Pepper Finance Corporation (Ireland) DAC v Persons Unknown

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 28 July 2022
• Neutral Citation: [2022] IECA 170
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2021/268

Between/

Pepper Finance Corporation (Ireland) DAC

Respondent

and

Persons Unknown in Occupation of the Property known as 21 Little Mary Street Dublin 1

Appellants

Pepper Finance Corporation (Ireland) DAC

Respondent

and

Persons Unknown in Occupation of the Property known as 31 Richmond Avenue Fairview Dublin 3

Appellants

[2022] IECA 170

Whelan J.

Collins J.

Pilkington J.

Appeal Number: 2021/268

Appeal Number: 2021/270

THE COURT OF APPEAL

Attachment – Committal – Mootness – Appellants appealing against a judgment and subsequent orders made in attachment and committal motions – Whether the appeal was moot

Facts: The appellants appealed to the Court of Appeal against a judgment delivered on 13 August 2021 and subsequent orders made by Sanfey J in attachment and committal motions in the High Court on 1st October 2021. The first order under appeal was made in proceedings 2020/6888 Pepper Finance Corporation (Ireland) DAC v Persons Unknown in Occupation of the property Known As 21 Little Mary Street, Dublin 7. The second Order under appeal was made in proceedings 2020/6889P Pepper Finance Corporation (Ireland) DAC v Persons Unknown in Occupation of the Property Known As 31 Richmond Avenue, Fairview, Dublin 3. Grounds 1, 2 and 3 contended that the trial judge erred in considering that the sole order relevant to a determination of contempt was the order made by Reynolds J on the 25th November, 2020 when same was subsequently varied by Noonan J in the Court of Appeal on 15th January, 2021; both orders were relevant and were required to be served. The latter order was not served (with or without penal endorsement) on the appellants’ solicitor until after the motion for committal had issued and was served only on the appellants’ solicitors in late February 2021. The orders made on 1st October, 2021 made no reference to the order of Noonan J extending the stay made in the Court of Appeal 15th January 2021 and varying the earlier order of 25 November 2020. Grounds 4 and 5 argued that the appellants were entitled to be named on the title to the proceedings as defendants and in the orders made against them. Ground 6 submitted that the penal endorsement was invalid. Ground 7 argued that the judge applied the wrong legal test and standard in determining the motion. Ground 8 submitted that the judge erred in holding that service was valid. The respondent, Pepper Finance Corporation (Ireland) DAC, raised a preliminary objection that since the orders made had been subsequently vacated there was no basis for the appeal.

Held by Whelan J that there was a “live controversy” the resolution of which was capable of affecting the rights of the parties and the appeal was effectively not moot. She held that the trial judge fell into error in concluding that service of the penally endorsed orders on the solicitors for the appellants on 22nd February, 2021 cured deficiencies which subsisted as of the date the motion issued on 12th February 2022. She held that he erred in finding at para. 22 that the transcript of the statement of Noonan J on 15th January 2021 trumped the clear language of the order extending both stays granted on 25th November 2020 for three weeks. She held that he erred in finding that the orders of 15th January 2021, duly endorsed, had been validly served on the appellants. She held that he erred in granting the orders sought on the stated basis.

Whelan J held that the cumulative impact of all the above frailties and deficits was that the orders of the trial judge fell to be set aside as having been wrongly granted. The appellants having succeeded in their appeals, her preliminary view was that they appeared to be entitled to the costs of the appeals. She held that the appellants were also presumptively entitled to their costs of the proceedings in the High Court.

Appeals allowed.

JUDGMENT of Ms. Justice Máire Whelan delivered on the 28 ^th day of July 2022

Introduction

1 . This is an appeal against a judgment delivered on 13 ^th August, 2021 and subsequent orders made by Sanfey J. in attachment and committal motions in the High Court on 1 ^st October, 2021 in each of the above-entitled proceedings.

2 . The first Order under appeal was made in proceedings 2020/6888 between Pepper Finance Corporation (Ireland) DAC v. Persons Unknown in Occupation of the Property Known As 21 Little Mary Street, Dublin 7, ordering: “Margaret Hanrahan and Augustin Gabor with any other adult person who is in possession and/or occupation of the said property to have them before this Court … on Friday the 8 ^th day of October 2021 … to answer for the contempt which by reason of such default it is alleged they have committed against this Court and to show cause why they should not be committed to prison for such contempt.”

