Kearney v Bank of Scotland Plc
| Jurisdiction | Ireland |
| Judge | Mr. Justice Brian O'Moore |
| Judgment Date | 04 November 2022 |
| Neutral Citation | [2022] IEHC 605 |
| Court | High Court |
| Docket Number | [2017 11335 P] |
[2022] IEHC 605
[2017 11335 P]
[2018 17 COM]
THE HIGH COURT
COMMERCIAL
Isaac Wunder order – Lites pendentes – Appointment of receiver – Plaintiff seeking an order varying an Isaac Wunder order – Whether the appointment of the second defendant as receiver was valid
Facts: The plaintiff, Mr Kearney, issued proceedings by way of plenary summons on 13th December, 2017. The defendants, Bank of Scotland plc (BOS) and Mr Horkan, issued motions seeking the dismissal of the appellant’s claim. On 4th May, 2018, the High Court (McGovern J) dismissed the appellant’s proceedings, made an order pursuant to s. 123(b)(i) of the Land and Conveyancing Law Reform Act 2009 that lites pendentes registered by the appellant against two folios be vacated and further imposed an Isaac Wunder order against him. The appellant appealed to the Court of Appeal from the judgment and orders of the High Court. On the 8th of April 2020, Whelan J ([2020] IECA 92) held that, insofar as the claims were based on the cross-border merger and sought to impugn same or to assert that the security never vested in BOS, the proceedings constituted an abuse of process, were doomed to failure, and the appellant had no reasonable prospect of obtaining relief in regard to same. Turning to the issue of the validity of Mr Horkan’s appointment as receiver, Whelan J held that this issue was at least arguable and the interests of justice warranted that the appellant’s appeal be allowed on that narrow ground. In Whelan J’s view, in its iteration the Isaac Wunder order was arguably somewhat excessive. Whelan J held that the said orders needed to be varied. In lieu thereof, Whelan J held that an order was required restraining the appellant, his servants, agents or proxies, from instituting any proceedings, which sought to impugn the validity of the cross-border merger; the title of BOS to the said charges registered on Part 3 of the Folios; the validity of the disposition of the said charges by BOS or any successor in title including, but not limited to, Pentire Property Finance Ltd; the right of BOS to appoint the receiver, without the prior leave of the President of the High Court, or some other judge nominated by him. Whelan J held that an order was properly made by the High Court pursuant to s. 123(b)(i) of the 2009 Act vacating the lites pendentes registered against the folios. Whelan J held that the appeal would otherwise be dismissed. Mr Kearney sought a review of that judgment. On the 5th of August 2020, Whelan J ([2020] IECA 224) ordered that the proceedings be remitted to the High Court for determination of the question whether the appointment of Mr Horkan as receiver by deed of appointment dated 5 July 2012 was valid pursuant to clause 8.1 of the charge conferring on the mortgagee the power to appoint a “receiver and manager” over the secured property. By notice of motion returnable to the 9th of December 2021 Mr Kearney sought an order varying the Isaac Wunder order as was placed on him, thus permitting him to be heard on a narrow point of contractual relevance opposing the receivership of Mr Horkan under his deed of novation as entered into in August 2020.
Held by O’Moore J that, following the decision and analysis in Fennell v Corrigan [2021] IECA 248, and having considered the very similar mortgage and deed of appointment in this case, the appointment of Mr Horkan had been done within the terms of the mortgage and charge. O’Moore J answered the Special Case with a finding that the appointment of Mr Horkan was valid and effective, deciding the question posed against Mr Kearney, and in favour of BOS and Mr Horkan.
O’Moore J refused the relief sought by Mr Kearney in his motion seeking to vary the existing Isaac Wunder order. O’Moore J held that the issue which Mr Kearney wished to agitate was bound to fail, was frivolous and vexatious, and would constitute an abuse of process. O’Moore J held that requiring the existing defendants (as well as others) to defend this claim would be oppressive. O’Moore J held that the proposed claim also offended against the principles set out in Henderson v Henderson [1843] 3 Hare 100.
Relief refused.
JUDGMENT of Mr. Justice Brian O'Moore delivered on the 4 th day of November, 2022
. This judgment will be arranged under the following headings:-
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(i) Background
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(ii) The question remitted to this Court by the Court of Appeal
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(iii) The further question raised on behalf of the plaintiff
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(iv) Conclusion.
