Fennell v Slevin

• Jurisdiction: Ireland
• Judge: Mr. Justice Mark Sanfey
• Judgment Date: 18 December 2020
• Neutral Citation: [2020] IEHC 677
• Court: High Court
• Docket Number: [Record No. 2018/8210 P]

BETWEEN

KEN FENNELL

PLAINTIFF

AND

DENIS SLEVIN, DANNY MCMENAMIN

AND

SIOBHAN GALLAGHER

DEFENDANTS

[2020] IEHC 677

Mark Sanfey

[Record No. 2018/8210 P]

THE HIGH COURT

Interlocutory orders – Properties – Balance of convenience – Plaintiff seeking interlocutory orders – Whether the balance of convenience favoured the grant of the interlocutory reliefs sought

Facts: The plaintiff, Mr Ken Fennell (the receiver), applied to the High Court for the following orders: (1) an interlocutory order restraining the defendants, Mr Slevin, Mr McMenamin and Ms Gallagher, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents, from taking possession of, getting in and collecting the properties; (2) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents from securing the properties; (3) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents from collecting the rent or other income of the properties; (4) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from trespassing upon, entering upon or otherwise attending at the properties; (5) an interlocutory order directing the defendants, their servants or agents, or any other person having notice of the said order, to deliver up to the plaintiff forthwith any keys, alarm codes, locks and any other security and access devices and equipment in respect of the properties; (6) an interlocutory order directing the defendants, their servants or agents, or any other person having notice of the said order, to deliver up to the plaintiff forthwith all title documents, books and records held in relation to the properties; (7) such further or other order as the court shall deem fit; (8) an order providing for the costs and incidental to this application. The properties in question were comprised in Folios 8095F and 54840F of the Register of Freeholders, Co. Donegal, and were known as 33 and 34 Marian Villas, Donegal Town, Co. Donegal.

Held by Sanfey J that the balance of convenience heavily favoured the grant of the interlocutory reliefs sought. He did not consider that the length of time taken to get to this point would justify a view that things should remain as they were pending the trial. The plaintiff in Sanfey J’s view was likely to succeed at the trial of the action. He noted that the defendants had made no proposals in relation to the discharge of the loans, or even to place funds in escrow pending the court’s determination as to whether or not Promontoria (Finn) Ltd (PFL) validly succeeded to the bank’s charge; in this latter regard, the defendants had made no application to the Property Registration Authority for rectification of the Register of the County of Donegal, to which PFL would be the appropriate respondent. It seemed to Sanfey J that the defendants were happy to fend off PFL’s attempts to regain possession of the secured assets for as long as they could, all the while deriving rental income from the properties and refusing to make repayments of the loans. He did not have any indication as to the defendants’ means, and as they collectively appeared to owe in the region of half a million Euro in respect of the loans, he considered that damages would not be an adequate remedy. Sanfey J found relevant to this consideration the fact that the condition and occupation of the properties are unknown to the receiver; he was entitled to secure the assets and ensure that they are protected and maintained. Sanfey J held that, in the event that the trial judge ultimately concluded that the receiver had not made out his case and held for the defendants, they would have the benefit of the receiver’s undertaking as to damages. He held that, as the secured assets were investment properties, any damage suffered by the defendants was readily remediable in damages.

Sanfey J held that he would make an order in the terms of para. 1-6 of the notice of motion as set out above.

Application granted.

JUDGMENT of Mr. Justice Mark Sanfey delivered on the 18th day of December, 2020

Introduction

1 This judgment concerns an application by the plaintiff (‘the receiver’) for the following orders: -

(1) An interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents, from taking possession of, getting in and collecting the properties described in schedule hereto (hereinafter ‘the properties’);

(2) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents from securing the properties;

(3) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from preventing, impeding and/or obstructing the plaintiff, his servants or agents from collecting the rent or other income of the properties;

(4) an interlocutory order restraining the defendants, their servants or agents, or any other person having notice of the said order, from trespassing upon, entering upon or otherwise attending at the properties;

(5) an interlocutory order directing the defendants, their servants or agents, or any other person having notice of the said order, to deliver up to the plaintiff forthwith any keys, alarm codes, locks and any other security and access devices and equipment in respect of the properties;

(6) an interlocutory order directing the defendants, their servants or agents, or any other person having notice of the said order, to deliver up to the plaintiff forthwith all title documents, books and records held in relation to the properties;

(7) such further or other order as this honourable court shall deem fit;

(8) an order providing for the costs and incidental to this application.

2 The properties in question are comprised in Folios 8095F and 54840F of the Register of Freeholders, Co. Donegal, and are known as 33 and 34 Marian Villas, Donegal Town, Co. Donegal (‘the properties’). Each of the properties is a residential investment property.

3 The application is resisted by the defendants, all three of whom executed a deed of mortgage and charge in respect of the property known as 34 Marian Villas on 30th July, 2004. The first and second named defendants executed a deed of mortgage and charge over the property known as 33 Marian Villas on 1st August, 2006. Each of these deeds was executed in favour of Ulster Bank (Ireland) Limited (‘the bank’).

4 The defendants were represented at the hearing of the application by the first and second named defendants in person. Submissions were made at the hearing using “ speaking notes” which set out a number of technical points in detail, referring to legal arguments and cases. These notes were helpfully made available to the court at the conclusion of the hearing, and thus double as a detailed written submission on behalf of the defendants.

5 There was an extensive exchange of affidavits between the parties. There is not much dispute between the parties as to the facts of the matter, and much of the affidavits is taken up with what is in effect legal argument.

6 In order to understand the issues, it is necessary to set out the background to the matter in some detail.

Background

7 The present proceedings were initiated on 17th September, 2018, and the motion issued on 12th October, 2018, returnable for 12th November, 2018. The grounding affidavit was sworn by the receiver on 18th September, 2018, and sets out the background to the matter.

8 He refers to and exhibits the letters of loan sanction and the deeds of mortgage and charge referred to above, and refers to separate letters of demand of 10th July, 2013 by which it is alleged the bank demanded from the defendants repayment of the capital and interest pursuant to the letter of loan sanction of 6th June, 2004, and from the first and second named defendants repayment of the capital and interest pursuant to the letter of loan sanction 22nd February, 2006. It is asserted that no amounts were paid on foot of the said demands, and subsequently the bank appointed Seán Webb and David Brady as joint receivers in respect of the properties by deeds of appointment of receiver dated 23rd December, 2013.

9 It is alleged that the bank's interest in the letters of loan sanction and the associated security was transferred to Promontoria (Finn) Limited by way of loan sale deed of 23rd July, 2015 and deed of novation dated 14th September, 2015. It is asserted that the first and second named defendants were placed on notice of the said assignment by way of separate letters of 5th November, 2015.

10 By separate deeds of discharge of receiver dated 27th January, 2016, Promontoria (Finn) Limited (‘PFL’) discharged Mr. Webb and Mr. Brady as receivers of the properties, and by separate deeds of appointments of receiver of 27th January, 2016, appointed Mr. Fennell as receiver of the properties.

11 The receiver asserts that he sought to take steps to take possession of the properties with a view to realising the income thereof, but that the defendants did not cooperate with his endeavours in this regard, and he was compelled to issue proceedings against the defendants in this Court pursuant to record number 9534P of 2017 (‘the 2017 proceedings’). The receiver subsequently issued an application seeking relief by way of...