Start Mortgages Designated Activity Company v Peter Barry
| Jurisdiction | Ireland |
| Judge | Mr. Justice Haughton |
| Judgment Date | 03 February 2023 |
| Neutral Citation | [2023] IECA 22 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record No: C.A. No. 215 of 2022 |
[2023] IECA 22
Costello J.
Haughton J.
Pilkington J.
Record No: C.A. No. 215 of 2022
THE COURT OF APPEAL
Adjournment – Appointment of receiver – Prejudice – Appellant appealing against the refusal to adjourn the respondent’s application to confirm the appointment of a receiver by way of equitable execution over the balance of the proceeds of a fire insurance claim – Whether the trial judge erred in law, breached the appellant’s right to fair procedures and acted to his prejudice
Facts: The defendant/appellant, Mr Barry, appealed to the Court of Appeal against the refusal of the High Court (Roberts J) on 27 July 2022 to adjourn, on the application of counsel for the defendant, the application of the plaintiff/respondent, Start Mortgages DAC, to confirm the appointment of a receiver by way of equitable execution over the balance of the proceeds of a fire insurance claim held by Zurich Insurance. The defendant was incarcerated in the Midlands Prison at the time of the adjournment application. Having refused the adjournment Roberts J went on to make orders confirming an order made ex parte by Butler J on 28 June 2022. The defendant asserted that in refusing an adjournment and thereby failing to allow the defendant’s legal advisors to take his instructions and deciding the matter without having heard the defendant in substance, the trial judge erred in law, breached the defendant’s right to fair procedures, and acted to his prejudice.
Held by Haughton J that the trial judge acted judicially, and did not act unfairly in exercising her discretion to refuse the adjournment. Haughton J was satisfied that the defendant, having had ample time and opportunity to indicate a basis for setting aside the order of Butler J, singularly failed to present any factual or legal basis for a set aside either to the High Court or the Court of Appeal. Haughton J was satisfied that the defendant had not demonstrated any real prejudice, whereas the plaintiff had demonstrated some prejudice to it were the adjournment to have been granted. In all the circumstances, Haughton J was satisfied that there was no error of law, and no significant unfairness, that would justify the Court of Appeal in interfering with the trial judge’s exercise of her discretion. In Haughton J’s view, justice was met by the refusal to adjourn the matter and the confirmation of the orders made by Butler J.
Haughton J dismissed the appeal. Noting that the balance of the insurance monies were held by Fieldfisher, the solicitors acting for the plaintiff, pending the outcome of the appeal, Haughton J held that as the appeal had been unsuccessful it followed that as far as the proceedings and the appeal were concerned Fieldfisher was released from any undertaking given to retain the fund and was free to release those monies according to the plaintiff’s instructions. Haughton J held that as the plaintiff was entirely successful in opposing the appeal it followed from s. 169 of the Legal Services Regulation Act 2015 that the plaintiff should be entitled to its costs of the appeal to be adjudicated in default of agreement.
Appeal dismissed.
JUDGMENT of Mr. Justice Haughton delivered electronically on 3rd day of February, 2023
This is an appeal against the refusal of the High Court (Roberts J.) on 27 July 2022 to adjourn, on the application (“ the adjournment application”), of counsel for the appellant/defendant (“ the defendant”) the respondent/plaintiff's (“ the plaintiff”) application to confirm the appointment of a receiver by way of equitable execution over the balance of the proceeds of a fire insurance claim held by Zurich Insurance. The defendant was incarcerated in the Midlands Prison at the time of the adjournment application.
