O'Shea and Another v O'Connor and Another

• Jurisdiction: Ireland
• Court: High Court
• Judge: Ms Justice Nessa Cahill
• Judgment Date: 07 November 2024
• Neutral Citation: [2024] IEHC 642
• Docket Number: Record no. 2024/1386 P

Between:

Sean O'Shea and Meave O'Shea

Plaintiffs

and

David O'Connor and Everyday Finance DAC Trading as Link Financial

Defendants

[2024] IEHC 642

Record no. 2024/1386 P

THE HIGH COURT

Injunctive relief – Possession of property – Balance of justice – Plaintiffs seeking to restrain the defendants from taking possession of, and collecting rents from, properties – Whether there was a serious issue to be tried

Facts: The plaintiffs, Mr and Ms O’Shea, applied to the High Court for injunctive relief concerning three buy-to-let properties in which they invested. One of the properties had been sold and the second defendant, Everyday Finance DAC (Everyday), held the proceeds of that sale; the first defendant, Mr O’Connor, a receiver appointed by Everyday, was in control of, and collecting the rent payable in respect of the second property; and no steps had been taken by Everyday regarding the third property. By the terms of the motion as issued, the plaintiffs sought to restrain the defendants from taking possession of, and collecting rents from, the properties. They also sought to restrain the receiver from taking any further steps in the receivership. The parties presented the primary question as being whether there was a serious issue to be tried. Both sides asserted that the balance of justice weighed in their favour. The defendants also relied on an allegation of delay, and on the asserted insufficiency of the plaintiffs’ undertaking in damages, to defeat the injunction application.

Held by Cahill J that this was a clear example of a case in which the loss being apprehended by both parties was solely and exclusively financial in nature, and there was no evidence of a risk of irremediable prejudice to either party. Borrowing the language of Merck Sharp & Dohme v Clonmel Healthcare [2019] IESC 65, she was “robustly sceptical” of the parties’ assertions to the contrary; there were in fact no serious attempts to make such a case. Furthermore, she noted that the situation in which one property was controlled by Everyday, one property was controlled by the plaintiffs, and Everyday held the proceeds of sale of the third, had subsisted since March 2024 and neither side had made an effort to demonstrate any prejudice resulting from that scenario. Given the balance of justice was evenly weighed between the two sides, she had some preliminary regard to the relative merits of the parties’ substantive positions. She found that there was only one claim which met the undemanding threshold of a “serious issue”. However, on a preliminary assessment of its merit, she formed the tentative view that the plaintiffs’ case was weaker than that of the defendants on that issue. She held that this weighed against the grant of the relief sought. She also noted that there had been delay by the plaintiffs, which resulted in the relevant status quo being that which existed at the date of issue of the proceedings; consequently, no order was granted for the restoration of the status quo prior to March 2024. She held that the status quo at that time was that Everyday was taking steps and was entitled to take steps to enforce its security, and this was the status quo that should be maintained.

Cahill J held that the justice of this case lay in favour of the refusal of the relief sought by the plaintiffs.

Relief refused.

JUDGMENT of Ms Justice Nessa Cahill delivered on 7 November 2024

Introduction

1 This is an application by commercial investors for certain injunctive relief concerning three buy-to-let properties in which they invested.

2 One of the properties has been sold and the Second Defendant (“ Everyday”) holds the proceeds of that sale; a receiver appointed by Everyday (the First Defendant, “ the Receiver”) is in control of, and collecting the rent payable in respect of the second property; and no steps have been taken by Everyday regarding the third property.

3 By the terms of the Motion as issued, the Plaintiffs seek to restrain the Defendants from taking possession of, and collecting rents from, the properties. They also seek to restrain the receiver from taking any further steps in the receivership.

4 The parties presented the primary question as being whether there is a serious issue to be tried. This was the focus of the submissions made. Both sides assert the balance of justice weighs in their favour. The Defendants also rely on an allegation of delay, and on the asserted insufficiency of the Plaintiffs' undertaking in damages, to defeat the injunction application.

5 There are some notable features of this Motion.

6 First, scant attention was paid to the balance of justice by either side (other than the delay and undertaking points just mentioned). The Plaintiffs' written submissions exemplify this and contain one reference to a “ risk of injustice” and a single assertion that “ the balance of justice demands that the current position is maintained pending a full hearing,” without any factual explanation or elaboration of the alleged injustice (save for a suggestion that properties may be sold). The affidavit grounding this Motion contains only two sentences asserting – in bald terms – that damages would not be adequate if the properties were sold and there would be injustice if the receiver took possession of the properties, collected rents and/or sold the properties.

