Havbell Dac. v Dias

• Jurisdiction: Ireland
• Judge: Ms. Justice Costello
• Judgment Date: 20 March 2018
• Neutral Citation: [2018] IEHC 175
• Court: High Court
• Docket Number: [2017 No. 10965 P.]
• Date: 20 March 2018

BETWEEN

HAVBELL DESIGNATED ACTIVITY COMPANY

PLAINTIFF

AND

MARIA (OTHERWISE MARIAH) ISABEL DIAS (OTHERWISE HARVEY)

DEFENDANT

[2018] IEHC 175

Costello J.

[2017 No. 10965 P.]

THE HIGH COURT

Banking and Finance – Landlord & Tenant – Loan agreement – Entitlement of possession – Delay in seeking injunctive relief – Right to remain in possession – Tenancy agreement – Bona fide act

Facts: The plaintiff sought an injunction for restraining trespass to property and ancillary reliefs. The defendant argued that the plaintiff had not established sufficient evidence of its title to the charge or that it had been properly authorised to institute the proceedings against the defendant. The defendant contended that she was entitled to remain in occupation of the premises on foot of a tenancy agreement. The defendant objected that the plaintiff had been guilty of considerable delay in seeking injunctive relief to such a degree that the Court should refuse an injunction. The defendant also stated that the plaintiff had refused to engage or negotiate with her in relation to the sale of the property to her so the relief sought by the plaintiff should be refused on equitable grounds. The plaintiff contended that the tenancy agreement was not binding upon him as the lessor had not obtained a prior written consent of the mortgagee to enter into any tenancy agreement.

Ms. Justice Costello granted the reliefs sought by the plaintiff and held that the plaintiff was entitled to possession of the property from the defendant. The Court found that the plaintiff had presented enough proofs to establish its title to the charge. The Court observed that there was no delay on behalf of the plaintiff in seeking the injunction. The Court noted that there was no legal obligation on the plaintiff to negotiate with the defendant for the sale of the property so the act of the plaintiff was bona fide.

JUDGMENT of Ms. Justice Costello delivered on the 20th day of March, 2018

1 The plaintiff seeks an injunction restraining trespass to property and ancillary reliefs. The defendant is in occupation of the property and resists the applications and seeks to have the issues between the parties determined at a plenary hearing and that the injunctive relief sought should not be granted on an interlocutory basis.

The facts

2 On the 21st September, 2007 John Rooney of Windermere, Myrtleville, Crosshaven, County Cork entered into a loan agreement with Irish Life and Permanent Plc trading as Permanent TSB. It was an interest only commercial loan for a term of 20 years in the amount of €2.3 million. It was to be used to purchase a property known as 1-2 Phibsborough Road, Phibsborough, Dublin 7 (‘the property’) and Irish Life and Permanent Plc was to obtain a first legal charge over the property. At Clause 6 of the special conditions Mr. Rooney agreed:

‘That no letting or renewal of letting of the property, the terms and conditions of which provide for a term of more than twelve months, be made without the prior consent of Permanent TSB in writing.’

The approval was subject inter alia to confirmation that the property had a minimum market value of €3.1 million and a rental income of €14,200 per month.

2 On the 10th January, 2008 Mr. Rooney granted Irish Life and Permanent Plc a legal charge over the lands comprised in Folio 77845F of the County of Dublin which were commonly described as 1-2 Phibsborough Road, Phibsborough, Dublin 7, the property. At Clause 5.11 Mr. Rooney covenanted:-

‘Not without the prior written consent of Permanent TSB to make any disposition of the property subject to the mortgage nor create or purport to create any rent charge affecting it.’

Clause 9.1 of the mortgage provided:-

‘The powers of leasing or agreeing to lease and of accepting surrenders of leases conferred on a mortgagor in possession by the Conveyancing Acts 1881 to 1911 or other statutory powers of leasing shall not apply to the mortgage and the mortgagor shall not otherwise grant or agree to grant any lease tenancy licence of part with or share possession or occupation of the property without the prior written consent of Permanent TSB.’

3 On the 18th March, 2008 Mr. Rooney was registered as full owner of the lands comprised of Folio 77845F and Irish Life and Permanent Plc was registered as the owner of a charge for present and future advances payable with interest on the 13th March, 2009.

