Downey v Everyday Finance DAC
| Jurisdiction | Ireland |
| Judge | Ms. Justice Eileen Roberts |
| Judgment Date | 03 March 2023 |
| Neutral Citation | [2023] IEHC 101 |
| Court | High Court |
| Docket Number | 2022 No. 751P |
[2023] IEHC 101
2022 No. 751P
THE HIGH COURT
Injunction – Sale of property – Fair issue to be tried – Plaintiffs seeking an injunction restraining the sale of property – Whether the plaintiffs had established a fair issue to be tried
Facts: The plaintiffs, Mr and Ms Downey, applied to the High Court for an interlocutory injunction restraining the defendants, Everyday Finance DAC, Mr Charleton, Mr Dolliver, BCMGlobal ASI Ltd, Blackwater Asset Management Ltd and BNP Paribas Real Estate Advisory and Property Management Ireland Ltd, from offering for sale and/or engaging in any actions relating to the sale of certain mortgaged properties until the determination of the proceedings. The plaintiffs said that they had raised a fair issue to be tried. They said that their property rights were at stake and that an injunction should be granted to them for that reason. They argued that what they were seeking to enforce by way of a 21 April 2021 agreement was akin to a negative covenant. They feared that if the court did not restrain the defendants, the defendants may dispose of the mortgaged properties in a single job lot sale at a considerable undervalue. They argued that no actual sales strategy had been advanced by the defendants who had merely rejected the plaintiffs’ strategy. They said that the balance of convenience favoured granting the injunction as what the court was being asked to do was essentially to preserve the status quo. They argued that the defendants would not be prejudiced by a further delay in selling the mortgaged properties and said that the plaintiffs would cooperate to achieve as early a trial date as possible. They said that damages would not be an adequate remedy for them in circumstances where their property rights were involved. They said that it would be difficult to quantify any loss if their preferred sales strategy opportunity was lost and they ultimately succeeded at trial. The defendants argued that no injunctive relief should be granted. They said that damages were an adequate remedy for the plaintiffs and that the balance of convenience weighed against interfering with the rights of a mortgagee and validly appointed receiver pending the hearing of the mortgagor’s action disputing only the sales strategy and manner of realising the secured assets. The defendants denied that there were any fair or bona fide issues to be tried. The defendants said that the balance of convenience favoured refusing the injunction sought. They pointed to the commercial nature of the properties and to the fact that no payment had been made to the first defendant despite the fact that the plaintiffs continued to receive rental income from the secured holiday homes registered in folio 4961F Co. Carlow. They said that the judgment of the High Court (Noonan J) dated 8 November 2018, where AIB Mortgage Bank obtained judgment against the plaintiffs, remained unsatisfied and that interest continued to accrue. They said that the plaintiffs had not cooperated in providing information in respect of the secured holiday homes and that this position would continue if the injunction was granted.
Held by Roberts J that while the plaintiffs had established a fair issue to be tried, damages would be an adequate remedy for them in the event that the secured holiday homes were disposed of by the second and third defendants in a negligent manner or in breach of their duty of care owed to the plaintiffs. Roberts J further found that the balance of convenience favoured allowing the validly appointed receivers and the first defendant to dispose of the secured holiday homes (and indeed 4 Artillery Place, a residential property in Newbridge) in discharge of the 2018 judgment and that they must account fully to the plaintiffs for that disposal process.
Roberts J proposed refusing the plaintiffs’ application for an injunction restraining the sale of the secured holiday homes by the second and third defendants.
Application refused.
JUDGMENT of Ms. Justice Eileen Roberts delivered on 3 March 2023
. This judgment deals with the plaintiffs' application for an interlocutory injunction restraining the defendants from offering for sale and/or engaging in any actions relating to the sale of certain mortgaged properties until the determination of these proceedings.
. The notice of motion also seeks an order restraining the defendants from trespassing on or otherwise interfering with those mortgaged properties pending the trial. Other orders are also sought to restrain the defendants from preventing access to one of the properties by the plaintiffs and an order is sought to restrain the fifth named defendant from threatening and/or intimidating the plaintiffs or either of them.
