McKenna v Pepper Finance Corporation (Ireland) DAC and Another
| Jurisdiction | Ireland |
| Judge | Mr. Justice Cregan |
| Judgment Date | 09 October 2023 |
| Neutral Citation | [2023] IEHC 564 |
| Court | High Court |
| Docket Number | [2021/6360P] |
[2023] IEHC 564
[2021/6360P]
THE HIGH COURT
JUDGMENT of Mr. Justice Cregan delivered on the 9th day of October, 2023
. This is an application for an injunction by the plaintiff restraining the first and/or second named defendants from “selling and/or completing any sale entered into” in respect of a particular property consisting of farmlands in County Monaghan (“the property”). The key feature of this application is that, in fact, the receiver, (the second named defendant), has already entered into a contract of sale to sell the said property to a third party and therefore the substance of this application is to restrain the receiver completing this sale pending the determination of these proceedings.
. On or about 16 th November, 2004, the plaintiff borrowed the sum of €220,000 from Irish Nationwide Building Society. Some months later, on 8 th March, 2005, this loan was secured on the property when the plaintiff mortgaged the said property to Irish Nationwide Building Society. The loan and mortgage were subsequently transferred to Irish Bank Resolution Corporation Ltd (“IBRC”) on or about 1 st July, 2011.
. The loan and mortgage were subsequently transferred to Shoreline Residential Ltd (“Shoreline”) by IBRC on or about 6 th March, 2014.
. On or about 8 th July, 2015 the plaintiff defaulted on his loan and no payment of principal or interest on the said loan has been made since that time.
. On or about 17 th September, 2018, Shoreline appointed the second named defendant as Receiver over the said lands.
. On 18 th April, 2019, Shoreline transferred the loan and mortgage to Pepper Finance Corporation (Ireland) DAC, (“Pepper”) the first named defendant in these proceedings.
. On 8 th August, 2019, some four months later, the appointment of the second named defendant as Receiver, was novated from Shoreline to Pepper in an agreement entered into between Shoreline, Pepper and the receiver.
. The current debt outstanding on the loan is approximately €276,550 and interest continues to accrue at €33 per day.
. Attempts were made by the Receiver to sell the property in September 2019, November 2020, and December 2020, without success.
. Around this time, the plaintiff appointed a Mr. Larry Shiels to act on his behalf and to negotiate with the defendants on his behalf in respect of his loan.
. On 2 nd February, 2021, Mr. Shiels, on behalf of the plaintiff, made an offer of €80,000 “in full and final settlement of this matter” payable within 90 days. This offer was rejected. This offer was increased to €90,000 on 16 th March, 2021 and was again increased to a sum of €120,000 on 9 th July, 2021. (It is clear from the affidavit evidence that the plaintiff also mortgaged another of his properties – a residential house in another part of Monaghan. There was some confusion therefore about the meaning of this offer. This will be dealt with later in this judgment).
. These offers were rejected by Pepper and, on or about 28 th July, 2021, the Receiver entered into a contract of sale to sell the property to a third party for the sum of €120,000.
. The plaintiff's solicitors were informed of this on 7 th September, 2021 by phone and on the 29 th September, 2021 in writing.
. On 18 th November, 2021, the plaintiff issued his plenary summons in these proceedings.
. However no application for an interlocutory injunction was brought at that time. Instead the plaintiff waited until 26 th January, 2022 – some months later — to issue a notice of motion seeking the current injunctive relief. This notice of motion was grounded on the plaintiff's affidavit which was sworn on the 17 th November, 2021 (i.e. one day before the plaintiff issued his plenary summons).
. The legal principles governing the granting of interlocutory injunctions were recently set out by the Supreme Court in Merck Sharp and Dohme Corporation v. Clonmel Healthcare [2019] IESC 65.
. At paragraph 64 of his judgment, O'Donnell J (as he then was) stated as follows:
“(1) First, the court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted;
(2) The court should then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanimid and Campus Oil approach will yield the correct outcome. However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;
(3) If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice;
(4) The most important element in that balance is, in most cases, the question of adequacy of damages;
(5) In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;
(6) Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial.
(7) While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;
(8) While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined.”
. The defendants submitted that the plaintiff had not even established that there was a fair question to be tried such as to entitle him to interlocutory relief. Indeed most of the submissions at the hearing of this matter focussed on the issue of whether the plaintiff had established a fair question to be tried
. The plaintiff put forward a number of issues which, he submitted, were all fair issues to be tried. I will deal with each of these in turn.
. The plaintiff's first argument was that the first defendant had no proper legal title to the loan and/or mortgage and he took issue with the “chain of title” of the first and second defendants.
. This argument is also inextricably linked with his second argument which is that he never received proper notice of the assignment of the debt as is required under s. 28(6) of the Supreme Court of Judicature (Ireland) Act 1877 (“The 1877 Act”). I will therefore deal with “chain of title” argument first and then the “notice” argument.
. As set out earlier in this judgment, the plaintiff initially took out his loan with Irish Nationwide Building Society. Thereafter, there were a number of assignments/transfers of this loan and mortgage as follows:
(a) the transfer from Irish Nationwide Building Society to IBRC;
(b) the transfer from IBRC to Shoreline;
(c) the transfer from Shoreline to Pepper.
. The plaintiff has indicated in his legal submissions that he does not take any issue with the transfer of the loan and the mortgage from Irish Nationwide Building Society to IBRC.
. However the plaintiff has challenged the transfer of (a) the loan and (b) the mortgage from IBRC to Shoreline.
. However it appears that the plaintiff accepts the Global Deed of Transfer transferring a portfolio of loans from IBRC to Shoreline, and accepts that the plaintiff's loan was part of this portfolio of loans. However he contests the fact that any notice was given to him of this assignment and he argues that there was no valid legal assignment of the debt from IBRC to Shoreline because of this lack of notice (I will deal with the issue of notice below).
. I am satisfied on the evidence before the Court that there was a valid transfer of the plaintiff's debt from IBRC to Shoreline.
. The plaintiff also contests the valid assignment of his loan and his mortgage from Shoreline to Pepper.
. The plaintiff again accepts that there was a global transfer of a portfolio of loans from Shoreline to Pepper (including his loan) as set out in a document entitled “Legal Title Transfer Deed” dated 18 th April, 2019. However he again asserts that he never received notice of the assignment of the loan and/or of the mortgage and submits that there was therefore no proper legal assignment of the debt from Shoreline to Pepper. Again, the plaintiff seems to argue that the...
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