Donovan v OCM EMRU Debtco DAC
| Jurisdiction | Ireland |
| Judge | Mr. Justice Allen |
| Judgment Date | 02 October 2020 |
| Neutral Citation | [2020] IEHC 489 |
| Docket Number | [2020 NO. 6141P.] |
| Court | High Court |
| Date | 02 October 2020 |
[2020] IEHC 489
Allen J.
[2020 NO. 6141P.]
THE HIGH COURT
Sale of property – Brussels I Regulation (recast) – Jurisdiction – Defendant seeking an order dismissing or staying the proceedings – Whether the High Court had jurisdiction to deal with the proceedings
Facts: The plaintiff, Mr Donovan, commenced proceedings by plenary summons issued on 2nd September, 2020 by which he claimed: “1. An order restraining [the defendant, OCM EMRU Debtco DAC], its servants or agents, from selling, conducting the sale of, taking any steps in relation to the sale of, or otherwise disposing of the plaintiff’s property at Calle Wagner, 120 Sierra Blanca, Marbella, Malaga, Spain. 2. A declaration that any security purportedly held by the defendant in respect of the plaintiff’s property at Calle Wagner, 120 Sierra Blanca, Marbella, Malaga, Spain is void and/or invalid. 3. Damages for negligence, breach of duty (including statutory duty) and breach of contract. 4. Damages in lieu of equitable relief. 5. Such further and other order as to this Honourable Court shall seem proper. 6. Costs.” On the same day application was made for short service of a motion for an interlocutory injunction in the terms of para. 1 of the plenary summons and by leave of the court a motion was issued originally returnable for 10th September, 2020. The stated urgency for the motion was that the sale of the property was imminent. OCM did not engage with the substance of Mr Donovan’s motion but countered with a motion issued on 11th September, 2020 originally returnable for the 17th September, 2020 for an order dismissing or staying the proceedings on the grounds that under Regulation (EU) 1215/2012 (the Brussels I Regulation (recast)) the court had no jurisdiction, alternatively should decline jurisdiction, to deal with these proceedings.
Held by the High Court (Allen J) that the Spanish court had exclusive jurisdiction; it was recognised by Mr Donovan at the time the Spanish proceedings were instituted, and it was acknowledged that the Spanish court had jurisdiction. Allen J held that Mr Donovan, by entering an appearance, acknowledged that jurisdiction. Allen J noted that the Spanish court had exercised that jurisdiction and made a final order which the High Court was bound to, and did, recognise. There being no issue as to jurisdiction, Allen J held that no issue of provisional or protective measures could arise.
Allen J held that the appropriate order was an order on the defendant’s motion issued on 11th September, 2020 declaring that the court recognised the judgment given by the Court of First Instance of Marbella in favour of the defendant for mortgage foreclosure on foot of a deed of mortgage loan dated 15th December, 2009 secured by the single-family house located in Urbanización Sierra Banca, 120, registered in Marbella Land registry No. 3, Estate 32,860, at Volume 2,082, Book 1,056, Folio 38; declaring that the court had no jurisdiction to hear or determine any challenge to the validity of the security held by the defendant in respect of the property at Calle Wagner, 120, Sierra Blanca, Marbella, Malaga, Spain, or any claim for damages arising out of the sale of that property; and dismissing the action and the plaintiff’s motion issued on 3rd September, 2020. Provisionally, it seems to Allen J that the defendant had been entirely successful and that the costs must follow the event.
Action dismissed.
In 2006 the plaintiff, Mr. Joe Donovan, bought a villa in Marbella called Calle Wagner for about €3 million. The purchase price was paid with money borrowed from Anglo Irish Bank Corporation plc (” Anglo“). Shortly before the purchase, Mr. Donovan gave a general power of attorney to his Spanish lawyer, Don Carlos Martin Granados. Mr. Donovan's ownership of the property was duly registered in the Land Registry of Marbella, as was a form of mortgage in favour of Anglo dated 15th December, 2009.
