Kennedy v O'Kelly

CourtCourt of Appeal (Ireland)
JudgeMr Justice Maurice Collins,Ms. Justice Ní Raifeartaigh
Judgment Date22 October 2020
Neutral Citation[2020] IECA 288
Docket Number[2018/330]
Date22 October 2020

[2020] IECA 288

Ní Raifeartaigh J.

Power J.

Collins J.




JUDGMENT of Ms. Justice Ní Raifeartaigh delivered on the 22 nd day of October, 2020
The nature of the case

The plaintiff is a receiver who in the substantive proceedings seeks a declaration that he was validly appointed in respect of certain property, together with associated reliefs, including a declaration that he is entitled to take possession of the property and an order restraining the defendant from attempting to frustrate his activities as receiver. The property in question is a residential dwelling house and will be referred as “the property”. The High Court granted him an interlocutory injunction, against which the notice party (but not the defendant) has brought this appeal. There must be a question as to whether the notice party has standing to maintain an appeal in such circumstances, but as the issue was not pressed by the plaintiff, I do not propose to deal with it.


The essence of the notice party's case is that she had a tenancy agreement with the defendant/mortgagor and that she is now entitled to the protections accruing to a tenant under the Residential Tenancies Act, 2004, notwithstanding that this agreement was reached in breach of a covenant in the mortgage prohibiting such a tenancy without the prior agreement of the mortgagee. She argues that the injunction should have been refused. A key question in this appeal is whether there is any relationship of landlord-tenant as between the plaintiff-receiver/ respondent and the notice party/appellant, in circumstances where the notice party/appellant clearly rebuffed the Receiver's repeated attempts to engage with her, having regard in particular to the decision in Fennell v. N17 Electrics Limited [2012] IEHC 228, [2012] 4 IR 634 and/or whether s.59 of the Act of 2004 applies. In order to properly examine the appellant's argument, it will be necessary to set out the correspondence between her and the Receiver at some length in this judgment.

The Background to the proceedings

On the 6 th August 2004, by Deed of Mortgage to the defendant, the defendant granted INBS a charge over the property. The mortgage was registered in favour of INBS on 19 January 2005 at entry No. 4, Part 3 of Folio 112383F, Co. Dublin.


By a Facility letter dated 23 rd March, 2005, Irish Nationwide Building Society (“INBS”) granted certain refinancing facilities to the defendant. The required security for the facility included a First Legal Charge over the property comprised in Land Registry Folio 112383F.


The mortgage was a first ranking charge registered on the property.


Clause 11(l) of the mortgage provided as follows:

“The Mortgagor hereby further covenants with the Society as follows… (l) Not to assign or let or part with the possession of the Mortgaged Property, or any part thereof, without the prior consent in writing of the Society and further that the Mortgagor shall not exercise the statutory power of leasing or agreeing to lease or accepting or agreeing to accept a surrender of a lease or tenancy without the prior consent in writing of the Society…”.


On 1 st July, 2011, the High Court made a Transfer Order under the Credit Institutions Stabilisation Act, 2010 whereby all the assets and liabilities of INBS were transferred to Anglo Irish Bank Corporation Limited which in turn changed its name to Irish Bank Resolution Corporation Limited (“IBRC”), effective 14 th October, 2011.


By Loan Sale Agreement dated 31 st March, 2014, IBRC acting through its Special Liquidators agreed to sell the mortgage and related rights to MARS Capital Ireland Designated Activity Company (hereinafter “MARS”). The loan agreement was completed by Deed of Transfer made on 6 th June, 2014.


Entry No. 5 on the Folio relating to the property dated the 26 June 2014 shows Mars Capital Ireland Limited as the owner of the charge.


On 17 th August, 2015, MARS demanded repayment of the balance due on the mortgage account and detailed the arrears outstanding at that time. It called upon the defendant to pay all the monies due within seven days of that letter.


The defendant failed to make repayments and the plaintiff was appointed as Receiver by way of Deed of Appointment of Receiver dated 21 st April, 2016. The plaintiff is a Director and Senior Partner with Sherry Fitzgerald Kennedy Lowe.