3 . The second Order under appeal was made in proceedings 2020/6889P Pepper Finance Corporation (Ireland) DAC v Persons Unknown in Occupation of the Property Known As 31 Richmond Avenue, Fairview, Dublin 3. It provides: “…IT IS ORDERED that the Plaintiff be and it is hereby at liberty to issue an Order of Attachment directed to the Commissioner and Members of An Garda Síochána against each of the said Firuca Puscas and Gavrila Puscas and Doina Bortas and Vasile Circu and Mihai Bataraga and Danut Vlad and Irina Ucaciu and Ion Mihali and any other adult person who is in possession and/or occupation of the said Property to have them before this Court (Mr. Justice Sanfey) on Friday the 8 ^th day of October 2021 at the hour of 2.00 o'clock in the afternoon (or the first opportunity thereafter) to answer for the contempt which by reason of such default it is alleged they have committed against this Court and to show cause why they should not be committed to prison for such contempt.”

4 . 31 Richmond Avenue and 21 Little Mary Street (“the properties”) were at all material times sub divided into separate dwelling units. In the case of 31 Richmond Avenue, it was sub-divided into 7 separate units, and 21 Mary Street was sub-divided into 5 separate dwelling units. They had been so sub-divided since at least 2006/2007. The appellants were occupiers of dwelling units in one or other of the premises. The mortgagor, Mr. Jerry Beades, a defaulting mortgagee against whom orders for possession had been obtained in respect of the properties, was the landlord and the occupiers in each case paid rent to him. The relationship of landlord and tenant never subsisted between Pepper and the appellants.

5 . To more fully understand the genesis of the orders under appeal it is necessary to briefly consider the key relevant events in the litigation history as between Pepper's predecessors in title and the mortgagor.

Background

6 . On the 23 ^rd June, 2008 IIB Homeloans Limited (formerly Irish Life Homeloans Limited) (“IIB”) obtained an order for possession against Mr. Beades in respect of the properties arising from a default under the terms of mortgages secured over them. The said order for possession of the properties was the subject of an unsuccessful appeal by Mr. Beades to the Supreme Court which was ultimately dismissed by that court in 2014.

7 . Over the years, title to the mortgagee's interest in the security changed hands from time to time. Ultimately in 2020 Beltany Property Finance DAC disposed of the mortgagee's interest in the security to Pepper Finance Corporation (Ireland) DAC (“Pepper”).

8 . By order made on the 18 ^th November, 2020 by Mr. Justice Twomey in the High Court, Pepper was substituted as plaintiff in the substantive proceedings and secured an order pursuant to O. 42, r. 24(a) of the Rules of the Superior Courts and/or the inherent jurisdiction of the High Court granting liberty to issue execution on foot of the possession order of the 23 ^rd June, 2008. Other consequential orders were also made on that date.

Dwellings

9 . Before considering the grounds of appeal it is necessary to have regard to the nature and usage of the two properties at the date the High Court granted the original order for possession on the 23 ^rd June, 2008. This is so because it appears to have been variously contended on behalf of Pepper that all lettings of the properties by the mortgagor were prohibited under the terms of the mortgage itself and further that neither Pepper nor its predecessors in title had knowledge of the tenancies. The validity or otherwise of any negative pledge to be found in the mortgage instruments is not centrally relevant to this appeal and for that reason I shall express no concluded view on that issue. In any event, as a matter of fact it appears that under a mortgage dated the 12 ^th June, 2003 created over both properties, IIB Homeloans Limited (“IIB”) consented to the borrower creating tenancies in respect of the premises subject to various conditions specified in Clause 34 of the Special Condition attaching to the loan offer. There does not appear to be any evidence of any objection on the part of IIB to the creation of any tenancies by the mortgagor up to or including the date of the order for possession made on 23 ^rd June, 2008 in the High Court.

10 . The level of knowledge on the part of IIB as to the existence of tenancies and the identity of the tenants in the properties at the date the order for possession was granted by Dunne J. on the 23 ^rd June, 2008 in respect of both properties is a question of fact which I will now consider.

The 2008 Affidavit of Service

11 . In an affidavit of service sworn in the possession proceedings in January 2008 by Maria Kavanagh, a legal secretary, supporting the application for the order for possession, copies of the summons were deposed to have been served on individuals in occupation of Flats A to G, inclusive, at 31 Richmond Avenue in December 2007.

12 . In relation to 21 Little Mary Street, the affidavit of service deposes to service of copies of the summons on the 19 ^th December, 2007 on named...