connor and M&F Finance (Ireland) Ltd (M&F), issued motions on 7 October 2020 and 27 April 2021 respectively, seeking injunctive relief to, among other things, restrain the appointment of the second and third/third and fourth defendants, Mr Charlton and Mr Purcell, as receivers and/or the taking of any steps by the receivers to interfere with the plaintiffs’ rights over identified properties. The motion in the M&F proceedings also sought inspection of the documents giving effect to the alleged transfer of the interest in M&F’s loans and security to the first defendant, Promontoria (Aran) Ltd (Promontoria). The latter relief included a request for an order pursuant to Order 50, rule 4 of the Rules of the Superior Courts, s. 91 of the Land and Conveyancing Law Reform Act 2009 and/or the High Court’s inherent jurisdiction permitting inspection of all documents of title whereby the fourth/second defendant, Ulster Bank Ireland DAC (Ulster Bank), and Promontoria asserted that they were mortgagee to M&F as mortgagor. An order was also sought for inspection of all documents as were required to allow M&F to obtain legal advice as to whether Promontoria was the successor in title to Ulster Bank to the mortgagee’s interest in 61 Adelaide Road, Dublin 2, including a Global Deed of Transfer dated 12 February 2015 and all ancillary documents and agreements.

Held by Roberts J that if the O’Connor properties were sold by the defendants and Mr O’Connor subsequently succeeded at trial, damages would be an adequate remedy for Mr O’Connor. She refused the interlocutory relief sought by the plaintiff in the O’Connor proceedings. In the M&F proceedings, she believed that stronger arguments had been raised regarding the validity of the receivers’ appointment and the transfer to Promontoria. She granted an interlocutory injunction in the M&F proceedings restraining the sale by the defendants of the property at 61 Adelaide Road pending the determination of the proceedings. She also granted an injunction which maintained the status quo in relation to collection of rents at that property pending the trial on the strict understanding that all rents collected by M&F were to be accounted for to the defendants and separately maintained and preserved by M&F so that same were available for the defendants in the event that the defendants succeeded at trial and/or for the repayment of indebtedness. She refused the relief sought in paragraph 2 of the plaintiff’s notice of motion in the M&F proceedings as being unduly broad.

Roberts J directed that the defendants should provide an affidavit confirming that the unredacted transfer documents had been inspected by the solicitors on record in the M&F proceedings and setting out in detail the basis of each redaction that they wished to maintain. She held that only those parts of the transfer documents which related to the transfer of title in the plaintiff’s loans and mortgages required disclosure pursuant to a request under s. 91 of the 2009 Act as “documents of title relating to the mortgaged property”. She held that the redacted versions satisfied that requirement and no further inspection of unredacted material was necessary to satisfy the requirements of s. 91. She held that s. 91 cannot be interpreted as an additional mandatory requirement for the appointment of a receiver. She did not find that there had been any failure to provide inspection under s. 91 of the 2009 Act and so refused an order in the terms requested in paragraph 5 of the plaintiff’s notice of motion. She refused an order for inspection of unredacted material under Order 50, rule 4 or the inherent jurisdiction of the Court.

Relief refused in O’Connor proceedings. Relief granted in M&F proceedings.

JUDGMENT of Ms Justice Eileen Roberts delivered on 8 November 2022.

Introduction

1 . This judgment relates to reliefs sought in two separate High Court proceedings which, although not formally consolidated, involve the same or related parties and a degree of commonality of facts. The motions seeking interlocutory relief in each case have travelled together in the Chancery List since 12 July 2021 and were heard together by this Court between 4 and 6 October 2022. This judgment is intended to deal with all issues arising in the applications made to this Court on those dates in either or both sets of proceedings.

2 . Thomas O'Connor is the plaintiff in proceedings bearing record number 2020/5065P (the “ O'Connor Proceedings”). M&F Finance (Ireland) Limited (“ M&F”) is the plaintiff in the proceedings bearing record number 2021/852P (“the M&F Proceedings”). M&F is a trustee company and holds a commercial property situated at 61 Adelaide Road, Dublin 2 for the benefit of Thomas O'Connor's personal pension fund.

