Farrelly v Pepper Finance Corporation DAC

• Jurisdiction: Ireland
• Judge: Ms. Justice Eileen Roberts
• Judgment Date: 28 February 2023
• Neutral Citation: [2023] IEHC 92
• Court: High Court
• Docket Number: 2021 No. 6567P

Between

Orla Farrelly

Plaintiff

and

Pepper Finance Corporation (Ireland) Designated Activity Company

Defendant

[2023] IEHC 92

2021 No. 6567P

THE HIGH COURT

Injunctive relief – Remittal – Jurisdiction – Defendant seeking an order remitting the proceedings to the Circuit Court – Whether the Circuit Court had jurisdiction to make the orders sought by the plaintiff

Facts: The plaintiff, Ms Farrelly, in the plenary summons issued on 3 December 2021, claimed the following reliefs: (a) a declaration that she had good and unencumbered title to an identified property in Rathfarnham (the Property) which she said was her principal private residence; (b) a declaration that the defendant, Pepper Finance Corporation (Ireland) DAC, had no interest in the Property; (c) an order prohibiting the defendant from initiating any proceedings relating to the Property prior to the resolution of the proceedings; and (d) an order prohibiting the defendant from evicting or procuring the eviction of the plaintiff from the Property prior to the resolution of the proceedings. In the statement of claim served on 14 December 2021, an additional relief was sought for an order setting aside two previous High Court judgments in favour of Bank of Scotland (Ireland) Ltd on foot of which judgment mortgages were registered against the Property. The defendant applied to the High Court seeking an order remitting the proceedings to the Dublin Circuit Court. The defendant relied on the actions identified in the second column of the Third Schedule to the Courts (Supplemental Provisions) Act 1961 (as amended) as the basis for its application. The defendant said that actions in respect of real property which has a market value below €3 million are most appropriately brought in the Circuit Court, relying on the amendment to the 1961 Act as inserted by s. 45 of the Civil Liability and Courts Act 2004.

Held by Roberts J that there was valuation evidence before the court that the market value of the Property was significantly less than the jurisdictional threshold of €3 million identified in the Third Schedule to the 1961 Act, and she accepted that evidence. In those circumstances she was satisfied that the Circuit Court had jurisdiction to make the orders sought by the plaintiff in her plenary summons in relation to the declaratory and injunctive reliefs set out. In relation to the plea which was advanced by the plaintiff in her statement of claim seeking to set aside previous High Court orders, Roberts J did not believe that such a claim was properly maintained in the proceedings at all. She held that the plaintiff could not seek in the proceedings to set aside or vary final orders made in the High Court in other proceedings to which the plaintiff was not a party; neither was the defendant a party to those earlier High Court proceedings. It seemed to Roberts J that in those circumstances the plaintiff lacked locus standi in the proceedings to have the previous High Court orders in other proceedings set aside. Therefore, Roberts J held that there was no basis for the plaintiff to insist on remaining in the High Court to pursue that relief in the proceedings. Insofar as any possible claim for damages, including aggravated damages, was maintained by the plaintiff, Roberts J did not believe that, even taken at its height, those damages could reasonably be expected to come within the jurisdiction of the High Court. She found that there was no evidence of actual loss put before the court. She held that any damages for a possible claim of slander of title would not merit the High Court’s jurisdiction in the case, even if such action could be maintained. She held that the delays by the defendant in advancing their defence of the proceedings would not in itself attract an award of punitive or aggravated damages, as claimed. She did not believe that any special circumstances or unusual points of law arose that would persuade the court to exercise its discretion to maintain the proceedings in the High Court, as for example arose in Promontoria (Oyster) DAC v Fox [2020] IEHC 12.

Roberts J decided to exercise her discretion in the matter to remit the proceedings to the Dublin Circuit Court.

Application granted.

JUDGMENT of Ms. Justice Eileen Roberts delivered on 28 February 2023

Introduction and background to the proceedings

1 . This is the defendant's application seeking an order remitting these proceedings to the Dublin Circuit Court.

2 . The plenary summons was issued on 3 December 2021 and the statement of claim was served on the 14 December 2021. A defence was delivered on 1 April 2022. A notice for particulars and replies to particulars were also delivered in April 2022. That is where the pleadings rest.

3 . In the plenary summons the plaintiff claims the following general reliefs:

• (a) A declaration that she has good and unencumbered title to an identified property in Rathfarnham (the ‘ Property’) which she says is her principal private residence;

• (b) A declaration that the defendant has no interest in the Property;

• (c) An order prohibiting the defendant from initiating any proceedings relating to the Property prior to the resolution of these proceedings;

• (d) An order prohibiting the defendant from evicting or procuring the eviction of the plaintiff from the Property prior to the resolution of these proceedings.

4 . In the statement of claim, an additional relief is sought for an order setting aside two previous High Court judgments in favour of Bank of Scotland (Ireland) Limited on foot of which judgment mortgages were registered against the Property.

5 . The background to the plaintiff's claim is somewhat unusual. The statement of claim sets out that the plaintiff's parents bought the Property in 1980 subject to a mortgage in favour of Irish Permanent Building Society. This was the family home and the plaintiff lived there for much of her childhood. From the early 1990s the plaintiff, who was at that stage an adult, began to pay the mortgage payments for her mother (her father having passed away). On 3 January 1993 by deed of conveyance, the plaintiff's mother conveyed title to the Property from her sole name into the name of both her and the plaintiff as joint tenants. Thereafter the mortgage in favour of Irish Permanent Building Society was repaid in full and a deed of discharge confirming satisfaction of that mortgage was registered on 3 February 1994.

6 . A second mortgage in favour of Allied Irish Banks plc was satisfied in 2006 and from that time the plaintiff and her mother enjoyed title to the Property free from any debts and/or encumbrances.

7 . It is pleaded that neither the plaintiff nor her mother authorised any other person to take out any mortgages or otherwise borrow money using the Property as security.

8 . In late 2021 solicitors instructed by the plaintiff carried out a title search on the Property and discovered that five judgment mortgages had been registered against the Property without the plaintiff's or her mother's knowledge. It appeared that the mortgagor defaulted on these mortgages. Various financial institutions had obtained judgment against the mortgagor and then registered judgment mortgages against the Property.

9 . The mortgagor in each case was Mr Michael Lynn, a former solicitor who was struck off the register of solicitors. Mr Lynn has since been charged with multiple counts relating to the alleged theft of millions of euros from seven financial institutions through a scheme involving mortgage applications and letters of undertaking.

10 . The two judgment mortgages the subject of these proceedings were registered by Bank of Scotland (Ireland) Limited. It appears that Bank of Scotland (Ireland) Limited obtained judgment against Mr Lynn in proceedings 2007/1944S and against Mr Lynn and his wife Bríd Murphy in proceedings 2007/1857S. On foot of those judgments Bank of Scotland (Ireland) Limited registered judgment mortgages for €530,224.41 and for €5,838,107.44 against the Property on 29 November 2007.

11 . The plaintiff pleads that on 28 September 2018 Bank of Scotland (Ireland) Limited transferred its interest in loans and security held by it to the defendant. The defendant...