Luke Charleton v John Hassett

• Jurisdiction: Ireland
• Judge: Mr. Justice Allen
• Judgment Date: 30 November 2021
• Neutral Citation: [2021] IEHC 746
• Court: High Court
• Docket Number: [2021 No. 3393P.]

Between

Luke Charleton

Plaintiff

and

John Hassett

Defendant

[2021] IEHC 746

[2021 No. 3393P.]

THE HIGH COURT

Interlocutory orders – Receiver – Mortgagee’s agent – Plaintiff seeking a series of interlocutory orders restraining the defendant from interfering with the plaintiff in carrying out his functions and duties as receiver and mortgagee’s agent – Whether the case was an attempt to use an interlocutory injunction as a means of attempting to obtain summary judgment

Facts: The plaintiff, Mr Charleton, applied to the High Court for what, in form, was a series of interlocutory orders restraining the defendant, Mr Hassett, from interfering with the plaintiff in carrying out his functions and duties as receiver and mortgagee’s agent but was, in substance, a series of what were intended to be final orders directed to permitting the plaintiff to sell a mortgaged property. The plaintiff’s case was that he was appointed as receiver and mortgagee’s agent over the property on 6th July, 2018. The action was commenced by plenary summons issued on 23rd April, 2021. The plaintiff’s motion for interlocutory relief was issued on 11th May, 2021 and was heard on 22nd October, 2021. An appearance was entered by the defendant on 28th May, 2021. By his notice of entry of appearance the defendant called for delivery of a statement of claim, but no statement of claim was delivered.

Held by Allen J that the case was an attempt to use an interlocutory injunction as a means of attempting to obtain summary judgment. Allen J held that it was not, as Clarke CJ put it in Charleton v Scriven [2019] IESC 28, a case in which the court is asked to fashion an appropriate order at the interlocutory stage to attempt to put in place a regime pending trial that runs the least risk of injustice, having regard to the uncertainty as to what the ultimate result of the trial may be.

Allen J held that the motion would be refused.

Application refused.

JUDGMENT of Mr. Justice Allen delivered on the 30th day of November, 2021

Introduction

1 This is an application for what, in form, is a series of interlocutory orders restraining the defendant from interfering with the plaintiff in carrying out his functions and duties as receiver and mortgagee's agent but is, in substance, a series of what are intended to be final orders directed to permitting the plaintiff to sell a mortgaged property. It immediately brings to mind the observation by Clarke C.J. in ( Charleton v. Scriven Unreported, Supreme Court, 8th May, 2019) [2019] IESC 28, that interlocutory injunctions should not be treated as a means of attempting, in practice, to obtain summary judgment. As the Chief Justice said, such orders are designed to do what they say, that is, to hold the situation until there can be a full trial.

2 The plaintiff's case is that he was appointed as receiver and mortgagee's agent over the property on 6th July, 2018. This action was commenced by plenary summons issued on 23rd April, 2021. The plaintiff's motion for interlocutory relief was issued on 11th May, 2021 and was heard on 22nd October, 2021. In the meantime an appearance was entered by the defendant on 28th May, 2021. By his notice of entry of appearance the defendant called for delivery of a statement of claim, but no statement of claim was delivered.

3 On one view, the application could be dealt with by an examination of the plaintiff's proofs, but the case throws up a number of issues of general importance as to the correct approach to be taken by the court to what are loosely referred to as receiver injunctions.

4 The defendant, I should say, represented himself. The defendant did not identify, still less argue, the issues which prompted the court to reserve judgment, but they are issues which emerge quite frequently in the chancery list on such applications and issues which I believe the court was entitled and obliged to raise of its own motion with counsel for the plaintiff, for whose assistance I am grateful.

The evidence

5 Mr. Hassett is the registered owner of the property comprised in Folio 42891F, County Limerick, which is a seven bedroom, two storey house at Pass Road, which is sometimes called Old Cratloe Road, Meelick, Clonconnane, County Limerick. He was registered as such on 26th October, 2004, following a transfer to him by John Hassett Homes Limited, which had been registered as owner on 10th July, 2002.