. The background to the hearing before me is, in large measure, set out in one of the judgments of Whelan J. in the Court of Appeal in these proceedings. The judgment bears the neutral citation [2020] IECA 92. It is dated the 8 th April 2020. As the procedural history of the various actions taken by the plaintiff, Mr. Kearney, is of importance (particularly in respect of the fresh issue raised by Mr. Kearney), I will set it out in some detail. In large measure, I will be paraphrasing the summary contained in the judgment of Whelan J. to which I have just referred.
. Mr. Kearney was advanced a number of loan facilities by Bank of Scotland (Ireland) Ltd. between June 2003 and November 2006. These loans were secured by way of a deed of mortgage and charge dated the 14 th January 2004. While Mr. Kearney repaid some of these loans, he defaulted in relation to a number of them.
. On the 31 st of December 2010, all of the assets and liabilities of Bank of Scotland (Ireland) Ltd. (“BOSI”) were transferred to Bank of Scotland plc. (“BOS”). The mortgage of the 14 th of January 2004 (“the mortgage”) was eventually registered in the Land Registry on the 20 th of August 2013. At that time, the mortgage was registered in the name of BOS, given the transfer of BOSI's interests in the facilities and the securities to that entity.
. On the 5 th of July 2012, the second defendant, Mr. Horkan, was appointed receiver by BOS.
. I now summarise the numerous proceedings taken by either Mr. Kearney or his wife in respect of these facilities.
. The first set of proceedings commenced in 2012. In them, Mr. Kearney challenged the validity of the charges registered against the secured property, and the validity of the appointment of Mr. Horkan. By order made on the 18 th of November 2014, Kearns P. dismissed these proceedings on foot of a motion taken by BOS and Mr. Horkan. This motion sought the dismissal of Mr. Kearney's 2012 proceedings on the grounds that the claim was frivolous, vexatious, disclosed no cause of action or is otherwise bound to fail. Mr. Kearney applied for an extension of time within which to lodge an appeal against the order of Kearns P., but this was refused by the Court of Appeal on the 23 rd of February 2015. The ground for this refusal was that Mr. Kearney had not established any arguable grounds. Mr. Kearney the applied to the Supreme Court for leave to appeal against this refusal, but the application to the Supreme Court was itself refused on the 3 rd of November 2015.
. Before moving on to the subsequent actions taken in respect of these facilities, I should note that on the 29 th November 2014, BOS assigned the security CarVal Investors UK Limited, who subsequently transferred the interest to Pentire Property Finance Limited (“Pentire”) on the 20 th of April 2015.
. The second relevant proceedings were taken by Mr. Kearney's wife in September 2017. Mr. Horkan had placed the secured property for sale on the open market on the 7 th of September 2017. Eight days later, on the 15 th of September 2017, Mrs. Fidelma Kearney issued proceedings against BOS, Mr. Horkan and (ultimately) Pentire. These proceedings were discontinued on the 16 th of November 2017. In respect of Mrs. Kearney's action, Whelan J.'s commented:-
“There is no evidence that (Mrs. Kearney) [acted as agent or proxy for Mr. Kearney] in this regard”. (Para. 9 of the judgment).
In her proceedings, Mrs. Kearney asserted an interest in the secured property as against BOS.
. On the 29 th of November 2017 Mr. Kearney instituted further proceedings against Mr. Horkan relating to the secured property. These proceedings were discontinued.
. The current proceedings were instituted by plenary summons dated the 13 th of December 2017. BOS and Mr. Horkan issued motions seeking the dismissal of Mr. Kearney's claim, again on the grounds that it was frivolous, vexatious, disclosed no cause of action or was otherwise bound to fail. At para. 12 of her judgment, Whelan J. summarised the claims made in Mr. Kearney's statement of claim. She does so by reducing them to three main arguments:-
“i. The Registration Claim – that the charge was not registered in the name of BOSI in the Land Registry. and such registration was required before the charge could be transferred to BOS….
ii. The Indebtedness Claim – that the sums claimed on foot of the mortgage are not lawfully due and owing to any person or entity ….
iii. The Receiver Claim – the appointment of the receiver was invalid due to BOS not having registered itself as the owner of the charge. The deed of appointment of 5 th July, 2012 failed to comply with clause 8.1 of the mortgage and was invalid, void and ‘a false instrument’ ……”
. It is the last of these arguments that ultimately finds its way to me for determination. However, before considering the issue referred to this Court by the Court of Appeal, it is necessary to complete the history of the proceedings.
. The High Court dismissed the proceedings on the grounds they disclosed no reasonable course of action, were unsustainable, frivolous and vexatious, and constituted an abuse of process. It also found that much if not all of the claims made in the current proceedings were taken in violation of the ruling in Henderson v. Henderson [1843] 3 Hare 100, as...
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