Ken Fennell v Gilroy
|Ms. Justice Máire Whelan
|09 November 2022
| IECA 258
|Court of Appeal (Ireland)
|Appeal Number: 2021/50
 IECA 258
Appeal Number: 2021/50
THE COURT OF APPEAL
Receivership – Injunctions – Standing – Appellant appealing against perpetual injunctions restraining the appellant from interfering and obstructing or in any way preventing the respondent from exercising his powers and functions as receiver over the property – Whether the appellant had standing to defend the proceedings
Facts: The plaintiff/respondent, Mr Fennell, instituted proceedings by way of plenary summons on the 4th February, 2016 seeking interlocutory orders against the defendants, Mr Gilroy, Mr Prado, Ms Waliszewska trading as Sun Body Solarium, Mr O’Callaghan, Mr Jurkiewicz and Mr Fluskey, restraining them from interfering with the receivership of the respondent. That receivership arose in the context of default alleged to have arisen in a mortgage entered into on the 29th September, 2009 between AIB Mortgage Bank and Allied Irish Banks, plc as mortgagees and Mr Noone as mortgagor. The dual mortgage identified the mortgaged property in the Schedule to same as “the property known as 131D Slaney Road, Dublin Industrial Estate, Glasnevin, Dublin 11 in Folio 6964F County Dublin”. The mortgagor executed the said mortgage instrument. By judgment delivered by Sanfey J on the 15th January, 2021 and the ensuing order of the 11th February, 2021 perfected on the said date, the counterclaim of the first defendant/appellant was dismissed and perpetual injunctions restraining the defendants from interfering and obstructing or in any way preventing the respondent from exercising his powers and functions as receiver over two properties were granted. The first was the property known as 131D Slaney Road, Dublin 11 comprised in Folio 6964F County Dublin (Slaney Road) and the second 89D Lagan Road, a property comprised in Folio 182881F of the Register of Freeholders, County Dublin. The appellant appealed to the Court of Appeal from the judgment and orders in proceedings 2016/948P which pertained to the Slaney Road property. The appellant contended that the trial judge erred in his judgment and in making the orders referred to above and sought that same be set aside.
Held by Whelan J that the trial judge was entirely correct in his evaluation of the relevant facts and the application of the material legal principles to same. She held that the appellant had no standing to defend the proceedings. She was satisfied that there was no infirmity or frailty in connection with the appointments of the receiver over the security properties. She held that no ground or argument advanced in the appeal had any validity.
Whelan J held that the appeal fell to be dismissed on all grounds. The respondent having been entirely successful in resisting the appeal and no ground of appeal having succeeded, her provisional view was that the respondent was entitled to his costs of same when taxed and ascertained.
JUDGMENT of Ms. Justice Máire Whelan delivered on the 9th day of November 2022
. This is an appeal from the judgment of Mr. Justice Sanfey delivered on the 15 th January, 2021 and the ensuing order of the 11 th February, 2021 perfected on the said date, dismissing the appellant's counterclaim and granting perpetual injunctions restraining the defendants from interfering and obstructing or in any way preventing the plaintiff/receiver from exercising his powers and functions as receiver over two properties. The first is a property known as 131D Slaney Road, Dublin 11 comprised in Folio 6964F County Dublin (Slaney Road) and the second 89D Lagan Road, a property hitherto comprised within Folio 35527F County Dublin and later carved from the said Folio and now comprised in Folio 182881F of the Register of Freeholders, County Dublin.
. At the outset, it should be said that there were two separate sets of proceedings before the High Court, Record No. 2016/948P which pertained to the Slaney Road property and Record No. 2016/949P which pertained to the Lagan Road property. Moreover, this appeal is exclusively brought by the first named defendant. None of the other defendants engaged with the proceedings to any material extent. That appellant has appealed only the judgment and orders in proceedings 2016/948P which pertain to the Slaney Road property and accordingly, this judgment is confined to same.
