Farrington v Promontoria (Oyster) DAC
| Jurisdiction | Ireland |
| Judge | Mr. Justice Garrett Simons |
| Judgment Date | 11 August 2023 |
| Neutral Citation | [2023] IEHC 492 |
| Court | High Court |
| Docket Number | 2023 No. 3628 P |
[2023] IEHC 492
2023 No. 3628 P
THE HIGH COURT
Interlocutory injunction – Sale of property – Land and Conveyancing Law Reform Act 2009 – Plaintiff seeking an order restraining the sale of a property – Whether it was permissible for any of the defendants to purport to sell the property in the absence of a court order for sale
Facts: The plaintiff, Mr Farrington, the registered owner of a property located in Derrybeg, Rossbrien, County Limerick, applied to the High Court for an interlocutory injunction. The principal order sought was one restraining the sale of the property by auction on 17 August 2023. The defendants, Promontoria (Oyster) DAC, Mr Tennant and Mr Fenn, were, respectively, the holder of a registered charge in respect of the property, the first receiver appointed by the charge holder, and the auctioneer engaged for the purpose of the sale. The second receiver of the property was Mr Harper. The plaintiff asserted that it was not permissible for any of the defendants to purport to sell the property in the absence of a court order for sale. The plaintiff made two related arguments by reference to the Land and Conveyancing Law Reform Act 2009. First, it was said that a power of sale is not exercisable without a court order pursuant to s. 100 of the 2009 Act. That provision was said to apply to the mortgage in the case notwithstanding that it had been created prior to the commencement date. Secondly, it was said that any statutory power of sale which might previously have existed by virtue of the Conveyancing Act 1881 had been repealed. It was further said that this was so notwithstanding the saver introduced under the Land and Conveyancing Law Reform Act 2013.
Held by Simons J that s. 96 of the 2009 Act provides that the powers and rights of a mortgagee under ss. 97 to 111 apply to any mortgage created by deed after the commencement of Chapter 3 of the 2009 Act; therefore, the provisions do not apply to a pre-2009 mortgage. Simons J held that Chapter 3 of the 2009 Act does not distinguish between “powers and rights”, on the one hand, and “restrictions”, on the other; rather the only potentially relevant distinction made under Chapter 3 is between “powers and rights” and “obligations”. Simons J held that the principal “obligations” of a mortgagee are those identified at s. 107, i.e. the obligations on selling. Simons J held that s. 100 creates a “power” of sale and as such is subject to the temporal limitation. Simons J held that, in the case of a mortgage created prior to 1 December 2009, the mortgagee will, generally, enjoy a statutory power of sale pursuant to the provisions of the 1881 Act; those provisions continue to apply, notwithstanding their repeal, by virtue of the saver provided for under the 2013 Act. Simons J held that the judgment in Bank of Ireland Mortgage Bank v Farrington [2018] IEHC 331 does not stand as authority for the proposition that the saving provisions of the 2013 Act are ineffective; it follows that Promontoria (Oyster) DAC, as the registered charge holder, enjoyed a statutory power of sale pursuant to the provisions of the 1881 Act. Simons J noted that Clause 8 and Clause 12 of the deed of mortgage allow, first, for the appointment of a receiver, and, secondly, for the receiver to sell the property with all the powers of an absolute beneficial owner. Having considered the terms of appointment of Mr Harper as receiver, Simons J was satisfied that the plaintiff had not put forward any basis for suggesting that Mr Harper’s appointment was invalid. Simons J held that, in all the circumstances, the plaintiff had failed to establish a serious issue to be tried.
Simons J refused the application for an interlocutory injunction. He made an order directing that the plaintiff pay the defendants’ legal costs of and incidental to the application for an interlocutory injunction.
Application refused.
Appearances
The plaintiff appeared as a litigant in person
Eoghan Cole and Amy Hughes for the defendants instructed by Byrne Wallace LLP
JUDGMENT of Mr. Justice Garrett Simons delivered on 11 August 2023
This judgment is delivered in respect of an application for an interlocutory injunction. The principal order sought is one restraining the sale of a property by auction on 17 August 2023. The application for the injunction is moved by the registered owner of the property, Mr. Farrington. Mr. Farrington appears as a litigant in person.
