Nihill v Everyday Finance DAC

• Jurisdiction: Ireland
• Judge: Mr. Justice Dignam
• Judgment Date: 29 July 2022
• Neutral Citation: [2022] IEHC 484
• Court: High Court
• Docket Number: [RECORD NO 2021 5794. P]

Between

Michael Nihill

Plaintiff

and

Everyday Finance DAC, Ken Tyrell and Wilsons Auctions

Defendants

[2022] IEHC 484

[RECORD NO 2021 5794. P]

THE HIGH COURT

Interlocutory injunction – Sale of land – Arguable case – Plaintiff seeking an interlocutory injunction – Whether the plaintiff had established an arguable case

Facts: The plaintiff, Mr Nihill, applied to the High Court seeking an interlocutory injunction prohibiting the defendants, Everyday Finance DAC, Mr Tyrell and Wilsons Auctions, by themselves, their servants and/or agents from offering by way of an internet auction on the platform of the website of the third defendant on 13th of October 2021 of all that and those the lands contained in the respective folios of Folios 7211F County Tipperary and 262F County Tipperary. The plaintiff raised a number of points on which he claimed he had an arguable case: (i) the second defendant was appointed as receiver and as agent of the first defendant and this gave rise to a conflict of interest; (ii) there were ongoing negotiations between the parties and the properties should therefore not have been put up for sale; (iii) there were two issues in relation to the identity of the properties being sold; (iv) the second defendant did not have a power of sale and was purporting to sell the properties; (v) the instruments of appointment were invalid; and (vi) the marketing of the properties or manner of sale would not secure the best price.

Held by Dignam J that the plaintiff had established an arguable case on the question of the allegation that the second defendant was acting in excess of his powers in purporting to sell the lands. Dignam J considered the balance of convenience and the balance of justice when considering how matters should be arranged pending the trial of the action. Dignam J held that, as is clear from O’Donnell J’s judgment in Merck Sharpe & Dohme v Clonmel Healthcare [2019] IESC 65, once the Court is satisfied that the threshold test has been met the fundamental objective of the Court in determining what should happen pending the full trial (when the legal rights of the parties will be determined) is to minimise injustice.

Dignam J held that the appropriate way to arrange matters pending the trial of the action was to restrain the defendants from selling the lands on the basis of the draft contract and the marketing process held on foot of that.

Defendants restrained from selling lands.

Judgment of Mr. Justice Dignam delivered on the 29th day of July, 2022.

1 The Plaintiff seeks an interlocutory injunction in the following terms:

“An Order in the nature of an injunction prohibiting the Defendants by themselves, their servants and/or agents from offering by way of an internet auction on the platform of the website of Wilson Auctioneers, being the third named Defendant on 13th of October 2021 of all that and those the lands contained in the respective folios of Folios 7211F County Tipperary and 262F County Tipperary.”

2 The immediate background to the institution of these proceedings and to this application for an injunction was the proposed sale of a number of parcels of land. This in turn arises from secured borrowings which the Plaintiff had with the First-named Defendant's predecessor, Allied Irish Banks, and the appointment of the Second-named Defendant as receiver over the lands by the First-named Defendant. There is in fact very little dispute between the parties as to the factual background but, given the points raised by the Plaintiff in support of his application for an injunction, it is necessary to set out the background in some detail.

3 The affidavits of the Applicant are deficient in the manner in which they set out the facts. I have therefore had to rely on the affidavit filed on behalf of the Defendants (sworn by Ms. Adrienne Fitzgibbon) to gain a proper understanding of the factual background and to set out the facts in this judgment, highlighting, where necessary, any disputes between the contents of that affidavit and those sworn by the Plaintiff.

4 By loan facility letter dated the 28th August 2012 Allied Irish Banks agreed to advance to the Plaintiff three separate loan facilities in the amounts of €15,000, €106, 276, and €340,652 respectively. These facilities were stated to be repayable on demand and the security would be an all-sums mortgage over various properties, including certain properties at Cullen and Moher East, County Tipperary. The full amounts were drawn down by the Plaintiff. The facility letter was not exhibited by the Plaintiff. He explains in his third affidavit that it was not exhibited because he did not have a copy when swearing his grounding affidavit.

