Fox v Reilly and Another

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Ms. Justice Hyland
• Judgment Date: 22 May 2025
• Neutral Citation: [2025] IECA 115
• Docket Number: Court of Appeal Record Number: 2025/49

Between/

Sylvia Fox

Plaintiff/Respondent

and

Martin Reilly and Donna Heslin

Defendants/Appellants

[2025] IECA 115

Binchy J.

Meenan J.

Hyland J.

Court of Appeal Record Number: 2025/49

High Court Record Number: 2024/ 6103P

THE COURT OF APPEAL

NO REDACTION NEEDED

JUDGMENT of the Court delivered on the 22 of May 2025 by Ms. Justice Hyland

Introduction

1 This is an appeal from a decision of Quinn J. of 7 February 2025 given ex tempore where he made an order directing the defendants (hereafter the “appellants”) to vacate and yield up possession of a house in County Cavan (described hereafter as “No. 24” or the “property”), as well as orders restraining the appellants from entering into the property, obstructing the appellants from entering the property or changing the locks, or causing or being a nuisance to the plaintiff (hereafter the “respondent”).

2 In short, on 28 February 2006, a Mr. Patrick Stack granted a charge over No. 24 in favour of AIB along with other properties, which were comprised in what was called Plan C3E2H in folio CN9260 in the register of free holders for County Cavan and was registered in 2006. On 15 August 2019, the facility was sold to Everyday Finance DAC, and it was registered as the owner of the charge. As noted by the trial judge, Everyday Finance (described as mortgagee in possession) sold the property to the respondent for €130,000 on 12 June 2024.

3 The appellants are in occupation of the property. Mr. Reilly, the first appellant, says he is a tenant in the property since 2015, that he entered into a purchase option agreement with the said Patrick Stack, the mortgagor of the property to AIB, and paid him €20,000 euro for the option, together with a yearly lease for rent thereafter, being €100 euro per annum. In fact, the document described as a lease, is not a yearly lease but rather a lease for an indefinite term, subsisting until No. 24 is sold to Mr. Reilly. I describe the lease later in this judgment.

Registered Owner

4 The plenary summons was issued on 22 October 2024 and the motion seeking possession on 31 October 2024. Following the exchange of 10 affidavits, the matter was heard on 7 February 2025. At that stage, the respondent had made an application to become the registered owner of No. 24 as averred to at para. 19 of her grounding affidavit sworn 30 October 2024 but had not yet become the registered owner. However, by the time this matter was heard on 6 May before this Court, the Court was informed that the respondent had become the registered owner in the interim period, and the Court were provided with a copy of the certificate of registration. A new folio number was provided by the Property Registration Authority, being 37860F and the property was identified as freehold land without any burdens as and from 19 July 2024, in other words the date of the respondent's application. No objection was taken to the provision of the certificate of registration. This appeal therefore proceeds on the basis that Ms. Fox is the registered owner, although this was not the position when the matter was before the High Court.

Applicable legal test

5 The law on an application for an interlocutory injunction seeking possession of lands in the case of an alleged trespass is well established. In Keating & Company Ltd v Jervis Shopping Centre Ltd [1997] 1 IR 512, Keane J. said that a land owner whose title is not in issue is prima facie entitled to an injunction to restrain a trespass, including where the claim is for an interlocutory injunction only, but, following Patel v. WH Smith [1987] 2 All ER 569, the defendant may seek to put in evidence to establish he has a right to what would otherwise be a trespass and then the court must consider the application of the traditional injunction principles. It is helpful to delve a little into the judgment in Patel. There, Balcombe J. held as follows:

“The two recent cases to which I have referred, Woollerton and Wilson Ltd. v. Richard Costain Ltd. and John Trenberth Ltd. v. National Westminster Bank Ltd., 39 P. & C.R. 104 are also authority that the same principle, namely prima facie a landowner whose title is not in issue is entitled to an injunction to restrain trespass, applies where the claim is for an interlocutory injunction. However, the defendant may put in evidence to seek to establish that he has a right to do what would otherwise be a trespass. Then the court must consider the application of the principles set out in American Cyanamid Co. v. Ethicon Ltd. [1975] A.C. 396 in relation to the grant or refusal of an interlocutory injunction. I cite a short passage from the well-known speech of Lord Diplock in that case, at p. 407:

“The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.”

