Paul Mccann v John Morrissey and Others

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 21 June 2013
• Neutral Citation: [2013] IEHC 288
• Court: High Court
• Docket Number: [No. 7358P/2012]
• Date: 21 June 2013

McCann v Morrissey & Ors

BETWEEN

PAUL McCANN

PLAINTIFF

AND

JOHN MORRISSEY, NORTHBROOK PROPERTY MANAGEMENT LIMITED, IGBIS LIMITED, CYAN TECHNOLOGIES LIMITED, CAPITAL D PROPERTY PLC AND DARREN LANCASTER

DEFENDANTS

[2013] IEHC 288

[No. 7358P/2012]

THE HIGH COURT

INJUNCTIONS

Interlocutory injunction

Strong prima facie case - Adequacy of damages - Balance of convenience - Laches - No evidence of prejudice - Power of mortgagor to lease - Entitlement of receiver to possession - Interlocutory injunction sought to restrain exclusion from possession - Whether strong prima facie case - Whether damages adequate remedy - Whether appropriate compensation could be actually realised - Campus Oil v Minister for Industry and Energy [1983] IR 88 and Westman Holdings Ltd v McCormack [1992] 1 IR 151 applied - Keating v Jervis Shopping Centre Ltd [1997] 1 IR 512; Maha Lingham v Health Service Executive [2005] IESC 89, (Unrep, Supreme Court, 4/10/2005) and Nolan Transport (Oaklands) Ltd v James Halligan (Unrep, Keane J, 22/3/1994) considered - ICC Bank Plc v Verling [1995] 1 ILRM 123 followed - Land and Conveyancing Law Reform Act 2009 (No 27), s 112 - Injunctions granted (2012/7358P - Laffoy J - 21/6/2013) [2013] IEHC 288

McCann v Morrissey

Facts: The first defendant had mortgaged a number of premises and facilities had been advanced to him. The Bank had appointed a Receiver and he issued a notice of motion seeking reliefs, including inter alia to restrain the defendants from preventing, impeding or obstructing the Receiver, interfering with his function. The Court considered the interlocutory reliefs sought, including whether the Receiver had established that there was a serious issue to be tried, whether damages were an adequate remedy and whether the balance of convenience lay in granting or refusing the interlocutory injunction.

Held by Laffoy J. that there was no doubt that the Receiver had met the first criterion which the plaintiff had to establish to obtain interlocutory injunctive relief. The balance of convenience lay in favour of the grant of the relief sought.

CAMPUS OIL v MIN FOR INDUSTRY & ENERGY (NO.2) 1983 IR 88

KEATING v JERVIS SHOPPING CENTRE LTD 1997 1 IR 512

MAHA LINGHAM v HEALTH SERVICE EXECUTIVE (HSE) 2006 17 ELR 137

ICC BANK PLC v VERLING & ORS 1995 1 ILRM 123

LAND & CONVEYANCING LAW REFORM ACT 2009 S112(5)

LAND & CONVEYANCING LAW REFORM ACT 2009 S112

CONVEYANCING ACT 1881 S18

CONVEYANCING ACT 1881 S18(13)

NOLAN TRANSPORT (OAKLANDS) LTD v JAMES HALLIGAN & ORS UNREP KEANE 22.3.1994 1994/5/1550

DELANY EQUITY & THE LAW OF TRUSTS IN IRELAND 5ED P524

WESTMAN HOLDINGS LTD v MCCORMACK 1992 1 IR 151

Ms. Justice Laffoy

1 These proceedings relate to the premises 22, Northbrook Road, Ranelagh in the City of Dublin (the Premises). The first defendant (Mr. Morrissey) is the owner of the Premises. By a deed of mortgage and charge dated 11^th June, 2008 (the Mortgage) Mr. Morrissey mortgaged a number of properties, including the Premises, to Ulster Bank Ireland Limited (the Bank). Subsequent to the creation of the Mortgage, the Bank, by facility letter dated 26^th January, 2009 (the 2009 Facility Letter), advanced further facilities to Mr. Morrissey and his wife subject, inter alia, to the condition that the facilities would be secured on, infer alia, the Premises by virtue of the Mortgage.

2 By deed of appointment dated 2^nd November, 2010, the Bank appointed the plaintiff (the Receiver) as receiver of and over certain mortgaged properties, including the Premises, and to exercise all powers of a receiver and manager given in the Mortgage and by law. That appointment was preceded by a demand made by the Bank on Mr. Morrissey and his wife, which was dated 26^th October, 2010, demanding payment of all monies and liabilities owed or incurred to the Bank not later than 29^th October, 2010. It was stated in the letter of demand that the amount then outstanding, being principal and accrued interest, was €14,170,044.04.