3 . The defendants in each case are the same parties, although appearing in the title to each set of proceedings in a different sequence. Ulster Bank Ireland Designated Activity Company (“ Ulster Bank”) is the bank that provided mortgage finance to the plaintiffs, which indebtedness is secured on various commercial properties owned by the plaintiffs. Promontoria (Aran) Limited (“ Promontoria”) is a limited liability company to whom it is pleaded Ulster Bank assigned its interest in the plaintiffs' loan facilities and mortgages in terms which will be set out later in detail in this judgment. Luke Charlton and Marcus Purcell are the insolvency practitioners appointed as joint receivers (the “ Receivers”) of the various properties owned by the plaintiffs which are secured in favour of Ulster Bank. There is a dispute between the parties as to the validity of the appointment of the Receivers in each case.

4 . There are two motions before the Court – one in each set of proceedings. The motion in the O'Connor Proceedings was issued on the 7 October 2020. The motion in the M&F Proceedings was issued on 27 April 2021. In each motion the plaintiff seeks injunctive relief to, among other things, restrain the appointment of the Receivers and/or the taking of any steps by the Receivers to interfere with the plaintiffs' rights over identified properties. The motion in the M&F Proceedings also seeks inspection of those documents (which have been exhibited in redacted form by the defendants) identified and pleaded as the documents giving effect to the alleged transfer of the interest in M&F's loans and security to Promontoria. The latter relief includes a request for an order pursuant to Order 50, rule 4 of the Rules of the Superior Courts, Section 91 of the Land and Conveyancing Law Reform Act 2009 and/or the Court's inherent jurisdiction permitting inspection of all documents of title whereby Ulster Bank and Promontoria assert that they are mortgagee to M&F as mortgagor. An order is also sought for inspection of all documents as are required to allow M&F to obtain legal advice as to whether Promontoria is the successor in title to Ulster Bank to the mortgagee's interest in 61 Adelaide Road, including a Global Deed of Transfer dated 12 February 2015 and all ancillary documents and agreements. The reliefs sought in the motions will be considered further in this judgment.

5 . By way of summary therefore, the two separate issues before this Court relate to (a) the respective plaintiffs' request for interlocutory injunctions restraining the defendants from dealing with the plaintiffs' properties; and (b) M&F's request for production/inspection of unredacted copies of the documents (common to both sets of proceedings) by which Ulster Bank's interest in the relevant loans and security are said to have been assigned to Promontoria.

6 . I propose to now outline the O'Connor Proceedings and the M&F Proceedings and to then apply the facts of each to the issues before this Court as outlined above. Because this is an interlocutory application and not the trial of the action, my analysis of each of the O'Connor Proceedings and the M&F Proceedings is set out in summary form highlighting the main features but not every feature. The essential features of the pleas in each case are relevant to this Court's determination on both the injunction and the inspection claimed although this Court is not determining any issues of fact or law regarding the substantive claims which will be a matter for the trial judge.

The O'Connor Proceedings – facts and parties' submissions

7 . The O'Connor Proceedings were commenced by Plenary Summons issued on 14 July 2020. By notice of Motion dated 7 October 2020, Thomas O'Connor seeks interlocutory injunctions, inter alia, restraining the defendants from dealing with the properties described in the schedule to the Plenary Summons whether as mortgagee or receiver.

8 . In summary, the properties listed in the Schedule to the Plenary Summons in the O'Connor Proceedings are:

(a.) 13 Raglan Road, Ballsbridge, Dublin 2 (“ 13 Raglan Road”)

(b.) 65 Grosvenor Road, Rathmines, Dublin 6 (“ 65 Grosvenor Road”) (c.) Apartment 18, Exchange Hall, The Exchange, Belgard Square North, Tallaght, Dublin 24

(d.) Unit 2, No. 4 Capel Street, Dublin 1

(e.) Apartment 43, Fifth Floor, Block A, Smithfield Market, Smithfield, Dublin 7

(together, the “ O'Connor Properties”).

9 . 65 Grosvenor Road and 13 Raglan Road (which are both properties rented out to various residential tenants) were advertised for...