Miceal Sammon and Cathy Sammon v Ken Tyrrell and Everyday Finance Dac

• Jurisdiction: Ireland
• Judge: Mr. Justice Allen
• Judgment Date: 15 January 2021
• Neutral Citation: [2021] IEHC 6
• Docket Number: [2019 No. 9227P.]
• Court: High Court
• Date: 15 January 2021

Between

Miceal Sammon and Cathy Sammon

Plaintiffs

and

Ken Tyrrell and Everyday Finance DAC

Defendants

[2021] IEHC 6

[2019 No. 9227P.]

THE HIGH COURT

Interlocutory injunction – Possession of lands – Sale of lands – Plaintiffs seeking an interlocutory injunction restraining the defendants from marketing, taking possession of, or selling lands – Whether the plaintiffs’ liabilities on foot of the guarantees which they signed in 2007 and 2009 were secured by the charges they signed in 2000 and 2002

Facts: The plaintiffs, Mr and Mrs Sammon, the registered owners of lands, applied to the High Court for an interlocutory injunction restraining the defendants, Everyday Finance DAC (Everyday), the registered owner of a charge on the lands, and Mr Tyrrell, a receiver appointed by the charge holder, from marketing, taking possession of, or selling the lands. The plaintiffs’ case was that their liabilities to the charge holder were not secured by the charge and they wanted their case heard and decided before the lands were sold. The defendants’ case was that the plaintiffs’ liabilities were secured by the charge and they wanted to sell the lands on the basis that the court would decide later how the proceeds of sale should be dealt with.

Held by Allen J that he had no difficulty in identifying the lesser risk of injustice. He found that if the plaintiffs won, they would get to keep their garden and hobby farm and whether later and by some other means the defendants could establish that they were entitled to a court order for sale was another day’s work. He found that if the defendants won, they would get to sell the lands. He held that the balance was between the inevitable postponement of the exercise of the defendants’, specifically Everyday’s, right to sell and the risk of extinguishment of the plaintiffs’ rights as the owners of the land.

Allen J held that on the plaintiffs’ undertaking as to damages, there would be an interlocutory injunction in the terms of paras. (a), (b) and (c) of the notice of motion restraining the defendants, whether by themselves, their servants or agents or otherwise, from advertising for sale, taking possession of, or entering any agreement to sell or selling the lands in Folios 43308F, 43309F and 54410F, County Kildare, and Folio 54148F, County Meath.

Application granted.

JUDGMENT of Mr. Justice Allen delivered on the 15th day of January, 2021

Overview

1 This is an application by the registered owners of lands for an interlocutory injunction restraining the registered owner of a charge on the lands, and a receiver appointed by the charge holder, from marketing, taking possession of, or selling the lands. The plaintiffs' case is that their liabilities to the charge holder are not secured by the charge and they want their case heard and decided before the lands are sold. The defendants' case is that the plaintiffs' liabilities are secured by the charge and they want to sell the lands now on the basis that the court will decide later how the proceeds of sale should be dealt with.

2 The plaintiffs, Mr. and Mrs. Sammon, live in a house called Boragh Farm, Killeighter, Kilcock, County Kildare, which they built about twenty years ago and where they have lived ever since. The cost of building the house was partly funded by money borrowed in 2000 from Allied Irish Banks plc, the repayment of which was secured by a charge over the substantial site of about ten acres or so, which Mr. and Mrs. Sammon already owned. That loan has since been repaid.

3 In 2002, a couple of years after they built their house, Mr. and Mrs. Sammon bought a holding of about seventeen acres immediately to the east of their home, which has since been used as a hobby farm. The purchase of those lands was funded by a loan from AIB, the repayment of which was secured by a charge over those lands and that loan has since been repaid.

4 Mr. and Mrs. Sammon were, or at least Mr. Sammon was, the owner of a substantial construction business called Sammon Group, which also banked with AIB. When, in 2007, and again in 2009, AIB extended or renewed a number of facilities to a number of the companies in the Sammon Group, Mr. and Mrs. Sammon signed a number of personal guarantees. In 2014 the Sammon companies got into financial difficulties. In early 2015 AIB called up the loans and Mr. and Mrs. Sammon's guarantees, and on 20th July, 2015 recovered judgment against them for €2,654,523.43 and costs.

5 In 2018 the liabilities of the Sammon companies and the security held in connection with them were transferred by AIB to Everyday Finance DAC.

