Hinde v Pentire Property Finance dac
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 25 September 2018 |
| Neutral Citation | [2018] IEHC 520 |
| Court | High Court |
| Docket Number | [2018 3606 P.] |
| Date | 25 September 2018 |
AND
[2018] IEHC 520
[2018 3606 P.]
THE HIGH COURT
Cause of action – Bound to fail – Lis pendens – Defendants seeking an order striking out the plaintiff’s proceedings – Whether the plaintiff’s proceedings disclosed a cause of action
Facts: The plaintiff, Ms Hinde, sought: (1) a declaration that the purported appointment by the first defendant, Pentire Property Finance dac, of the second defendant, Mr Kavanagh, as receiver and manager of the property designated as all that and those the dwelling house known as 22 The Beeches, New Road, Straffan, Co. Kildare (the property) was invalid, void and of legal effect; (2) an order setting aside the purported appointment of the second defendant as receiver of the property; (3) a declaration that the purportedly transfer of the Bank of Scotland loan connected to the property by way of purchase deed from Bank of Scotland plc to CarVal Investors UK Ltd on or about 29th November, 2014 was invalid, void and of no legal effect; (4) a declaration that the purported transfer of the Bank of Scotland loan connected to the property to Pentire Finance Property Ltd on or about 20th April, 2015 was invalid, void and of no legal effect; and (5) a declaration that the first defendant was not entitled to enforce the loan connected to the property purportedly transferred to the first defendant on or about 20th April, 2015. The plaintiff sought an order for taking of account and inquiries and damages for trespass, negligence, breach of duty and/or tortious interference with contractual relations, and interest and costs. By notice of motion dated the 5th June, 2018 the defendants applied for an order striking out the plaintiff’s proceedings pursuant to O. 19, r. 28 of the Rules of the Superior Courts on the grounds that they did not disclose a cause of action and/or pursuant to the inherent jurisdiction of the court on the grounds that they were frivolous and vexatious and bound to fail. In addition, the defendants sought an order pursuant to s. 123(b)(i) of the Land and Conveyancing Law Reform Act 2009 to vacate the lis pendens registered on 24th April, 2018 by the plaintiff.
Held by the High Court (Costello J) that the onus was on the plaintiff to put forward a credible basis for suggesting that it may be possible at trial to establish the facts which were asserted and which were necessary for succeeding in the proceedings. Costello J held that the plaintiff had not done so. Based on the matters placed before the court, Costello J concluded that this was one of those cases where it was appropriate to exercise the inherent jurisdiction of the court to dismiss a claim as being bound to fail. Accordingly, Costello J concluded that, as the proceedings were bound to fail, so their continuance would constitute an abuse of the process of the court and effect an injustice on the defendants. Costello J therefore dismissed the plaintiff’s claim.
Costello J held that as long as the lis pendens remained on the register, the receiver could not conclude the sale of the property and there was a risk that the contract for sale may fall by the wayside. On the facts before the court, Costello J could find no legal basis on which the lis pendens registered in respect of the property against either defendant should be allowed to stand. Accordingly, Costello J directed that the lis pendens be vacated.
Application granted.
On the 9th August, 2006 the plaintiff, then of an address in Newcastle, Co. Dublin, accepted an offer from Bank of Scotland (Ireland) Ltd. dated 7th June, 2006 for a loan of €385,000 to be secured by way of a first fixed charge over No. 22 The Beeches, Straffan, Co. Kildare and any car parking spaces thereon. The loan (‘the Loan’) was governed by and to be construed in accordance with the laws of Ireland.
By a mortgage and charge dated 24th August, 2006 the plaintiff charged the property to Bank of Scotland (Ireland) Ltd. and the mortgage was registered in the Registry of Deeds, registration number 2006191261(‘the Mortgage’). The deed was governed by and to be construed in accordance with the laws of Ireland.
By virtue of a cross-border merger pursuant to the European Communities (Cross-Border Mergers) Regulations 2008 of Ireland and the Companies (Cross-Border Mergers) Regulations 2007 of the United Kingdom, approved by the High Court of Ireland on 22nd October, 2010 and approved by the Scottish Court of Session on 10th December, 2010, all of the rights and obligations of Bank of Scotland (Ireland) Ltd. under the loan and the mortgage became vested in Bank of Scotland plc. with effect from 31st December, 2010. Bank of Scotland plc. is a company incorporated under the laws of Scotland.