In considering that passage, one must bear in mind that in this type of case it is the defendant who is making the claim, because the plaintiff has established, without objection, that he has a title to the land in question.”

6 In other words, the defendant must establish that there is serious issue to be tried in respect of his alleged entitlement to occupy the property before the court will go on to consider traditional injunction principles. Absent any such evidence, the plaintiff is entitled to an injunction without being required to address those principles. In Clare County Council v McDonagh [2022] IESC 2, Hogan J. observed that where the applicant for such relief for orders restraining trespass was a purely private party, the case for the granting of interlocutory relief would, generally, be almost unanswerable.

7 The appellants have argued that this must be treated as an application for a mandatory injunction, given that the respondent seeks an order for possession, and therefore a strong case must be established following the decision in Maha Lingham v HSE [2006] 17 ELR 137. I am unpersuaded by that argument, given the observation of Simons J. in Start Mortgages v. Kavanagh [2024] IEHC 125, where he concluded that in the case of an alleged trespass, the application is more correctly described as an application for a prohibitory injunction to restrain an ongoing trespass, rather than a mandatory injunction requiring a defendant to deliver up possession of property to which they might have lawful title. Accordingly, the usual test applies.

Grounds of appeal

8 The appellants' grounds of appeal may be summarised as follows. First, they argue that a lis pendens previously registered on folio CN9260 by Mr. Stack and his wife Mary Stack (no longer appearing on the new registration) ought to have prevented the injunction being granted since, if the proceedings the subject of the lis pendens were successful, they would result in the sale of No. 24 being set aside, and no injunction should be granted pending the resolution of those proceedings. Their second complaint is that there was a failure to disclose material facts at the ex parte application made by the respondent. Their third argument was that there was no evidence of the respondent's ability to honour the undertaking as to damages that she provided. Finally, they argue that the trial judge erred in deducing that the mortgage contained a negative pledge clause requiring consent in the absence of sight of the mortgage. I will deal with each of those grounds of appeal in turn.

Lis Pendens

9 A lis pendens appeared on the register of the previous folio in the following terms:

“ 8 June 2023 proceedings affecting the interest of Patrick Stack and Mary Stack in the property are pending in the High Court record number 2023/2266P in a cause or matter of Patrick Stack and Mary Stack (appellants) and Finian O'Reilly and Everyday Finance DAC trading as Link Finance (defendants).”

10 The absence of same in the new registration may be explained by the existence of s. 21(1) of the Conveyancing Act, 1881 (the “1881 Act”), which provides as follows:

“A mortgagee exercising the power of sale conferred by this Act shall have power, by deed, to convey the property sold, for such estate and interest therein as is the subject of the mortgage, freed from all estates, interests, and rights to which the mortgage has priority, but subject to all estates, interests, and rights which have priority to the mortgage; …”

11 The first named plaintiff in the proceedings bearing record number 2023/2266P, Mr. Patrick Stack, is the developer of No. 24 and the person to whom AIB granted a mortgage in 2006. The 2023 proceedings were not exhibited in these proceedings but Counsel for the appellants informed the Court that the plaintiffs are challenging the alleged legality of the transfer of the loan from AIB to Everyday Finance in 2019, and the conduct of Mr. Finian Reilly, the original owner of the lands, and is looking for recission of the sale of No. 24, as well as other properties, as well as other reliefs. The appellants argue that where a party purchases lands being aware of the lis pendens on those lands, then the purchaser takes the lands subject to the rights and liabilities in respect of land which might be subsequently declared by a court in those proceedings.

12 The nexus between the appellants and the proceedings bearing record number 2023/2266P is difficult to identify in the context of this application, particularly since the respondent is not a party to those proceedings. However, the argument appears to be that if the plaintiffs are successful in the proceedings, the contract for sale for No.24...