. The central relief sought however is the first relief identified above which seeks to restrain the defendants from progressing any sale of the mortgaged properties (which are identified below as the ‘ Mortgaged Properties’) until these proceedings are determined. This dispute at its heart concerns the sales strategy for the Mortgaged Properties and whether the plaintiffs or the defendants should have control of that process.
. There are a number of issues agreed between the parties and these are set out below in this judgment given their importance to the matters at issue.
. The plaintiff's plenary summons was issued on 24 February 2022 and an appearance was entered on behalf of the defendants on 28 March 2022. The pleadings have not been advanced since that date.
. The plenary summons seeks injunctive relief against the defendants but also seeks a number of other reliefs including a declaration that the plaintiffs have an enforceable agreement dated 23 April 2021 with the fourth named defendant, the terms of which are discussed below. The plaintiffs seek specific performance of that agreement and a declaration that the defendants are estopped from denying it. The plaintiffs also seek a declaration that
“ in accordance with its duty to its to (sic) maximise the value of any asset under its assignation, the Defendants are obliged to consider and fully evaluate any proposal from the Plaintiffs to enhance their assets and value and in particular the proposal to convert the 16 holiday home assets into individual private residential properties and in doing so maximise their value”.
. The plaintiffs are a married couple. They jointly own the following properties which are described collectively in this judgment as the ‘ Mortgaged Properties’ and these are the properties the sale of which is at issue in these proceedings:
No.4 Artillery Place — this property is secured by mortgage dated 20 April 1993. It is a residential property in Newbridge which was occupied by the first named plaintiff's father until his death on 8 January 2022. This property is currently vacant. It is now in the possession of the second and third named defendants as joint receivers who were appointed under deed dated 14 June 2019.
The Secured Holiday Homes — this property is secured by mortgage dated 7 August 2007. The property is registered in folio 4961F Co Carlow and comprises 16 residential units in a courtyard configuration. There are eight mid-terrace three bed units and eight end of terrace two bed units. Numbers 1 – 12 have current planning status as holiday homes. Numbers 13 – 16 have planning as residential homes. Some units are unoccupied, some have full-time tenants and others are let out on a weekly basis. The second and third named defendants are appointed as joint receivers under deed dated 14 June 2019 and they have changed the locks to 2 units (numbers 10 and 13). The plaintiffs continue to manage the holiday homes and receive all rents generated.
The Public House — this property is secured by mortgage dated 20 April 1993. It comprises the public house known as the Garrison Bar registered in folio 27829F Co Carlow. The second and third named defendants were appointed joint receivers over this property on 3 November 2022. Due to an error in that deed of appointment no steps have been taken by the joint receivers since 14 November 2022 as confirmed in the second affidavit of Luke Charleton sworn 24 January 2023.
. The plaintiffs entered into five separate lending facilities with Allied Irish Banks plc (who subsequently assigned their interest to AIB Mortgage Bank in November 2017). These facilities were secured on the Mortgaged Properties. The facilities went into default and AIB obtained judgment against the plaintiffs in the amount of €3,451,120.13 plus costs pursuant to an order of the High Court (Noonan J) dated 8 November 2018 (the ‘ 2018 Judgment’). The plaintiffs consented to the 2018 Judgment and it remains unsatisfied.
. AIB sold its interest in the plaintiffs' facilities and related securities to the first named defendant by deed of transfer dated 14 June 2019. The first named defendant is an Irish registered company regulated by the Central Bank of Ireland.
. The second and third named defendants (together the ‘ Joint Receivers’) were appointed by the first named defendant as joint receivers on 14 June 2019 in respect of 4 Artillery Place and the Secured Holiday Homes. On 26 October 2021 the first named defendant appointed the second and third named defendants as joint agents to provide a range of services in respect of the Secured Holiday Homes and 4 Artillery Place including to act as agents of the first named defendant for the purposes of exercising the powers conferred on it pursuant to the relevant mortgages.
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Emerald Sky 2 DAC and Others v Victoria Homes Ltd and Others
...distinguish the two cases relied upon by the plaintiffs, Ryan v. Dengrove DAC [2020] IEHC 533 and Downey v. Everyday Finance DAC [2023] IEHC 101 on the basis that they involved a receiver in possession against whom the owner as plaintiff sought equitable relief. By contrast, in the present ......