The defendants are, respectively, the holder of a registered charge in respect of the property; the (first) receiver appointed by the charge holder; and the auctioneer engaged for the purpose of the sale. As explained at paragraphs 36 to 39 below, it appears that the current receiver of the property is Mr. Damian Harper. The defendants confirm that, at the plaintiff's election, they will consent to the joinder of Mr. Harper to the proceedings whether in addition to, or in substitution for, Mr. Tennant.
The property is located in Derrybeg, Rossbrien, County Limerick. The title to the land is registered under Folio 46591F, County Limerick.
The principles governing the grant of interlocutory injunctions have recently been clarified by the Supreme Court in Merck Sharp & Dohme Corporation v. Clonmel Healthcare Ltd [2019] IESC 65, [2020] 2 I.R. 1. In brief, a court hearing an application for an interlocutory injunction should first consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief pending the trial could be granted. The court must consider whether the plaintiff has established that there is a “ serious issue” to be tried (sometimes referred to as an “ arguable case” or as a “ fair issue” to be tried). If so, the court should then proceed to consider how matters should best be regulated pending the trial. This involves consideration of the balance of justice (sometimes referred to as the “ balance of convenience”).
The preferable approach is to consider the adequacy of damages as part of the balance of justice, rather than as a separate step in a three-stage test. It is not simply a question of asking whether damages are an adequate remedy. An interlocutory injunction should not be granted merely because the plaintiff can tick the relevant boxes of arguable case, inadequacy of damages, and ability to provide an undertaking as to damages. By the same token, an interlocutory injunction should not be refused merely because damages may be awarded at trial.
If the balance of justice is finely balanced, then it might be appropriate for the court to consider, even on a preliminary basis, the relative strengths and merits of each party's case as it may appear at the interlocutory stage. This will be necessarily dependent upon the proceedings presenting a legal issue upon which the court could confidently express a view, and also dependent upon any facts relevant to the disposition of that issue being supported by credible evidence ( Ryan v. Dengrove DAC [2021] IECA 38).
Finally, the threshold to be met by the plaintiff will be more exacting in circumstances where mandatory relief is being sought by way of an interlocutory injunction. Rather than simply demonstrate a serious issue to be tried, it will be necessary for the plaintiff to establish a strong case that they are likely to succeed at the hearing of the action ( Lingam v. Health Service Executive [2005] IESC 89).
The first matter to be addressed is whether or not the plaintiff has established that there is a serious issue to be tried. More specifically, it is necessary to consider whether the plaintiff has made out a case which, if substantiated at trial, would justify the prohibition of the sale of the property by the defendants.
The plaintiff has yet to deliver a statement of claim in the proceedings. It is thus somewhat difficult to identify, from the limited papers to date, the precise grounds upon which the plaintiff seeks to restrain the sale of the property. The plaintiff has, however, filed written legal submissions.
Helpfully, the plaintiff explained, at the outset of the hearing on 9 August 2023, that his principal concern is as follows. The plaintiff asserts that it is not permissible for any of the defendants to purport to sell the property in the absence of a court order for sale. The plaintiff makes two related arguments by reference to the Land and Conveyancing Law Reform Act 2009 as follows. First, it is said that a power of sale is not exercisable without a court order pursuant to Section 100 of the Act. This provision is said to apply to the mortgage in the present case notwithstanding that it had been created prior to the commencement date. Secondly, it is said that any statutory power of sale which might previously have existed by virtue of the Conveyancing Act 1881 has now been repealed. It is further said that this is so notwithstanding the saver introduced under the Land and Conveyancing Law Reform Act 2013. These two arguments are considered, in turn, below.
Chapter 3 of the Land and Conveyancing Law Reform Act 2009 provides for the obligations, powers and rights of a mortgagee. The powers conferred include a right to sell a mortgaged property. It is provided that the power of sale shall not become exercisable without a court order unless the mortgagor consents in writing to such exercise not more than 7 days prior to such exercise. It is not permissible to contract out of these provisions in the case of a “ housing loan” as defined. There is a factual dispute between the parties as to whether the mortgage in...
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