On the 29th November, 2014 Bank of Scotland plc. entered into a purchase deed with CarVal Investors UK Ltd. (‘CarVal’). CarVal is a company incorporated in England. The purchase deed defines Bank of Scotland plc. as the seller and CarVal as the purchaser. It provides as follows:
‘Background
(1) The seller is the legal and beneficial owner of the purchased assets.
(2) The seller agrees to sell and the purchaser agrees to purchase the Purchased Assets and to assume the Assumed Obligations on the terms and conditions of this Deed.
‘Borrower’ means the borrower or borrowers under any Finance Agreement and as specifically set out in Part A of Schedule 1 and any person who has or may have obligations either jointly or each of them severally in respect of such facility and the terms borrowers shall be construed accordingly.
‘Closing Date’ means 20th April, 2015 or such later date as the parties agree in writing provided that such date should not be later than the long stop date.
‘Facilities’ means the outstanding loans linked to the borrower's primary accounts and related to some accounts to be purchased by the purchaser pursuant to this deed and facility means any one of them, as the context requires.
‘Purchased Assets’ means
(a) the facilities;
(b) the related security;
(c) any and all of the seller's rights, title and interest
(i) in and to the rent, claims and other rights of the seller;
(ii) in and to any net collections; and
(iii) in and to any non-cash distributions with respect to the Facilities, in each case arising or received after the cut-off date;
(d) any and all of the seller's rights, title, interest and benefit in the finance agreements; and
(e) the ancillary rights and claims.
(2) Sale and Purchase
The seller agrees as legal and beneficial owner to sell to the purchaser the purchased assets and the purchaser agrees to purchase the purchased assets and assume the assumed obligations, such sale to take effect on the closing date in accordance with and subject the terms and conditions of this deed.
6.1 Closing Date
Closing shall take place on the closing date and the purchaser and the seller agree that on such date the sale and transfer referred to in Clause 2 (sale and purchase) shall occur and the purchaser shall be deemed to have assumed, and shall perform and comply with all of the assumed obligations as if the purchaser was originally named as a party to the purchased assets and the seller shall be released from the assumed obligations with effect from the closing date.
6.4 Transfer of Title to the Facilities
(a) At closing, the following shall occur:
(i) upon receipt by the seller of the provisional settlement amount from the purchaser (and for the avoidance of doubt, transfer of the purchase assets shall be deemed to have occurred upon receipt of the said provisional settlement amount), all such rights, title and interest as the seller may have in and to the purchase assets (subject to and with the benefit in case of the related finance agreements) shall transfer under the relevant transfer documents to the purchaser.
29. Governing Law
This deed and all non-contractual obligations arising from or connected with it shall be construed in accordance with and governed by the laws of Ireland.’
The schedule to the purchase deed included the Loan and the Mortgage.
By deed of novation dated 12th December, 2014 between CarVal, Pentire Property Finance Ltd. (‘Pentire’) and Bank of Scotland plc. the purchase deed dated 29th November, 2014 was novated on the following terms. CarVal was described as the transferor, Pentire was described as the transferee and Bank of Scotland plc. was described as the continuing party. The effective date of the deed was the 12th December, 2014. The deed provided:
‘Background
(A) This deed is supplemental to a loan purchase deed dated 29th November, 2014 between, the transferor and the continuing party (the ‘purchase deed’).
(B) On the effective date (defined below), the transferor will novate the entire of its rights and obligations under the purchase deed to the transferee and the continuing party has agreed to the novation.
2. Novation and Transfer
(a) On the effective date the transferor will novate and transfer all its rights, title, interest, obligations and liabilities, howsoever described or arising, under the purchase deed to the transferee.
(b) The novation and transfer referred to in Clause 2(a) will take place on the effective date.
3. Novation of Purchase Deed
3.1. The parties hereby agree, as and with effect from the effective date, that the transferee shall be and is hereby substituted in place of the transferor as a party to the purchase deed and that the purchase deed shall be treated in all respects as if the transferee had been, from the date of execution, the original party to the purchase deed instead of the transferor.
3.2. The transferee hereby accepts the liabilities of the transferor under the purchase deed...
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