McGirr v Everyday Finance DAC
| Jurisdiction | Ireland |
| Judge | Ms. Justice Eileen Roberts |
| Judgment Date | 04 November 2022 |
| Neutral Citation | [2022] IEHC 612 |
| Court | High Court |
| Docket Number | 2021 No. 3528P |
[2022] IEHC 612
2021 No. 3528P
THE HIGH COURT
Interlocutory injunction – Sale of property – Balance of convenience – Plaintiffs seeking an interlocutory injunction to restrain the sale of two secured properties by the defendants pending the determination of the proceedings – Whether granting the injunction would minimise the overall risk of injustice in the case
Facts: The plaintiffs, Mr McGirr and Ms Fleming, purchased ten “buy to let” residential properties with finance provided by AIB plc/AIB Mortgage Bank (AIB) with the mortgages secured as first fixed charges on those properties. The relevant facilities and mortgages date between 23 February 1994 and 28 December 2007. The plaintiffs defaulted on their loans and formal demands were issued to them by AIB on dates between March and May 2015. There was a dispute regarding those demands, but the plaintiffs accepted they were in default of repayments and remained so. On 12 March 2020, AIB appointed the second defendant, Mr O’Connor, as receiver over the properties. AIB transferred the plaintiff’s loans and mortgages to the first defendant, Everyday Finance DAC, on 13 March 2020 and immediately novated the deed of appointment of the receiver to the first defendant. The plaintiffs sought to restrain the sale of two of the ten properties purchased by the plaintiffs, namely 99 Stillorgan Road, Co Dublin (the Stillorgan Property) and 95 Ballyhooley Road, Fermoy Co Cork (the Cork Property), or either of them, by the defendants. An interim injunction was granted by the High Court (Allen J) on 8 November 2021 restraining the sale by the second defendant of those properties pending the determination of the motion. The remaining eight buy to let properties had already been sold by the defendants. The plaintiffs complained about the lack of information given to them by AIB or the defendants concerning those properties prior to their sale. The plaintiffs also complained about the manner in which those properties were marketed and sold by online auction, which the plaintiffs said did not achieve proper market value for those properties and thus failed to properly reduce the plaintiffs’ indebtedness to AIB or the first defendant. The defendants said that the plaintiffs remained indebted to the first defendant in the sum of approximately €1.3 million, despite the sale of the eight properties. The plaintiffs said the market value of the remaining two properties, if correctly marketed and sold by private treaty with vacant possession, should between them make somewhere in the region of €900,000. The plaintiffs said the apparent shortfall in the region of €400,000 would be fully accounted for if all eight properties had been marketed and sold so as to achieve their full market value. There was a dispute about the correct level of indebtedness but there was agreement between the parties that monies were due by the plaintiffs under the facilities.
Held by Roberts J that, although finely balanced, granting the injunction would minimise the overall risk of injustice in the case. Roberts J was conscious in that regard that the proceeds of sale of the remaining properties (even on the plaintiffs’ own market value figures) would not eliminate entirely the accrued arrears and interest on their loans and so a shortfall would remain which, if pursued by the defendants, could expose the plaintiffs’ family home to the risk of a judgment mortgage. Roberts J held that this was in circumstances where the proceedings between the parties sought to address any shortfall. Roberts J held that maintaining the status quo would ensure those issues were addressed together and the court would facilitate the parties in relation to making directions to ensure that the proceedings come to trial in the shortest possible time.
Roberts J granted the injunction sought by the plaintiffs restraining the sale by the defendants of the Stillorgan Property and/or the Cork Property pending the determination of the proceedings.
Application granted.
JUDGMENT of Ms. Justice Eileen Roberts delivered on 4 November 2022
. This is an application by borrowers for an interlocutory injunction to restrain the sale of two secured properties by receivers and/or by a mortgagee in possession (to whom the borrowers' loan and mortgages were assigned by the original lender), pending the determination of these proceedings.
. There have been many injunctions sought from the courts in relation to issues arising in receivership cases. Each case will turn on its own specific facts. Trying to link various court decisions or to establish definite rules to predict whether injunctions will be granted is difficult given the unique set of factors and circumstances at play in each case. However, I have had regard to the following general principles in determining this particular case.