6 The core dispute between the parties is whether Mr. and Mrs. Sammon's liabilities on foot of the guarantees which they signed in 2007 and 2009 are secured by the charges they signed in 2000 and 2002. On their face, the charges are for “ all sums due” but Mr. and Mrs. Sammon contend that the charges, properly construed within the factual matrix in which they were given, extended only to the borrowings made at the time they were given, which, it is common case, have been repaid. The defendants' position on the motion is that the case which Mr. and Mrs. Sammon make is not even arguable and, in any event, that the balance of convenience is overwhelmingly against postponing what they say is the inevitable and unavoidable sale of the lands.

The proceedings to date

7 The action was commenced by plenary summons issued on 29th November, 2019 and the statement of claim was delivered on 2nd March, 2020. The defendants agreed to stay their hand for the duration of the first COVID-19 lockdown but declined to do so pending the trial of the action and the motion for interlocutory relief now before the court was issued on 3rd July, 2020. In the meantime a notice for particulars was served and replied to.

8 The defendants, of course, were perfectly entitled to take the course which they did but the almost inevitable consequence has been that the action has not progressed for six months. The plaintiff's motion which, following a very efficient exchange of affidavits in the first half of July, and an exchange of careful and thoughtful legal submissions in the first half of November, came on for hearing on 17th November, 2020. The motion was prepared with great care and diligence and was argued, on both sides, with skill, learning and erudition. I cannot forbear to observe that if all that time and effort had been directed to the progress of the action, rather than the motion, the parties might very well by now have been in a position to apply for a trial date.

9 The plaintiffs' case in the action is that the charges over the lands, properly construed, do not secure their liabilities to the second defendant. For the purposes of this application, the plaintiffs say that they have a good arguable case that the defendants are not entitled to sell their lands. The defendants argue that the terms of the charges are clear and unambiguous. Moreover, and in any event, it is said, the plaintiffs are heavily indebted to the second defendant and there is no prospect of the debt being paid otherwise than by the sale of the lands, so that sooner or later they will be put out and the land sold.

10 The net issue on this application is whether the defendants should be allowed to sell the land now on the basis that the court will decide later whether it should or should not have been sold. I do not believe that it is inconsistent with my duty to come to the case with an open mind and to carefully listen to and consider the arguments on both sides to say that it is not immediately a particularly attractive proposition.

The evidence

11 The extensive site on which the Sammon family home was built in 2000 was a rough square, made up of two parcels of land, being the lands in Folios 43308F and 43309F, County Kildare, which Mr. and Mrs. Sammon had bought in about 1998 without finance. In the extensive grounds of the house there were outbuildings, a yard, sheds, lawns, a vegetable garden and so on, which were subsidiary and ancillary to the house. If there has been any further development in the meantime, I do not understand that the basic general layout on the ground has changed but in 2013 the house and some of the nearest outbuildings were carved out (mostly out of Folio 43308F) and a new Folio 61758F opened which Mr. and Mrs. Sammon transferred to their children. According to the affidavit of Mr. Sammon grounding this application, he and Mrs. Sammon have since paid rent to their children but the folio shows that they reserved a right of residence in the house. Nothing, I think, turns on the precise basis on which Mr. and Mrs. Sammon occupy the house but the manner in which the house was carved out means that the gardens and outbuildings theretofore and since used for the amenity of the house are in different ownership. For example, one of the doors in the house opens onto a lawn which is in different ownership, the house and the sewage treatment plant are in different ownership, and so on.

12 On or about 5th March, 2000 Mr. and Mrs. Sammon borrowed IR£147,000 from Allied Irish Banks plc (“ AIB”). The purpose of the advance was to part fund the cost of construction of Boragh Farm and the loan was repayable over 15 years by instalments of combined principal and interest. That loan was secured by a charge which it appears had already been executed on 27th January, 2000 and was registered on 15th March, 2000 on the then newly opened Folios 43308F and 43309F, County Kildare.

13 In 2002 Mr. and Mrs. Sammon bought a significant holding, of about seventeen acres or so, immediately to the east of Folio 43308F, County Kildare. On the ground, this is a rough rectangle which is perhaps about half as big again as the square and straddles the Kildare / Meath county boundary. On paper, the rectangle is made up of the lands in Folio 54410F, County Kildare and Folio 54...