McCarthy v Gallagher

• Jurisdiction: Ireland
• Judge: Mr. Justice Tony O'Connor
• Judgment Date: 15 December 2017
• Neutral Citation: [2017] IEHC 848
• Docket Number: [2013 No. 11670 P]
• Court: High Court
• Date: 15 December 2017

[2017] IEHC 848

THE HIGH COURT

O'Connor Tony J.

[2013 No. 11670 P]

BETWEEN

SHANE MCCARTHY

PLAINTIFF

AND

DOMINIC GALLAGHER

DEFENDANT

Notice of discontinuance – Determination of facts and law – Appointment of receiver – Plaintiff seeking a determination of facts and law – Whether the receiver had been validly appointed

Facts: The plaintiff, Mr McCarthy (the Receiver), served a notice of discontinuance in March 2015, following his undertaking to abide by any order for damages which the High Court may direct the Receiver to pay arising from an interlocutory order directing the defendant, Mr Gallagher, to deliver up possession of an industrial unit (the Unit) in November 2013. A notice of motion issued in November 2016, seeking orders to strike out the defendant’s counterclaim (delivered in November 2014) pursuant to O. 19(27) and O. 19(28) of the Rules of the Superior Courts (RSC) and/or the inherent jurisdiction of the Court on the grounds that the counterclaim failed to disclose a reasonable or any cause of action, was frivolous and/or vexatious, was unnecessary and/or scandalous and/or tend to embarrass, constitutes an abuse of process, and was bound to fail. Following receipt of that notice of motion, the defendant appointed a solicitor in December 2016, and delivered a replying affidavit which contended that: (i) the Receiver had been invalidly appointed; and (ii) if validly appointed, the Receiver did not have the power to sell the Unit. The Receiver’s motion came before O’Connor J. He observed that the defence and counterclaim had not identified the specific grounds of his challenge to the appointment and powers of the Receiver. He gave directions before adjourning the Receiver’s motion to the effect that the defendant as counterclaimant deliver points of claim which, inter alia, contended: (i) the counterclaim should not be struck out; (ii) the Court should assess damages for negligence and trespass by the Receiver in selling the Unit; and (iii) the Receiver had no power of sale. Points of defence were delivered on behalf of the Receiver.

Held by O’Connor J that he should hear counsel about the following proposed orders and directions for the sake of clarity and effectiveness: (i) the Receiver shall pay the expenses (when taxed or agreed) of the defendant arising from these proceedings (other than the costs for the interlocutory application before White J on 19th November, 2013, when the costs of that application were determined on that day) from 24th October, 2013 (the date of the issue of the plenary summons), to 26th March, 2015 (the date of discontinuance by the Receiver); (ii) the Receiver’s motion pursuant to notice dated 10th November, 2015, seeking to strike out or dismiss the counterclaim is refused; (iii) the Receiver shall deliver, by 26th January, 2018, to the defendant’s solicitors, a notice to admit facts and documents relevant to the claim that his appointment as receiver was valid (including the names of those who signed, sealed or executed any document to be relied upon, the dates and location of such execution, together with such other facts as the Receiver will rely upon at the plenary hearing); (iv) the defendant shall reply to that notice to admit facts within 21 days of receipt and specifically identify such fact or facts which require proof by the defendant at the trial of these proceedings; (v) the parties, if oral evidence is required by them, shall exchange lists of witnesses as to fact intended to be called at the plenary hearing on or before 16th February, 2018; (vi) the defendant shall, by 23rd February, 2018, file and serve outline legal submissions concerning the principles of law whether relating to execution of deeds of appointment, ratification, or otherwise to be advanced; (vii) the plaintiff shall file and serve a reply to those submissions within 21 days of receipt and include a composite list of authorities so that the defendant in prosecuting the counterclaim can produce one composite indexed, leafed and paginated book of authorities for the trial; (viii) the proceedings shall be listed for mention before the Court on 20th March, 2018, with a view to listing the plenary hearing of the counterclaim (save as to the assessment of any damages).

O’Connor J invited counsel to address the Court on the issue of the costs relating to the Receiver’s unsuccessful motion to dismiss or strike out the counterclaim.

Judgment approved.

JUDGMENT of Mr. Justice Tony O'Connor delivered on the 15th day of December, 2017

Introduction

1 This judgment concerns the effect of a notice of discontinuance served by the plaintiff receiver (‘ the Receiver’) in March 2015, following his undertaking to abide by any order for damages which the Court may direct the Receiver to pay arising from an interlocutory order directing the defendant to deliver up possession of an industrial unit (‘ the Unit’) in November 2013.

How this comes before the Court?

2 The original questions for the Court were identified in a notice of motion issued in November 2016, seeking orders to strike out the defendant's counterclaim (delivered in November 2014) pursuant to O. 19(27) and O. 19(28) of the Rules of the Superior Courts (‘ RSC’) ‘a nd/or the inherent jurisdiction of’ the Court on the grounds that the counterclaim failed ‘ to disclose a reasonable or any cause of action’, was ‘ frivolous and/or vexatious’, was ‘ unnecessary and/or scandalous and/or tend to embarrass’, ‘ constitutes an abuse of process,’ and was ‘ bound to fail’.

3 Following receipt of that notice of motion, the defendant appointed a solicitor in December 2016, and delivered a replying affidavit which contended that:-

(i) the Receiver had been ‘ invalidly appointed’; and

(ii) if validly appointed, the Receiver did not have the power to sell the Unit.

4 The Receiver's motion came before me earlier this year. Then I observed that the defence and counterclaim, which the defendant himself drafted and delivered in 2014, had not identified the specific grounds of his challenge to the appointment and powers of the Receiver. I gave directions before adjourning the Receiver's motion to the effect that the defendant as counterclaimant deliver ‘ points of claim’ which, inter alia, contended but may be summarised as follows:-

(i) the counterclaim should not be struck out;

(ii) the Court should assess damages for negligence and trespass by the Receiver in selling the Unit; and

(iii) the Receiver had no power of sale.

5 ‘ Points of defence’ were delivered on behalf of the Receiver, to the effect, that: -

(i) the Receiver had no obligation in respect of the defendant's costs in the claim which had been discontinued because the defendant had been a lay litigant up to the date of discontinuance;

(ii) the Receiver was obliged to seek injunctive reliefs due to the unlawful action of the defendant;

(iii) the defendant's counterclaim could proceed even where the Receiver's claim was discontinued;

(iv) the deed of appointment for the Receiver which was executed under seal constituted execution by ACC Bank plc (‘ the Bank’) ‘ in writing under its hand’ which was the term used in the relevant deed of charge;

(v) any infirmity relating to the execution of the deed of appointment had been remedied by a ratifying type resolution of the Bank in August 2015 which had appointed the Receiver; and

(vi) the Receiver relied on the security documentation and the statutory power of sale ‘ pursuant to the Conveyancing and Law of Property Act 1881 and 1911’.

Preliminary Trial?

6 In short, the Receiver is now seeking a determination of facts and...