7 Second, there is no suggestion that either side has a connection or interest that it is other than purely financial in the properties. There are bare assertions of reputation and property rights by the Plaintiffs but there is no elaboration or explanation of these.

8 Third, there is no evidence before me that any person has any specific or imminent plans or intentions with regard to any particular property. This is not a case in which a mode of sale, selling price or indeed any specific pending development is being asserted to present a risk of imminent prejudice.

9 Another feature of this Motion that warrants mention is that it concerns three separate properties and different factual and legal considerations arise in respect of each. As adverted to above: one property has been sold, one is in the possession of the Receiver, and no steps have been taken to date in respect of the third. While the parties dealt with the Motion as a unitary application that pertains to the three properties, it will become necessary – particularly when it comes to the balance of justice — to address each property individually and independently of the others (without losing sight of the fact that there is cross-collateralization in favour of Everyday as between them).

Background

10 The Plaintiffs are a husband and wife who have made commercial, buy-to-let investments in three properties (“ the Properties”).

11 In 2002 the Plaintiffs acquired Apartment 14, Inver Gael, County Roscommon (“ Inver Gael”).

12 On 28 March 2006, the Plaintiffs acquired 111 Celtic Park Ave, Dublin 9 (“Celtic Park”), part-funded by borrowings from AIB Mortgage Bank (“ AIBMB”) in the amount of €530,000, and also secured by cross-collateralization of Inver Gael.

13 On 28 March 2006, the Plaintiffs acquired 16 Lennox Street, Dublin 8 (“ Lennox Street”), part-funded by borrowings from AIBMB in the amount of €500,000 and also cross-collateralized by Inver Gael;

14 On 5 September 2006, the Plaintiffs borrowed a further sum of €32,000 in respect of Inver Gael, bringing the total indebtedness in respect of that property to €172,500.

15 As of 2006, the total sum owed by the Plaintiffs to AIBMB was €1,202,500.

16 Each of the three mortgages were entered into between the Plaintiffs, on the one hand, and AIBMB and AIB plc (together, “ AIB”) and conferred a power to appoint a receiver and each of the mortgages operated as security for all liabilities of the Plaintiffs to AIBMB.

17 On 2 August 2018 AIB purported to sell the Plaintiffs' mortgages and loans to Everyday, by a global deed of transfer (“ the Transfer Deed”). The Plaintiffs were notified of the transfer by letters dated 8 August 2018 (from AIBMB) and 15 October 2018 (from Everyday). An issue is raised in the Proceedings regarding this Transfer Deed.

18 Letters demanding payment of monies owing were sent to the Plaintiffs, including on 20 December 2020 and 7 June 2023.

19 Everyday appointed the Receiver in respect of two of the Properties, Lennox Street and Inver Gael, on 6 October 2023.

20 Since 6 October 2023 the Receiver has been in possession of Lennox Street and has collected the rent payable in respect of that property, amounting to €26,000. The Receiver also collected the rents on Inver Gael from that date.

21 Prior to 28 March 2024, the Receiver collected rent in the approximate amount of €3,500 (the figures set out in these paragraphs are as pleaded by the Plaintiffs in the Statement of Claim).

22 On 28 of March 2024, Inver Gael was sold. While it was asserted on behalf of the Plaintiffs at the hearing of this Motion that the Receiver sold Inver Gael, it appears to be common case that it was in fact Everyday which sold that property.

23 Everyday retains net proceeds from that sale of €173,078.52.

24 As of the date of this Motion, no receiver has been appointed, or steps taken, by Everyday in respect of Celtic Park.

25 According to the Defendants, as of 15 April 2024, the total amount due and owing on foot of the facilities is €1,440,297.16 and interest continues to accrue at a rate of 6.35%.

The Proceedings

26 By Plenary Summons dated the 15 March 2024 the Plaintiffs seek sixteen orders against the Defendants. These include an interlocutory injunction to restrain the defendants from taking possession of Lennox Street., Celtic Park or Inver Gael, and to restrain the collecting of rents from the tenants of those properties. The Plaintiffs also seek an injunction to restrain the First Defendant from taking any further steps in the receivership of...