5 Two mortgages were granted by the Plaintiff:

(i) A deed of mortgage dated the 14th May 2001 in respect of the property comprised in Folio 262F of County Tipperary (this was registered in the Land Registry Folio on the 23rd December 2003); and

(ii) A deed of mortgage dated the 24th June 2008 in respect of the properties comprised in inter alia Folios 7211 and 7213 of County Tipperary (this was registered in the Land Registry Folios on the 30th March 2009).

6 Neither mortgage was exhibited to the Plaintiff's affidavits and in fact there was not even a reference to the second mortgage. The Plaintiff explains this on the basis that he did not have copies of the mortgages in his possession when swearing his grounding affidavit.

7 I refer to the terms and conditions of these mortgages in detail in the discussion below. They include contractual powers of enforcement in addition to the statutory powers, including a contractual power to appoint a receiver to the properties the subject of the mortgages.

8 By global deed of transfer dated the 14th June 2019 AIB assigned to the First-named Defendant all rights, title, interests and benefits which it held on foot of those loan facilities and mortgages and the Plaintiff was notified of the assignments by letters of the 20th June 2019 and the 20th August 2019. The Plaintiff makes no reference to having received these notifications but does not dispute having received them in reply to Ms Fitzgibbon's affidavit. The assignment of the first mortgage (14th May 2001) was registered on the Folios on the 30th August 2019 and the assignment of the second mortgage was registered on the 13th September 2019.

9 In her affidavit on behalf of the Defendants, Ms. Fitzgibbon says that the Plaintiff failed to make the payments required by the terms and conditions of each of the facilities. The Plaintiff does not dispute this and does not suggest that the monies are not owed. By letter of the 21st January 2020, Link ASI Limited (a service provider for the First-named Defendant) informed the Plaintiff that there was an amount outstanding of €501,427.62 and that he had been “classified as not co-operating under the Regulations on Lending to Small and Medium-Sized Enterprises (SME Regulations)” and that the consequences of this include that a Receiver may be appointed over the secured facilities, that legal action may be commenced for the repossession of the secured properties or recovery of monies owed, and that fees, charges and surcharge interest may be applied to his loan account. A letter of formal demand was made by Link ASI (subsequently renamed BCM Global ASI Limited but referred to in this judgment as “Link”) on the 16th October 2020 for the amount of €517,462.73 plus continuing interest. This letter also warned the Plaintiff that in the event of non-payment all of the First-named Defendant's rights, including the right to appoint a receiver, would be exercised.

10 No payments were made by the Plaintiff and the Second-named Defendant was appointed to act as receiver by two instruments of appointment of the 11th February 2021. These instruments are at the centre of the dispute between the parties, and it is therefore necessary to quote them in full. Before doing so, in light of the challenges raised by the Plaintiff, it must be noted that the instruments are signed by a David Geraghty and Mona Samadi as “ authorised officers” of Link “ as Attorney for and on behalf of Everyday Finance Designated Activity Company Under a Power of Attorney dated 14 June 2019”. I return to this below as the validity of this power of attorney and therefore the execution of the instruments of appointment by Mr. Geraghty and Ms. Samadi forms a central part of the Plaintiff's case.

11 One instrument stated that the appointment was made “supplemental to and made pursuant to the powers contained in a Mortgage/charge dated 24 June 2008 between (1) Michael Nihill (the Mortgagor) and (2) AIB Mortgage Bank and Allied Irish Banks plc (collectively AIB)” and went on to state:

“ WHEREAS

A. Under and by virtue of the Mortgage/Charge, the Mortgagor did thereby grant in favour of AIB which definition includes any successor in title thereto), fixed charges and/or a mortgage over the mortgage property as charged by the Mortgage/Charge and as stated in the Schedule hereto (the Mortgaged Property) as security for the repayment of the “Total Debt” (as defined in the Mortgage/Charge) ( the Secured Liabilities).

B. Prior to the execution of this Appointment AIB transferred, conveyed, assigned and/or otherwise assured all of its right, title and interest in the Secured Liabilities, the Mortgage/Charge and the Mortgaged Property to EFDAC.

C. The Secured Liabilities have now become payable by the Mortgagor to EFDAC.

D. Defined terms in the Mortgage/Charge shall have the same meaning when used in this Appointment.

NOW THIS APPOINTMENT WITNESSETH as follows:

• 1. EFDAC HEREBY APPOINTS the Receiver to be the receiver over the Mortgaged Property TO THE INTENT that the Receiver may exercise all the powers conferred on the Receiver in relation to the Mortgaged Property whether under the Mortgage/Charge or by law or otherwise.

• 2. The...