Ken Tyrrell v Sean O'Connor and Cormac O'Connor

• Jurisdiction: Ireland
• Judge: Ms. Justice Stack
• Judgment Date: 12 May 2022
• Neutral Citation: [2022] IEHC 274
• Court: High Court
• Docket Number: [Record No. 2021/2718 P]

Between

Ken Tyrrell

Plaintiff

and

Sean O'Connor and Cormac O'Connor

Defendants

[2022] IEHC 274

[Record No. 2021/2718 P]

THE HIGH COURT

Interlocutory injunction – Possession – Property – Plaintiff seeking interlocutory relief – Whether the proceedings were brought solely to achieve the sale of the property

Facts: The plaintiff, Mr Tyrrell, applied to the High Court for interlocutory relief, seeking possession of the property comprised in Folio 67632F, County Cork, together with ancillary orders in the usual terms preventing the defendants, Messrs O’Connor, from impeding and/or obstructing the plaintiff from taking possession, ordering the defendants to deliver up to the plaintiff forthwith any keys, alarm codes and/or other security and access devices as may be in their possession, restraining them from collecting rents or otherwise holding themselves out as the party entitled to let the property, and so on. The first defendant was the sole registered owner of the property. The property was the subject of a charge dated 18 April 2007 executed by the first defendant in favour of Ulster Bank Ireland Ltd (the Charge). Mr Tyrrell stated on affidavit that he was appointed as receiver over certain assets of the first defendant, including the property, by deed dated 9 January, 2019. He also stated that, by agreement dated 19 May, 2020, he was appointed as agent of Promontoria (Oyster) DAC (PODAC), the chargeholder. The first defendant suggested that the assignment of his loan to PODAC was void as it “savoured of” maintenance and champerty and was therefore void. Objection was made on the basis that the Charge provided for the appointment of a “receiver and manager”, whereas the deed of appointment provided for the appointment of the plaintiff solely as a “receiver”. The first defendant relied on Charleton v Hassett [2021] IEHC 746 for the proposition that the plaintiff, even in his capacity as agent of PODAC, had no entitlement to possession by way of interlocutory injunction, but should proceed to institute proceedings pursuant to s. 62(7) of the Registration of Title Act 1964, which continued to apply to charges created prior to 1 December, 2009, by virtue of s. 1 of the Land and Conveyancing Law Reform Act 2013. The first defendant made various objections to the alleged data protection breach in transferring the information in relation to his loans and associated security to PODAC. The first defendant relied on s. 91 of the Land and Conveyancing Law Reform Act 2009 so as to require the plaintiff (or PODAC) to produce to him all the documents of title relating to the secured property.

Held by Stack J that it was clear from the plaintiff’s affidavit that the proceedings were brought solely to achieve the sale of the property, a power the receiver did not have under either the Charge or the Conveyancing Act 1881. Stack J noted that the application was not brought to regularise matters pending trial, such as by permitting a chargeholder or a receiver acting on its behalf, to receive the rents and profits or to manage the property during that period. Stack J held that it was, therefore, an attempt to obtain summary judgment by way of an interlocutory injunction, and was therefore contrary to the Supreme Court authority of Charleton v Scriven [2019] IESC 28.

Stack J refused the relief sought in the notice of motion.

Application refused.

JUDGMENT of Ms. Justice Stack delivered on the 12th day of May, 2022.

Introduction

1 This is an application for interlocutory relief in which the plaintiff seeks possession of the property comprised in Folio 67632F, County Cork, together with ancillary orders in the usual terms preventing the defendants from impeding and/or obstructing the plaintiff from taking possession, ordering the defendants to deliver up to the plaintiff forthwith any keys, alarm codes and/or other security and access devices as may be in their possession, restraining them from collecting rents or otherwise holding themselves out as the party entitled to let the property, and so on.

2 The first defendant is the sole registered owner of the property, although it seems that the second defendant was sued as he was claiming an interest in it. However, it appears that the plaintiff has come to an arrangement with the second defendant, who accordingly did not take part in the interlocutory application.

3 The property comprises approximately one acre and is situate approximately one kilometre from Kilbrittain village in County Cork, and comprises two warehouses, an office and a yard, which has been used as a bus depot. The second defendant resides in the adjoining property which is not the subject matter of these proceedings.