. If the injunction sought is, in essence, a mandatory injunction, the party seeking it will have to meet the threshold of a strong case likely to succeed, rather than the lower standard of a fair issue to be tried.
. The reasons advanced by parties to challenge the appointment of receivers and the exercise of their powers must each be considered in the assessment of the relevant threshold and whether it is met in any individual case.
. Assuming the relevant threshold is met, there are finely balanced considerations in assessing where the balance of convenience or the balance of justice lies in any given case. Damages may be an adequate remedy – indeed perhaps for both parties — or they may not be.
. The court should consider on the facts on each case the likelihood of a party seeking injunctive relief being able to make good on its undertaking as to damages if it obtains an injunction but does not succeed at trial.
. Relevant factors in relation to a proposed sale of property may include the level of indebtedness and whether the proposed sale will eliminate or merely reduce that indebtedness or whether a sale may adversely impact on the value of any equity remaining in the property for the borrower.
. The nature of the property at issue is also relevant. The balance of convenience may favour a borrower where the property is one occupied by the borrower, or one from which the borrower is trading or to which the borrower has a strong emotional attachment. On the other hand, the balance may tilt the other direction for a property which is not occupied by the borrower or is a purely commercial property to which the borrower has no particular emotional attachment.
. The behaviour of the parties is also a relevant factor in the exercise of the court's discretion as is any delay in seeking injunctive relief.
. In the present case, the plaintiffs are a married couple who purchased 10 “buy to let” residential properties with finance provided by AIB plc/AIB Mortgage Bank ( AIB) with the mortgages secured as first fixed charges on those properties. The relevant facilities and mortgages date between 23 February 1994 and 28 December 2007. The plaintiffs defaulted on their loans and formal demands were issued to them by AIB on dates between March and May 2015. There is a dispute regarding those demands to which I will return, but the plaintiffs accept they were in default of repayments and remain so.
. On 12 March 2020, AIB appointed the second defendant as receiver over the properties. AIB transferred the plaintiff's loans and mortgages to the first defendant on 13 March 2020 and immediately novated the deed of appointment of the receiver to the first defendant.
. The present application concerns two of the ten properties purchased by the plaintiffs, namely 99 Stillorgan Road, Co Dublin (the Stillorgan Property) and 95 Ballyhooley Road, Fermoy Co Cork (the Cork Property). The plaintiffs seek to restrain the sale of those two properties, or either of them, by the defendants. An interim injunction was granted by Allen J on 8 November 2021 restraining the sale by the second defendant of these properties pending the determination of this motion.
. The remaining eight buy to let properties have already been sold by the defendants. The plaintiffs complain about the lack of information given to them by AIB or the defendants concerning those properties prior to their sale. The plaintiffs also complain about the manner in which those properties were marketed and sold by online auction, which the plaintiffs say did not achieve proper market value for those properties and thus failed to properly reduce the plaintiffs' indebtedness to AIB or the first defendant.
. The defendants say that the plaintiffs remain indebted to the first defendant in the sum of approximately €1.3 million, despite the sale of the eight properties. The plaintiffs say the market value of the remaining two properties, if correctly marketed and sold by private treaty with vacant possession, should between them make somewhere in the region of €900,000. The plaintiffs say the apparent shortfall in the region of €400,000 would be fully accounted for if all the eight properties had been marketed and sold so as to achieve their full market value. There is a dispute about the correct level of indebtedness but there is agreement between the parties that monies are due by the plaintiffs under the facilities.
. The injunctions sought are prohibitory in nature and so the relevant threshold to be met is that there is a fair issue to be tried. As stated by Barniville J in O'Gara v. Ulster Bank Ireland DAC [2019] IEHC 213 at para [42] of his judgment, this is “ generally not a difficult threshold to meet”. There are a number of arguments advanced by the plaintiffs to challenge the entitlement of the defendants to sell the...
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M & J Duddy Developments Ltd v Everyday Finance DAC and Others
...on whether he is regarded as receiver or as agent of the mortgagee. 64 . The defendants also relied on McGirr v. Everyday Finance DAC [2022] IEHC 612, submitting that it was to the effect that Roberts J. had accepted as settled law that a receiver could also act qua agent, subject only to t......