Farrell v Everyday Finacnce DAC and Others

• Jurisdiction: Ireland
• Judge: Ms. Justice Faherty
• Judgment Date: 23 January 2024
• Neutral Citation: [2024] IECA 12
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2022 /314

Between/

Paul Farrell

Plaintiff/Appellant

and

Everyday Finance DAC, Ken Tyrell, Kieran Connolly, Rosemarie Connolly and The Property Registration Authority

Defendants/Respondents

[2024] IECA 12

Whelan J.

Faherty J.

Allen J.

Appeal Number: 2022 /314

THE COURT OF APPEAL

Interlocutory injunction – Property – Serious issue to be tried – Appellant appealing against the judgment and order dismissing his application for interlocutory injunctive relief against the third and fourth respondents – Whether the appellant had failed to demonstrate a serious issue to be tried on the question of the third and fourth respondents’ awareness of the fraud alleged by the appellant

Facts: The plaintiff/appellant, Mr Farrell, appealed to the Court of Appeal against the judgment of 5 December 2022 of the High Court (Stack J) and her order dated 25 November 2022 (perfected 28 November 2022) dismissing his application for interlocutory injunctive relief against the third and fourth defendants/respondents, Mr and Ms Connolly. The plaintiff had sought an interlocutory injunction restraining those defendants from using or enjoying a property known as Unit B1, Baldonnell Business Centre, Baldonnell in the County of Dublin, being the property comprised in Folio 125860L of the Register of Leaseholders in the County of Dublin, pending the trial of the action. He also sought to enjoin the fifth defendant/respondent, the Property Registration Authority, not to register the third and fourth defendants as owners of the property. The plaintiff did not appeal against the refusal of relief against the fifth defendant. Two principal issues arose for determination in the appeal: firstly, whether Stack J was correct to conclude that the plaintiff had failed to demonstrate a serious issue to be tried on the question of the third and fourth defendants’ awareness of the fraud alleged by the plaintiff; and, secondly, whether there was any basis for the Court of Appeal to interfere with the exercise by Stack J of her discretion to refuse the plaintiff interlocutory injunctive relief.

Held by Faherty J that Stack J, having duly referenced the relevant legislation and the legal principles derived from the authorities, correctly determined that there was no basis upon which the plaintiff could assert a serious issue to be tried that the third and fourth defendants were on notice of a fraudulent exercise of a power of sale or that they were on enquiry of fraud due to suspicious circumstances to which they “wilfully” shut their eyes. Faherty J saw no basis for interfering with Stack J’s determination that the third and fourth defendants were more likely to be able to compensate the plaintiff if he was ultimately successful at trial and it turned out that the injunction should have been granted. Faherty J perceived no error of principle, or affront to the interests of justice, in Stack J’s determination that the third and fourth defendants were more likely to be able meet the various financial obligations that attached to the property. Insofar as the plaintiff took issue with how Stack J dealt with his offer to pay the rental income from the tenancies into escrow, in Faherty J’s view, the plaintiff’s submissions on that issue did not come close to demonstrating that Stack J erred. Faherty J found no merit in the submission that Stack J placed undue emphasis on Ryan v Dengrove [2021] IECA 38 or otherwise misconstrued what was said by Murray J in that case. Faherty J held that, in finding that damages would be an adequate remedy for the plaintiff, Stack J duly acknowledged the time and effort expended on the property by the plaintiff and his son and observed that if the plaintiff was successful at trial, he would have a remedy in damages. Faherty J held that this was a judgment call well within the competency of Stack J. Faherty J was satisfied that there was no basis upon which the Court of Appeal should interfere with Stack J’s assessment that the balance of justice favoured the refusal of relief. Faherty J held that the plaintiff’s assertion that his delay was immaterial because no prejudice was suffered by the third and fourth defendants could not suffice to swing the balance of justice in his favour.

Faherty J dismissed the appeal. As the plaintiff had not succeeded in his appeal, Faherty J held that the third and fourth defendants should be awarded their costs.

Appeal dismissed.