. The proceedings were instituted by way of plenary summons by the receiver on the 4 th February, 2016 seeking interlocutory orders against the defendants restraining them from interfering with the receivership of the plaintiff. That receivership arose in the context of default alleged to have arisen in a mortgage entered into on the 29 th September, 2009 between AIB Mortgage Bank and Allied Irish Banks, plc as mortgagees and Christopher Noone as mortgagor. The dual mortgage identified the mortgaged property in the Schedule to same as “the property known as 131D Slaney Road, Dublin Industrial Estate, Glasnevin, Dublin 11 in Folio 6964F County Dublin.” The mortgagor executed the said mortgage instrument. The appellant contends that the trial judge erred in his judgment and in making the orders referred to above and seeks that same be set aside.
. On the 13 th October, 2009, approximately two weeks after execution of the said mortgage, Mr. Christopher Noone came to be registered as full owner of the lands in Folio 6964F (the Folio) at entry no. 3 in Part 2 of same.
. Of relevance in the context of the rights of charge holders is the following: that in the first instance and on the same date Allied Irish Banks, plc and AIB Mortgage Bank were both registered as the owners of charges on the said Folio as tenants in common in undivided shares on terms expressly providing; “the owner's share at any time being the proportion that the debt owing to the owner secured by charge bears to the total debt owing to the owners in common secured by the charge.” That state of affairs continued for almost two years. However, on the 22 nd August, 2011 a modification of the mortgage burden on the Folio was effected and AIB Mortgage Bank was discharged as charge holder.
. Thus, by act and operation of law with effect from the 22 nd August, 2011, all the rights vested in the mortgagee pursuant to the said mortgage of the 29 th September, 2009 thereupon vested in Allied Irish Banks, plc alone.
. This is noteworthy for a number of reasons including, in particular, that in 2011 proceedings were instituted by the mortgagee against the borrower, Mr. Christopher Noone, arising from defaults alleged in relation to the payment and discharge of the said mortgage. On the 20 th October, 2011, judgment in the sum of €2,181,120.95 was obtained by the mortgagee, who at that date for the reasons outlined above was Allied Irish Banks, plc alone.
. With regard to the summary proceedings, it is noteworthy that the mortgagor, Mr. Noone, took no step to enter an appearance. Neither did he bring any application before the High Court over the intervening decade to have the said judgment, which was marked in the office on the 20 th October, 2011, set aside on any basis. Thus, it stands unappealed and in full force and effect.
. Following delivery of a very comprehensive written judgment on 15 th January 2021, Sanfey J., made orders as outlined above including a perpetual injunction restraining the defendants from interfering with, obstructing or in any other way preventing the receiver from exercising his lawful power to enter upon and take possession of the said property and further restraining them, their respective servants or agents or anyone acting in concert with them from trespassing on the said property. The notice of appeal filed by Mr. Gilroy on the 10 th March, 2021 identifies nine separate grounds of appeal and seeks an order that the respondent, Mr. Ken Fennell, is not a validly appointed receiver and has no power of sale, together with an order for costs.
. A critical issue before the High Court was the standing of Mr. Gilroy to defend the matter at all or pursue the issues raised by him in the Defence and Counterclaim delivered. The issue is raised, inter alia, at Ground 9 of the Notice of Appeal but warrants some consideration otherwise.
. At a date not specified by Mr. Noone in his evidence or under cross-examination at the hearing of this matter before the High Court, the mortgagor put Mr. Gilroy into occupation of the upper floor of Slaney Road. Mr. Noone gave evidence on the 15 th January, 2020 in the course of the substantive hearing before the High Court. At p. 28 of the Transcript Mr. Noone's evidence was:-
“Line 9 – And he was going to do a dance studio.
Line 13 – Slaney Road was different.”
In response to the question: –
“And when were those agreements reached then; was it 2009, 2010, 2011? You are the person who reached this agreement?
Answer – “ I don't know. It's vague because I know it was pre-receivership because Mr. Gilroy was in there. I used to pop into him when I would be collecting rents off the other lads downstairs, you know, and I'd pop in and see him, you know.” (p. 28, line 16–18)
Mr. Noone further stated at p. 28, line 24: –
“It was a very loose arrangement” … In other words, Mr. Gilroy was doing something which I perceived to be very good for the country and I said ‘yes you can have these offices here you can have them indefinitely’, that's the way I said it to him.”
In response to a query whether it was intended that the arrangement would last forever he stated at p. 29, line 3: –
“I wouldn't say forever. Forever is a long time, you know.”
He further stated at...
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