McCleary v McPhillips
| Jurisdiction | Ireland |
| Judge | Mr. Justice Cregan |
| Judgment Date | 31 July 2015 |
| Neutral Citation | [2015] IEHC 591 |
| Court | High Court |
| Date | 31 July 2015 |
BETWEEN
AND
AND
[2015] IEHC 591
THE HIGH COURT
Property and conveyancing – Mortgage – Loan – Trespass – Appointment of receivers.
Facts: Following the first set of proceedings wherein the plaintiff (being the defendant in the first set of proceedings) sought an order of possession over certain properties, the plaintiff now sought an order quashing the appointment of first appointed receiver. The plaintiff contended that the receivers had not been appointed in compliance with the deed of mortgage. The central issues in the present proceedings relate to the validity of the deed of appointment and the validity of the deed of discharge involved in the present case.
Mr. Justice Cregan held that the petition for quashing appointments would be granted. The Court declared that the appointments and the deed of discharge involved in the present case would be invalid. The Court observed that the plaintiff would be entitled for damages for trespass to his property. The Court further observed that the injunction granted in the case would be wrong.
1. In the first set of proceedings (record number 2014/5970 P) the plaintiff, a receiver, seeks an order for possession over certain properties owned by the defendant, and certain permanent injunctions directing the defendant not to interfere with the receiver in the exercise of his functions. In the second set of proceedings (record number 2014/5264 P) the plaintiff, in the second set of proceedings, (being the defendant in the first set of proceedings) is seeking declarations that Stephen Tennant (who was the first appointed receiver) was not validly appointed as receiver, that, if he was validly appointed, he was not validly discharged and also that Mr. Paul McCleary, the second receiver, was not validly appointed.
2. By letter of sanction dated the 20 th May, 2004 (and varied on 6 th April, 2009 and 19 th October, 2009) ACC Bank offered to make available to Mr. McPhillips a loan in the sum of €700,000. This loan facility was drawn down by Mr. McPhillips on 24 th June, 2006.
3. By letter of sanction dated 15 th March, 2005 (and varied on 6 th April, 2009 and 19 th October, 2009) ACC Bank made available to Mr. McPhillips a second sum of €255,000. The second loan facility was drawn down by Mr. McPhillips on 25 th April, 2005.
4. By a third letter of sanction and agreement dated 13 th October, 2006 (and varied on 6 th April, 2009 and 19 th October, 2009) ACC Bank offered to make available to Mr. McPhillips a loan in the sum of €906,000.
5. By letter of sanction and agreement dated 25 th October, 2006 (and varied on 19 th June, 2007, 6 th April, 2009 and 19 th October, 2009) ACC Bank offered to make available to Polygon Developments Ltd ("PDL"), a loan in the sum of €2,895,000.
6. Mr. McPhillips executed a guarantee and indemnity on 6 th October, 2009 in favour of the Bank, to guarantee and indemnify the Bank in respect of all liabilities of PDL to the Bank.
7. Mr. McPhillips defaulted in his repayment obligations to the Bank and by letter of demand dated 17 th January, 2013 the Bank demanded repayment of the total sum of €1.86 million approximately. In addition PDL defaulted in its repayment obligations to the Bank, and the Bank, by letter of demand dated 17 th January, 2013 demanded repayment of the total sum being €1.5 million approximately.
8. On 25 th January, 2013 the Bank also sent a letter of demand to Mr. McPhillips, pursuant to his obligations in accordance with the PDL guarantee and indemnity, demanding repayment of the total sum then outstanding on the PDL loan facility being approximately €1.5 million.
9. Mr. McPhillips failed, refused and/or neglected to pay the said sums demanded by the Bank.
10. Arising from the default of Mr. McPhillips in respect of his indebtedness, ACC Bank appointed Stephen Tennant as receiver over the property, pursuant to a deed of appointment dated 4 th February, 2013. (I shall refer to Mr. Stephen Tennant hereafter as "Mr. Tennant" or "the first receiver".)
11. On 17 th January, 2014 the Bank discharged Mr. Tennant as receiver and appointed Paul McCleary as receiver of the property (I shall refer to Paul McCleary hereinafter as "Mr. McCleary" or "the second receiver" or "the plaintiff receiver").
12. On 25 th June, 2014 the plaintiff receiver directed his agents to attend at the relevant property to secure it.
13. The plaintiff receiver's agents were prevented by Mr. McPhillips, and an associate of Mr. McPhillips, from taking possession of the property.