6 On 12th December, 2005 Mr. Hassett executed a charge over the property in favour of Allied Irish Banks, p.l.c. (“ AIB”) to secure the payment to the bank on demand of all sums then or which might thereafter become due. It is not evident what Mr. Hassett's liabilities to AIB were at the time of, or immediately following, the creation of the charge but by a credit agreement in writing in the form of a facility letter dated 24th October, 2008 addressed to Mr. Hassett and on which he endorsed his acceptance on 5th November, 2008, AIB agreed to make available to Mr. Hassett a facility of €650,542.00 on the terms and conditions therein set out. The facility letter refers to an advance, but all the appearances are that it was a refinancing of an existing loan or loans.

7 Mr. Hassett failed to repay the loan and on 25th July, 2016 AIB recovered summary judgment against him for €801,324.97.

8 By deed made 6th July, 2018 and made between AIB and Luke Charleton and Damien Murran, and described as Instrument of Appointment of Joint Receivers, AIB appointed Messrs. Charleton and Murran to be joint receivers over the mortgaged property to the intent that they might exercise all the powers conferred on the receivers in relation to the mortgaged property whether by the charge or by law or otherwise. By the same instrument AIB appointed Messrs. Charleton and Murran “ as its agent for the purposes of taking possession of the Mortgaged Property on behalf of AIB as mortgagee in possession, securing the Mortgaged Property and effecting the sale of the Mortgaged Property.” On the following day, 7th August, 2018, Messrs. Charleton and Murran endorsed their acceptance of their appointment as joint receivers and as agent, and the defendant was given notice of the appointment by letter of the same day.

9 By a deed described as an Irish Law Deed of Transfer (Excluding Property) dated 14th June, 2019 and made between AIB and a number of other AIB companies and Everyday Finance DAC (“ Everyday”) the defendant's loan and the security held for it were transferred to Everyday and on 27th August, 2019 Everyday was registered on the Folio as the owner of the charge.

10 In his affidavit grounding this application Mr. Charleton described the deed of transfer by reference to its date and exhibited a copy, redacted for reasons of confidentiality. He went on to say that “ Further, Allied Irish Banks plc agreed to novate the receivership and agency agreements over the property to Everyday, and inter alia Everyday agreed to assume the obligations of Allied Irish Banks plc under the receivership and agency agreements and I consented to the substitution of Everyday under the receivership and agency agreements”, and he exhibited a copy of what he described as the receiver novation deed, redacted for reasons of confidentiality.

11 Mr. Charleton did not, in the body of his affidavit, give a date for the receiver novation deed. The document exhibited as a copy – which must be taken to have been given in evidence as a true copy – is dated only “ 2019”. By clause 2.1 it was provided that the parties agreed that with effect from the Effective Date (as defined) Everyday was to be and thereby was substituted in place of AIB as a party to the Receiver Agreements; and that the Continuing Parties, that is to say Messrs. Charleton and Murran, agreed that with effect from the Effective Date they would perform and discharge all liabilities and obligations whatsoever from time to time to be performed or discharged by them by virtue of the Receiver Agreements in all respects as if Everyday were the original party to the Receiver Agreements instead of Allied Irish Banks, p.l.c. It is evident from the copy document exhibited that it was executed by AIB, by Mr. Charleton, and by Mr. Murran, but not by Everyday. This omission, when identified by the court, was described as an “ administrative mishap”: but whether the suggested mishap was that the deed had not been executed by Everyday or that the purported copy deed was not a true copy is not clear. As far as the evidence goes, the receiver novation deed, upon which the plaintiff relies for his authority, was not executed by Everyday.

12 The plaintiff's case is that his appointment by AIB was novated by Everyday. That, in my view – and I do not understand counsel to have argued otherwise – was not established by the evidence. As the hearing continued, the plaintiff's solicitor was endeavouring to locate a copy of the deed which might show that it had been executed by Everyday but did not succeed in doing so. At the conclusion of the hearing – the court having indicated that judgment would be reserved – counsel asked for permission to file a supplemental affidavit: but this would have been wholly unsatisfactory, never mind unfair to the defendant who would not have had any opportunity to comment on any additional evidence.

13 Apart from the fact that the purported deed of novation did not appear to have been executed by Everyday, there was no evidence that Mr. Hassett had ever been given notice of the novation. In an e-mail exchange with Ernst & Young (“EY”) on 1st May, 2020, Mr. Hassett suggested that his account had been “ transferred or gifted” to Everyday and EY and said that he wanted to understand “what us [recte. is] your role in all this.” In reply Mr. Hassett was provided with a copy of the deed of appointment over the property at Clonconnane. “As”, it was said, “ you would have been previously advised, the case was...