Correspondence between the plaintiff (Receiver) and the defendant (mortgagor) and notice party (tenant at the property)

The correspondence between the plaintiff and the defendant and notice party is relevant not only by way of background but for a resolution of the issues in this case and I therefore set it out in some detail.


By letter dated 25 th April, 2016, solicitors for MARS (McDowell Purcell Solicitors) wrote to the defendant notifying him of the appointment of the Receiver and attaching a copy of the Deed of Appointment.


On 26 th April, 2016, the next day, the plaintiff wrote to the occupier of the property, believing there to be a tenant in occupation. The Deed of Appointment was attached to the letter, and the letter was addressed to “The Occupiers” on Sherry Fitzgerald paper. It said:

“Dear Tenants,

I refer to the appointment of Michael Kennedy of this office as Receiver over the above assets by MARS Capital in accordance with the powers contained in the Mortgage Deed and Banking Law. [MARS] Capital are now your current landlord and the owners have been advised of this change of status.

This is a legal appointment recognised by the law courts. In practice what this means is that we are appointed managing agents for the property on a 24 by 7 basis for all issues to do with the property including the rent.

The owner has been advised that we are appointed to make all the necessary property decisions going forward.

Please note that all rent payment will be directed to our office with immediate effect. See enclosed standing order form with bank details.

In the event that the owner/landlord contacts you in regard to any issue to do with the property you are to direct them to myself at my office address above and we will liaise with them as required. I have attached for your information a copy of the Deed of Appointment.

I would be grateful if you would phone me on [phone number given] as soon as you receive this letter and I will organise a trip out to the property to meet you personally and go through any questions you may have.”


I pause to describe the above letter as typical of a standard letter sent in such circumstances. There is nothing particularly remarkable or aggressive about it and it had all the indications of being genuine and official, being on Sherry Fitzgerald letter-headed paper and explaining the circumstances in which it was being written. It is also notable that it was envisaged that the only change envisaged at that point for the tenant-occupier was that the rent would be directed to the Receiver/plaintiff rather than the landlord/defendant. It is surprising, therefore, to note the tone of the response of the occupier/tenant (the notice party/appellant in these proceedings), which can be seen in the reply set out in the next paragraph.


By letter dated 5 th May, 2016, the notice party, Patrice McGuinness, signing herself as tenant, wrote as follows:

“Until we are in the receipt of a court order either requiring us to vacate the property and/or to pay rent to a third party entity unconnected with our tenancy, then we will not be discussing our tenancy with you.

We will not change the nature of the tenancy agreement with Mr. Kelly on foot of a letter addressed to “The Residents”.

We trust that you will note in your records accordingly, please note also that we will hold you personally responsible for any other further disruption and/or loss suffered as a result of any inappropriate and unlawful threats”.

I would characterise this as a letter which refused to engage in any manner whatsoever with the Receiver (unless directed to do so by a court order). The reference to holding the Receiver responsible for “any other further disruption and/or loss suffered as a result of any inappropriate and unlawful threats” is puzzling, to say the least.


By letter dated 11 th May, 2016, the plaintiff responded to the occupier of the property in the following way:

“I can confirm that we were appointed receivers over the above property on the 21 st April 2016. This is a legal appointment recognised by the Law Courts… We are appointed over many properties and unless the borrower/landlord contacts our office, we are obliged to go directly to the property. At that stage we would be unaware as to whether the property is derelict … vacant… or occupied by tenants. We send a standard letter to the ‘Residents’ of the property to confirm that the property is vacant or not or if in fact there are tenants in place. If rented, we would not be aware of your details until the borrower or tenant contacts us to confirm same”.

The letter went on to say that he was responsible for managing the property and enclosed a copy of the legal Deed of Appointment and the Residential Tenant Guide to Receivership which might help to answer some of the notice party's queries. Again, there is nothing remarkable or aggressive about that letter.


By letter dated 19 th May, 2016, a Mrs. Tara McGuinness indicated that Patrice McGuinness was currently away and would be returning on 25 th May, 2016, and would contact the plaintiff on her return. By letter dated 19 th May, 2016, Patrice McGuiness wrote:

“So that I can consider your correspondence further, please provide me with a copy of the mortgage dated 6 th August 2004 which is referred to in your deed of...

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