UNAPPROVED

Judgment of Ms. Justice Faherty dated the 23 ^rd day of January 2024

1 . This is Mr Farrell's (hereinafter “the plaintiff”) appeal against the judgment of 5 December 2022 of the High Court (Stack J.) (hereinafter “the Judge”) and her Order dated 25 November 2022 (perfected 28 November 2022) dismissing his application for interlocutory injunctive relief against the third and fourth defendants. The plaintiff had sought an interlocutory injunction restraining these defendants from using or enjoying a property known as Unit B1, Baldonnell Business Centre, Baldonnell in the County of Dublin, being the property comprised in Folio 125860L of the Register of Leaseholders in the County of Dublin (hereinafter “the Property”), pending the trial of the action. He also sought to enjoin the Property Registration Authority ( “PRA”) not to register the third and fourth defendants as owners of the property. The plaintiff does not appeal against the refusal of relief against the PRA.

2 . The appeal hearing proceeded before this Court on 2 May 2023. After the conclusion of the hearing, the Court indicated that it was satisfied that the appeal should be dismissed and that it would set out its reasons for dismissing the appeal later.

3 . This judgment sets out both the background to the appeal and the Court's reasons for dismissing the appeal.

4 . The third and fourth defendants purchased the Property at a public auction which was held on 24 August 2022. The first defendant (hereinafter “Everyday”), as mortgagee, sold the Property to the third and fourth defendants (for €300,000) by transfer dated 27 September 2022. At the time of the hearing in the Court below, and when the High Court judgment was delivered, the third and fourth defendants' application to be registered as owners of the Property was pending in the PRA. They have since been registered as full owners of the Property. The second and third defendants now seek to put the relevant evidence of their registration before this Court. I see no reason why the Court should not accede to this application in light of the provisions of Order 86A, r.4(b) of the Rules of the Superior Courts which provides that “further evidence may be given without special leave on any appeal from an interlocutory judgment or order or in any case as to matters which occurred after the date of the decision from which the appeal is brought” and, in particular, being satisfied that the new evidence sought to be adduced (the registration of the third and fourth defendants as the legal owners of the Property) was not in existence at the time of the hearing in the Court below. Furthermore, for reasons set out later in the judgment, I am satisfied that the new evidence has a bearing on the appeal.

5 . The within proceedings were issued on 21 November 2022. In the general indorsement of claim on the plenary summons the plaintiff seeks, inter alia, declaratory orders that his signatures “on purported credit agreements dated 23 December 2011 were forged or otherwise procured or secured by deception and/or fraud” and that the third and fourth defendants were on actual and/or constructive notice of proceedings instituted by Everyday's predecessor-in-title, Allied Irish Bank plc ( “AIB”) in 2017 and 2018, and of proceedings instituted by the plaintiff in 2019 and that “the plaintiff had impugned the validity of the purported facility letters dated 23 December 2011”. The plaintiff also challenges the validity of the appointment of the second defendant as receiver over the Property on 22 July 2021 and seeks declaratory orders that the second defendant did not have power to sell the Property to the third and fourth defendants and that the third and fourth defendants were on actual and/or constructive notice of “the infirmities in the purported contract for sale and/or sale of the Property, including that the Second Named Defendant had no contractual or statutory power of sale in respect of the Property”. He further seeks injunctive relief restraining the third and fourth defendants from, inter alia, taking possession of or otherwise holding themselves out as having an interest in the Property, together with an injunction restraining the PRA from taking any steps in relation to the registration of the sale of the Property. Damages are also claimed.

6 . As will become clear, the third and fourth defendants purchased the Property from Everyday as mortgagee in exercise of a power of sale contained in a mortgage deed, and not from the second defendant, of which more anon.

7 . Of some note is that while the general indorsement of claim asserts essentially that the plaintiff did not in 2011 enter into credit agreements or sign facility letters in 2011, it is not asserted that he was not at the time of the sale of the Property to the third and fourth defendants indebted to AIB or its successor-in-title, Everyday.

8 . The notice of motion seeking interlocutory injunctive relief issued on 21 November 2022. In summary, the relief sought was in the form of orders restraining the third and fourth defendants from:

(1) Taking possession of the Property, marketing it for sale or selling it, or otherwise seeking to deal with the Property;

(2) Trespassing or entering upon or otherwise interfering with the plaintiff's quiet enjoyment of the Property;

(3) Holding themselves out as having any estate or interest in title to, or rights in respect of, the Property;

(4) Holding themselves out as having any entitlement...