Shortly after 28th January, 2018 Mr. Donovan received a letter of that date from the defendant, OCM EMRU DEBTCO DAC (” OCM“), an Irish registered company with an address at Merrion Square, Dublin. OCM referred to the mortgage of 15th December, 2009 which had, it was said, been modified on 13th August, 2010 by means of a public deed. Anglo Irish Bank Corporation plc, it was said, had changed its name first to Anglo Irish Bank Corporation Limited and then to Irish Bank Resolution Company Limited which, it was said, had been put into special liquidation on 7th February, 2013. The mortgage loan, it was said, had been transferred by Irish Bank Resolution Company (In Special Liquidation) to National Asset Loan Management Limited on 3rd December, 2015, and, on 12th July, 2016, by National Asset Loan Management Limited to OCM. OCM asserted that the balance outstanding on the mortgage loan as of 15th January, 2018 was €3,557,358.17. Invoking the Spanish Mortgage Law (Legislation Hipotecaria) and the Spanish Civil Procedural Act (Ley de Enjuiciamiento Civil), OCM demanded payment of the full amount within seven days, failing which, it was said, foreclosure proceedings would be initiated without further notice or requirement in accordance with the provisions of section 517 et seq. of the Spanish Civil Procedure Act.
On 5th April, 2018, OCM commenced proceedings for mortgage foreclosure in the First Instance Court of Marbella. The documents were duly served on Mr. Donovan at his address in Cork and he instructed a Spanish lawyer, Don Antonio Flores, to contest the proceedings. Mr. Flores entered an appearance on behalf of Mr. Donovan but did not contest the proceedings. It is now said that Mr. Flores omitted to file a piece of procedural paperwork within the time allowed by the Spanish civil procedure.
In the meantime, Mr. Donovan commenced criminal proceedings in Spain against some of the directors of Irish Bank Resolution Corporation Limited and his former Spanish lawyers who had signed the form of mortgage of 15th December, 2009. Mr. Donovan's complaint was that his former Spanish lawyers had exceeded their authority on the ground that the power of attorney, although on its face a general power of attorney, was limited to completing the loan documentation and the purchase of the property and did not authorise the execution of the mortgage, and that his signature had been forged on a later document purporting to confirm the authority of the attorney to sign the mortgage.
Mr. O'Donovan, by his Spanish lawyers, applied to the Spanish courts to stay the civil proceedings pending the outcome of the criminal proceedings. It is not useful to go into the detail of the various applications made to the Spanish courts but eventually, on 16th July, 2020 the Spanish court confirmed an auction decree which had been made in respect of the property as final. Mr. Donovan's advice from his Spanish lawyer - and the premise of these proceedings - is that the Spanish court order is final and cannot be overturned.
These proceedings were commenced by plenary summons issued on 2nd September, 2020 by which Mr. Donovan claims:-
“1. An order restraining the defendant, its servants or agents, from selling, conducting the sale of, taking any steps in relation to the sale of, or otherwise disposing of the plaintiff's property at Calle Wagner, 120 Sierra Blanca, Marbella, Malaga, Spain.
2. A declaration that any security purportedly held by the defendant in respect of the plaintiff's property at Calle Wagner, 120 Sierra Blanca, Marbella, Malaga, Spain is void and/or invalid.
3. Damages for negligence, breach of duty (including statutory duty) and breach of contract.
4. Damages in lieu of equitable relief.
5. Such further and other order as to this Honourable Court shall seem proper.
6. Costs.”
On the same day application was made for short service of a motion for an interlocutory injunction in the terms of para. 1 of the plenary summons and by leave of the court a motion was issued originally returnable for 10th September, 2020. The stated urgency for the motion was that the sale of the property was imminent. The case which Mr. Donovan would make is set out in his grounding affidavit. It is, variously, that the authority conferred by the 2006 power of attorney was limited to the purchase of the property, and did not extend to the creation of any mortgage or charge; that no mortgage was ever executed in favour of Anglo; that the loan facility in connection with the purchase of the property was released or redeemed in 2007 by further borrowings by a company associated with Mr. Donovan; that the power of attorney had been revoked; and that Mr. Donovan's purported signature dated 2nd December, 2009 on a fax sent to him by Mr. Granados in September, 2009 seeking confirmation of authority to execute the mortgage had been forged.
OCM did not engage with the substance of Mr. Donovan's motion but countered with a motion issued on 11th September, 2020 originally returnable for the following Monday, 17th September, 2020 for an order dismissing or staying the proceedings on the grounds that under Regulation (EU) 1215/2012 (“the Brussels I Regulation (recast)”) the court has no jurisdiction, alternatively should decline jurisdiction, to deal with these proceedings.
The affidavit of Mr. Eoin Donnellan grounding OCM's application sets out the history of the Spanish proceedings, civil and criminal, and, by reference to legal advice, what Mr. James Doherty S.C. on the hearing of the motion characterised as a cascade of reasons in support of the proposition that the court has no jurisdiction to deal with the proceedings, or should decline jurisdiction.
It is said, firstly, that in proceedings which have as their object rights in rem in immovable property, Article 24 of the Brussels I...
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