Duggan v Supermacs Ireland Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Bolger
• Judgment Date: 10 November 2022
• Neutral Citation: [2022] IEHC 630
• Court: High Court
• Docket Number: [2021/245S]

Between

Richard Duggan

Plaintiff

and

Supermacs Ireland Limited

Defendant

[2022] IEHC 630

[2021/245S]

THE HIGH COURT

Summary judgment – Unpaid rent – Receivership – Plaintiff seeking to enter summary judgment against the defendant for unpaid rent over the plaintiff’s property – Whether the defendant’s case could be improved by discovery and oral evidence

Facts: The plaintiff, Mr Duggan, applied to the High Court seeking to enter summary judgment against the defendant, Supermacs Ireland Ltd, in the amount of €135,412.69 for unpaid rent over the plaintiff’s property from March 2020 until April 2021. Counsel for the plaintiff relied on what he described as well settled law that a receiver is an agent of the mortgagor and on s. 109 of the Land and Conveyancing Law Reform Act 2009, which entitles the receiver to demand and receive moneys in relation to the demised property. The plaintiff argued that the appointment of the receiver did not alter the defendant’s liability to pay the rent due thereunder. The plaintiff argued that the decision of Baker J in An Post v Harrington [2019] IEHC 438 allowed him to rely on the settlement agreement in which the receiver disclaimed any rights acquired to arrears of rent. He relied on the UK decision of Newhart Development Ltd v Cooperative Commercial Bank Ltd [1978] BQ 814 where the Court of Appeal held that the appointment of a receiver did not divest the company directors’ power to institute proceedings that did not prejudice the debenture holder by threatening the assets subject to the charge. The plaintiff argued that the appointment of a receiver did not displace his entitlement to the benefit of the rent during the receivership albeit it may have supplanted his entitlement to collect the rent during that time; once the receivership was determined in circumstances where the rights accruing to the receiver and/or mortgagee were expressly disclaimed, he was entitled to recover monies due and owing to him. The defendant disputed the debt and challenged the plaintiff’s locus standi because the arrears of rent related to when the property was under receivership. They argued that the receiver’s failure to recover any rent due was solely a matter between the plaintiff and the receiver and that the rent payable to the receiver during the receivership constituted a new agreement with the receiver to which the plaintiff was not a party and therefore any arrears were a matter for the receiver; the plaintiff extinguished any legal entitlement to claim arrears when he sold the property. The defendant cited the decision of Laffoy J in Re: National Asset Management Act 2009: Ronan & ors - Taite applicant [2013] IEHC 386 for the proposition that the receiver was entitled to any arrears of rent. The defendant contended that its case may be improved by discovery and oral evidence. The defendant’s counsel identified some of the documents they would intend seeking including the deed of discharge, the original mortgage under which the receiver was appointed and documentation, and possibly oral evidence, relating to the determination of the receivership and to the new landlord’s acquisition of the premises, all of which may improve their defence. They relied on the decision of the Court in Bank of Ireland v O’Connor [2022] IEHC 410 as an example of where the Court refused to enter summary judgement as discovery and oral evidence could potentially improve the defendant’s position.

Held by Bolger J that the Harrington decision lent credence to the defendant’s contention that the terms of the deed of discharge in the case could improve their defence. She considered it more than mere speculation. She held that the fact that the defendant’s belief may only just get beyond the level of speculation still meant the matter should go to plenary hearing. She also took account of the shortfalls, identified by the defendant, of the plaintiff’s proof.

Bolger J refused the plaintiff’s application and directed that the matter should be referred to plenary hearing. Her indicative view on costs was that the costs of the motion should be treated as costs in the cause.

Application refused.

JUDGMENT of Ms. Justice Bolger delivered on the 10th day of November, 2022

1 This is the plaintiff's application to enter summary judgment against the defendant in the amount of €135,412.69 for unpaid rent over the plaintiff's property from March 2020 until April 2021. For the reasons set out below, I refuse the application.

Background

2 The plaintiff was the registered owner of the property over the time for which unpaid rent is claimed. The defendant had been a tenant there for many years. In February 2020 the plaintiff had fallen into arrears in his loan repayments and Everyday Finance DAC appointed a receiver over the property. Thereafter the defendant either did not pay the rent or made partial payments to the receiver or directly to the plaintiff who forwarded the money to the receiver. In March 2021 the plaintiff sold the property and paid the proceeds of sale to Everyday Finance in discharge of his liability to them and the plaintiff was relieved from his security pursuant to a settlement agreement that also provided for the plaintiff's entitlement to pursue the defendant for the...