Court Provides Further Clarification On Execution Of Deeds Of Appointment

Author:Ms Julie Murphy-O'Connor, Brendan Colgan, Tony O'Grady and Niamh Counihan
Profession:Matheson
 
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High Court holds that appointment of receiver under seal of the bank also constitutes appointment by the bank "in writing under its hand"

Summary

In a recent judgment in the case of Ken Fennell v Ben Gilroy & Ors1, the High Court has held that a deed of appointment of a receiver executed by the bank under its seal must also constitute a document executed by the bank "in writing under its hand" in accordance with the provisions of section 24 of the Conveyancing Act, 1881 in circumstances where:

it is a document; it is in writing; and a signature of an authorised signatory of the bank appears on the bottom of it. In this case the Court was satisfied on the evidence that the two signatories who had witnessed the affixing of the seal had been authorised to sign deeds of appointment on behalf of the bank and the fact that a seal had been affixed to the appointment did not otherwise affect its validity. The Court went on further to hold that, even if they had not been so authorised, the bank had subsequently passed a resolution ratifying the authority of the persons to so act and that the bank was perfectly entitled to pass such a resolution in circumstances where it is a basic principle of the law of agency that a principal can ratify the authority of an agent.

The decision of Cregan J in McCleary v McPhillips2 was distinguished on its facts.

Facts

This case concerned an application by the receiver appointed by Allied Irish Banks, p.l.c. for an injunction to restrain the occupants of secured property from interfering with, obstructing or in any other way preventing the receiver from exercising his powers, including entering upon and taking possession of the secured property. One of the main issues before the court was the validity of the deed of appointment.

Mr Gilroy sought to challenge the authority of the receiver claiming (among other things), that the deed of appointment had not been validly executed. In this regard, Mr Gilroy submitted that as the deed of appointment had been executed under seal it did not conform with the requirement under section 24 of the Conveyancing Act, 1881 that the appointment be executed by the bank "in writing under its hand". In support of this, Mr Gilroy sought to rely on the decision of Cregan J in McCleary v McPhillips in which the Court held that deeds of appointment by ACC Loan Management Limited were invalid on the basis that the deeds had not been signed by authorised signatories.

It was argued on...

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