4 The property is the subject of a Charge dated 18 April 2007 executed by the first defendant in favour of Ulster Bank Ireland Limited (“the Charge”) which disapplies ss. 17 and 20 of the Conveyancing Act, 1881, but does not contain any provision disapplying s. 19 of the 1881 Act and the Charge is therefore to be read as if the statutory power to appoint a receiver is contained in it. Clause 11 of the Charge extends the statutory powers of any receiver so appointed and Clause 12 contains the usual provision to the effect that any receiver so appointed is deemed to be the agent of the first defendant.

5 Mr. Tyrrell states on affidavit that he was appointed as receiver over certain assets of the first defendant, including the property, by deed dated 9 January, 2019. He also states that, by Agreement dated 19 May, 2020, (“the Agency Agreement”) he was appointed as agent of Promontoria (Oyster) DAC (“PODAC”), the chargeholder.

6 The proofs are put on affidavit by Ms. Adrienne Fitzgibbon, a senior manager of BCMGlobal ASI Ltd, which has been appointed by PODAC to provide loan administration, relationship and asset management services in respect of the first defendant's loan facilities and related securities.

7 Ms. Fitzgibbon says at para. 2 of her affidavit that she has responsibility for the day to day administration and management of the first defendant's Loan Facilities and at para. 3 that she has had access to the books and records of PODAC having relevance to these proceedings and that she makes her affidavit from a perusal of those books and records or, where otherwise appears, in the belief that the facts she is averring to are true and accurate. She also confirms her authority to make the affidavit for and on behalf of PODAC.

Evidence in relation to loan, securities, and powers of the plaintiff

8 Ms. Fitzgibbon refers to and exhibits a Facility Letter dated 17 February, 2014, whereby Ulster Bank Ireland Ltd agreed to advance to “the partnership of Sean O'Connor and Elizabeth Long” (collectively, the “Borrower”), a loan facility in the sum of “up to €321,850.00” subject to the terms and conditions contained therein. The facility letter provides that the loan will be drawn down by a single advance and, in Clause 7, it provided that the Borrower would repay the loan and interest by the repayment date, which was 31 January, 2019.

9 Some issue was taken at hearing with the fact that the receiver was appointed prior to that date. However, I am satisfied that nothing arises on this point, because Clause 7.2 provides that prior to the Repayment Date, the Borrower was to make 59 monthly instalments of €2,555.24 and then a final instalment sufficient to pay the outstanding balance of the Loan and Interest in full by the Repayment Date. Furthermore, Clause 8.1. provided that the first instalment was due on 28 February, 2014, with subsequent instalments due monthly thereafter.

10 Clause 17.1 provided that if any Event of Default as specified in the Facility Letter occurred, then the bank could demand immediate repayment of the Loan, all interest accrued and all other sums payable by the Borrower under the terms of the Facility Letter, and could also stop the drawing of any undrawn part of the loan. One of the Events of Default as so defined was the failure to pay any amount payable under the Facility Letter on its due date.

11 Therefore, if any of the instalments were missed, the entire sum would become immediately repayable and consequently the power to appoint the receiver would then arise under s. 19 of the 1881 Act. Provided therefore, the fact that the loan amount had become due and owing before that date has been proved on affidavit, the mere fact that the receiver was appointed prior to the ultimate repayment date originally provided for does not create any legal impediment to his appointment.

12 However, the first defendant says that the fact that the debt is due has not been proven. His first submission is that Ms. Fitzgibbon does not actually say explicitly in her affidavit at any point that the first defendant is in default in his payments, and this is correct. However, she does state at para. 29 that, by letter dated December 2018, PODAC wrote to the first defendant in connection with the Facility and the related Mortgage, and that this letter noted that, as of 3 December, 2018, the amount due and owing by him under the Facility Letter was €301,463.01, with a daily rate of interest accruing at €38.42 per day. Formal demand for repayment was made, and she exhibits the demand letter.

13 As the Facility Letter provides for repayment by way of 59 monthly instalments of €2,555.24 with a requirement for a final instalment in a sum sufficient to pay the outstanding balance of the Loan and interest in full by 31 January, 2019, it appears that this letter is necessarily asserting that the first defendant has defaulted on his obligation to repay in accordance with the terms of the Facility Letter. Furthermore, Ms. Fitzgibbon says that the first defendant has failed, refused and/or neglected to discharge the sum of “€301,463.01 or any sum” to PODAC. This seems to me to be a clear statement that none of that sum has been paid...