3 After the appointment of the Receiver there was interaction between the Receiver, on the one hand, and Mr. Morrissey and accountants acting on his behalf, Baker Tilly Ryan Glennon, on the other hand. Eventually, by letters dated 3^rd July, 2012, the Receiver's solicitors, on behalf of the Receiver, requested Mr. Morrissey, the second defendant and the third defendant to vacate the Premises by close of business on 12^th July, 2012 and intimated that the Receiver would attend the Premises on 13^th July, 2012 for the purposes of changing locks and securing possession of the Premises without further notice. The addressees were requested to ensure that the Premises had been vacated and emptied of all goods or other property belonging to them by that date.

4 The Receiver not having recovered possession of the Premises on foot of those demands, these proceedings were initiated by a plenary summons which issued on 26^th July, 2012. Simultaneously, the Receiver issued a notice of motion seeking certain reliefs by way of prohibitory and mandatory interlocutory injunction against the defendants and their servants and agents. The prohibitory orders sought were orders restraining the defendants from -

5 (a) preventing, impeding or obstructing the Receiver from gaining access to and taking possession of the Premises and collecting the rents and the licence fees associated with the Premises;

6 (b) interfering with the functions and office of the Receiver as Receiver and Manager of the Premises;

7 (c) collecting or attempting to collect the rents and licence fees and from contacting tenants and licensees in occupation or possession of the Premises; and

8 (d) trespassing upon or entering upon or otherwise attending the Premises.

9 The reliefs sought by way of mandatory injunctions were for orders directing the defendants -

10 (i) for an account of all rents and licence fees received by them since 2^nd November, 2010 in respect of the Premises and to pay the same to the Receiver forthwith;

11 (ii) to deliver up forthwith to the Receiver all books and records held by them relating to the Premises, including leases and licence agreements; and

12 (iii) to deliver up to the Receiver possession of the Premises including the keys, alarm codes, locks and all other security and access devices and equipment in respect thereof.

13 5. An order was made by consent of the parties by the Court (Murphy J.) on 12^th October, 2012 directing the defendants to deliver to the plaintiff/Receiver the keys, alarm codes, locks and other security and access devices in respect of the Premises, subject to the proviso, which was without prejudice to the Receiver's position in the proceedings, that the plaintiff/Receiver would attend the Premises for inspection purposes only, that he would give forty eight hours written notice by e-mail of an inspection and that the inspection would take place in the presence of the representatives of the defendants.

14 6. This judgment concerns the application for the interlocutory injunctive relief, the hearing of which concluded on 6^th June, 2013.

15 7. Mr. Morrissey had separate representation on the hearing of the interlocutory application, As regards the remainder of the defendants, some had representation and some had not. It is necessary to consider the position of each of the other defendants.

16 8. The second defendant (Northbrook) and the fourth defendant (Cyan) were represented by the same legal team. The third defendant (Igbis) and the fifth defendant (Capital) were not represented and an appearance was not entered on their behalf. The sixth defendant (Mr. Lancaster) appeared in person, having entered an appearance in person. I will now outline the status of the defendants other than Mr. Morrissey.

17 9. A copy of the annual return (B1) filed by Northbrook in the Companies Registration Office (CRO) for the period up to 13^th August, 2011 discloses that the directors of the company are Mr. Lancaster and Mr. Morrissey. The only shareholder is named as "Morrissey Family Trust".

18 10. Northbrook claims to be in possession of part of the Premises, described as "87.50% (7/8^th) of the open-plan area of 22, Northbrook Road", the precise location of which is not identified, with rights of access and two car park spaces under a lease dated 1^st July, 2010 (the Northbrook lease) made between Mr. Morrissey of the one part and Northbrook of the other part for the term of four years and eleven months from 1^st July, 2010 to 31^st May, 2015. The Northbrook lease was expressed to be made in consideration of a premium sum of "Ten pounds" (sic) and the rent payable was expressed as follows:

"YIELDING AND PAYING… during the said Term and so in proportion for any less period that a Rent of €220,000 to be paid. The exact timing of the payment of the rent shall be agreed between the parties and will principally be driven by the cash flow requirements of the tenant."

19 Both the identification of the lessee's "take" and the reservation and mode of payment of the rent provided for were extremely unusual and certainly did not comply with normal business practice.

20 11. The Form BI filed in relation to Cyan in the CRO for the period up to 30^th September, 2011 discloses that Mr. Morrissey is one of its directors and that the shareholders include Mr. Morrissey and "The Morrissey Family Trust", although the address given for that entity is different from the address given in the Form B1 in relation to Northbrook, in which the address given of "Morrissey Family Trust" was Mr. Morrissey's home address. However, Mr. Morrissey has averred that he is not a shareholder in either Northbrook or Cyan.

21 12. Cyan claims to be in possession of part of the Premises, being the balance of the open plan area of the Premises, which is described in similar terms as the "take"...