4 On the 29th June, 2012 Irish Life and Permanent Plc changed its name to Permanent TSB Plc. On the 19th June, 2015 Permanent TSB Plc entered into a deed of transfer with Havbell Ltd. By the deed of transfer Permanent TSB Plc transferred to Havbell Ltd the charges set out in the schedule to the deed of transfer to include all the estate right title interest benefit and obligations of Permanent TSB Plc arising in, to or under the charges. The charge of Mr. John Rooney over the property was included in the schedule and was thereby transferred by Permanent TSB Plc to Havbell Ltd.

5 On the 15th July, 2015 Havbell Ltd was registered on Folio 77845F as the owner of the charge registered in favour of Irish Life and Permanent Plc on the 13th March, 2009.

6 On the 29th September, 2016 Havbell Ltd reregistered as Havbell Designated Activity Company, the plaintiff in these proceedings.

7 In 2015 Mr. Rooney was in default in respect of his obligations under the loan. He decided to surrender the property to Permanent TSB on a voluntary basis. On the 20th May, 2015 (prior to the sale of the charge to Havbell Ltd) he executed a voluntary surrender form in respect of the property. He voluntarily and unconditionally handed back vacant possession of the property to Permanent TSB. The form noted that the property was a residential property but he indicated that the property was held as an investment property. He indicated that the property was never his principal private residence. He said that the property was occupied by a tenant, Isabella (sic) Maria Dias (sic), the defendant in these proceedings. He informed Permanent TSB that there had been a tenant in the property for the last eighteen months and that he gave her notice to vacate the property four months prior to his surrender of the property to Permanent TSB. He said the tenant ignored his notice to vacate and had paid no rent in a number of months. He said the tenant signed a three year lease eighteen months ago but he no longer had a copy of the lease. This was the first notice that Permanent TSB had of the agreement between John Rooney and the defendant in relation to the property.

8 Originally the property comprised two separate properties which had been merged. The property had been let with the apparent knowledge of Irish Life and Permanent TSB to a company that ran a language school for a number of years but the company had gone into liquidation leaving unpaid rent due to Mr. Rooney. Mr. Rooney apparently then entered into an agreement with the defendant in September 2014. On one page the date is given as the 4th September and on another as the 1st September. Whatever may be the explanation for this inconsistency, it is stated to be an agreement for the letting of a business premises and the rent payable is €2,000 per month. The term is from the 1st August, 2014 to the 1st August, 2017. The letting is described as being a temporary convenience letting for the landlord/tenant but the rest of the Clause is left blank. Further conditions added in manuscript included:

‘That any existing agreement with other parties (Mary) concerning this premises are ended. Any existing disputes between landlord and tenant are deemed ended.

Tenant to repair windows in lieu of rent outstanding at this time.

Tenant to have public liability and fire insurance on premises at all times.

Tenant to keep fire alarm working and to ensure fire exits are free.

In the event of a sale of the premises, tenant to be allowed a ‘viewing’ at an agreed time once per week for required period,

Tenant to have an option to buy at market value at that time.

9 The agreement of September 2014 replaced an earlier agreement dated the 12th June, 2014. The agreement of 12th June, 2014 was between Mr. Rooney as landlord and Ms. Mary Lindon and Maria Isabel Diaz as the tenant. That agreement appears to be signed by the defendant but not by Ms. Mary Lindon. The added special condition 5 read ‘option to buy at €350,000’. However Special condition 3 of the September 2014 agreement expressly stated that any existing agreement concerning the premises ‘are ended’, so the June agreement has been superseded by the September agreement.

10 Following the acquisition of the charge, the plaintiff appointed Savills to manage the property and on the 10th July, 2015 a representative of Savills attended to inspect the premises. The keys furnished by Mr. Rooney to Permanent TSB would not work. It was not clear whether Mr. Rooney or the defendant had changed the locks. But the net effect was that the plaintiff had no access to the premises which had been surrendered to its predecessor in title. Savills conducted an inspection of the property in the presence of the son of the defendant. It was apparent that the property was being used as a guest house. It was being advertised on the website AirBnB. The representative from Savills was furnished with a schedule of booked guests who would stay at the premises up until 30th November, 2015.

11 On 17th August, 2015 solicitors then acting for the plaintiff wrote to the solicitors for the defendant pointing out that the tenancy agreement between Mr. Rooney and the defendant breached the terms of the mortgage between Mr. Rooney and the mortgagee. The letter pointed out that the mortgage provided that the mortgagor shall not grant or agree to grant any lease, tenancy, licence or part with possession or share possession or occupation of the property without the prior...