14. As a result, by letters dated 2 nd July, 2014 the solicitors for the plaintiff receiver wrote to the defendant (and also to his purported attorney, Mr. Ben Gilroy) seeking the defendant's undertaking by close of business on 4 th July, 2014 that he would cease to obstruct the plaintiff receiver in the conduct of his duties as receiver over the property.
15. The plaintiff receiver did not receive any such undertakings.
16. On 9 th July, 2014 the plaintiff receiver instituted these proceedings and also sought interlocutory injunctive relief from the High Court.
17. On 15 th July, 2014 the plaintiff receiver was granted interlocutory injunctive relief which restrained the defendant, his servants or agents from impeding or obstructing the plaintiff receiver, his servants or agents from gaining access to the property, or, from interfering with the plaintiff receiver taking possession of the property.
18. The plaintiff receiver obtained possession of the property on 16 th July, 2014.
19. Subsequently the proceedings were admitted to the Commercial List and directions in respect of pleadings were given.
20. Mr. McPhillips, having defended those proceedings, subsequently issued proceedings in his own name as plaintiff, in which he seeks inter alia orders setting aside the appointment of the plaintiff receiver.
21. By order of the High Court (McGovern J.) dated 20 th October, 2014 the High Court directed that the first set of proceedings ("the possession proceedings") and the second set of proceedings ("the appointment proceedings") be linked and listed for hearing together.
22. On 30 th July, 2014 ACC Bank obtained summary judgment against Paul McPhillips in the sum of €3.64 million and costs. That order was obtained in proceedings entitled ACC Bank Plc v. Paul McPhillips (Record No. 2014/125S / 2014/33 Comm). In addition, ACC Bank plc, on that application applied for, and obtained, an order amending the title of the proceedings to reflect the plaintiff's new name - "ACC Loan Management Ltd". Mr. McPhillips's application for a stay was refused and the order was perfected on 14 th August, 2014. Thus ACC Bank has a valid judgment against Mr. McPhillips in the sum of €3.64 million approximately.
23. Mr. McPhillips is a lay litigant and at the opening of the case it was necessary to clearly identify what precisely were the issues in each set of proceedings.
24. By agreement between the parties, the issues which arise in the first set of proceedings are:
Was Mr. Stephen Tennant validly appointed as first receiver?
Was there a valid deed of discharge in respect of the discharge of Mr. Tennant, the first receiver?
Was the second receiver - Mr. McCleary - validly appointed?
Did the second receiver's servants or agents who appeared at Mr. McPhillips' premises on 25 th June, 2014 (seeking possession of the property) represent themselves as agents of Mr. Stephen Tennant or Mr. McCleary?
Does ACC hold a mortgage over Mr. McPhillips property, or did it sell on the debt?
Did the mortgage contain an express power to take possession of the property, and/or an express power of sale over the property?
25. In the second set of proceedings, the issues which arise are:
Is Mr. McPhillips entitled to damages for trespass to his property? (because the servants or agents of the receiver had no right to be there).
Is Mr. McPhillips entitled to a declaration that the servants or agents of the receivers had produced false documents?
Is Mr. McPhillips entitled to a declaration that the deed of discharge had not been properly signed and that there was a "cover up"?
Is Mr McPhillips entitled to damages because an injunction had been wrongly granted by the High Court at the interlocutory stage?
26. I set out below a chronology of some of the key dates in relation to this matter.
| 4 th February 2013 - | Stephen Tennant appointed as receiver. |
| 17 th January 2014 - | Stephen Tennant discharged as receiver. |
| 17 th January 2014 - | Paul McCleary appointed as second receiver. |
| 4 th February 2014 - | Meeting between Stephen Tennant and Ben Gilroy. |
| 12 th February 2014 - | Second meeting between representatives of Grant Thornton and Ben Gilroy. |
| 25 th June 2014 - | Attempt by receiver through his servants or agents to attend on the property and obtain possession of the property. |
| 2 nd July 2014 - | Letter from second receiver to defendant threatening injunction proceedings. |
| 9 th July 2014 - | Second receiver - the plaintiff in the first set of proceedings - issues proceedings and seeks interlocutory injunction. |
| 15 th July 2014 - | Order for possession and injunction. |
| 30 th July 2014 - | ACC Bank obtain summary judgment for €3.64 million against Mr.... |
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