Having refused the adjournment Roberts J. went on to make the following orders, confirming an order made ex parte by Butler J. on 28 June 2022:
“IT IS ORDERED that Killian O'Reilly Partner of Fieldfisher Solicitors be appointed Receiver by way of Equitable Execution over the proceeds of the Zurich Insurance PLC and/or Zurich Insurance Limited T/A Eagle Star Policy of Insurance with Policy Reference 01 HAI 1432721 held by or on behalf of Zurich Insurance PLC and/or Zurich Insurance Limited T/A Eagle Star as will satisfy the Plaintiff's said judgment
AND IT IS ORDERED that Killian O'Reilly Partner of Fieldfisher Solicitors be appointed Receiver by way of Equitable Execution over the proceeds of the Zurich Insurance PLC and/or Zurich Insurance Limited T/A Eagle Star Policy of Insurance with Policy Reference 01 HAI 1432721 held by Burns Nowlan Solicitors of 31 Main Street Newbridge Co. Kildare W12 RC98 as will satisfy the Plaintiff's said judgment
And the Court Doth make no Order as to Costs of the within ex parte Motion and Order”
The notice of appeal is confined to the order of Roberts J. – there is no appeal in respect of the original order of Butler J.
The five grounds taken together assert that in refusing an adjournment and thereby failing to allow the defendant's legal advisors to take his instructions and deciding the matter without having heard the defendant in substance, the trial judge erred in law, breached the defendant's right to fair procedures, and acted to his prejudice. The sole issue therefore is whether the trial judge was correct to refuse an adjournment.
In any application for an adjournment it is important to understand the context in which it is made, and that applies equally to the appellate court asked to review a refusal to adjourn. In this appeal there is a considerable history to the application that it is appropriate to set out.
The background to the receivership application is set out in the grounding affidavit of Eva McCarthy, litigation manager of the plaintiff, sworn on 28 June 2022, and the exhibits to that affidavit.
Pursuant to letter of loan offer dated 4 April 2007, the plaintiff advanced to the defendant a loan of €265,500. This was secured by mortgage deed dated 7 April 2007 (“ the Mortgage”) whereby the defendant mortgaged “ALL THAT AND THOSE a plot of ground with cottage thereon being part of the townland of Ballybrack and Barony of DECIES WITHOUT DRUM” contained in Folio 10202 County Waterford (“ the property”). Under clause 7.01(e) the defendant covenanted to keep the property insured “ in the joint names of the Borrower and the Lender” in the full replacement cost.
On 2 November 2008 the property was destroyed by fire. The defendant engaged John P. O'Donohoe Solicitors to realise the funds due by Zurich Insurance on foot of the policy of insurance held by the defendant.
By clause 7.01(f) of the Mortgage the defendant covenanted to apply insurance monies in respect of the property –
“…at the option of the Lender either in or towards making good the loss or damage in respect of which such moneys are payable or received or in or towards the discharge of the secured moneys AND the Borrower hereby declares that any such moneys payable to or received by him shall be held upon trust for the Lender subject to the proviso for redemption hereinbefore contained.”
In 2009 Zurich agreed with the defendant/his solicitors to settle the insurance claim for €222,642.32. By way of first tranche of payment on 24 November 2009, Zurich paid out €85,000 (although some later correspondence suggests the pay out may have been €91,000) by cheque made out to the plaintiff and defendant jointly. It is clear that the plaintiff never saw this cheque.
Accompanying a letter dated 21 December 2009, John P. O'Donohoe Solicitors sent to the plaintiff a cheque for €30,000 “ being the arrears of the mortgage and bringing payments up to and including December, 2009 payments”. The letter also referred to preparation by an engineer of plans for obtaining planning permission to rebuild, and a builder's estimate. No mention was made of the cheque received from Zurich for €85,000, or how that came to be encashed, given that it was in joint names, and what had been done with the balance.
Queries from the plaintiff to John P. O'Donohoe Solicitors in letters of 12 January 2010, and 14 and 16 July 2010, seeking confirmation that that firm continued to hold the cheque for €85,000, went unanswered.
In the meantime arrears mounted on the mortgage account, and the plaintiff after making appropriate demands instituted the present proceedings by summary summons issued on 14 April 2011. No appearance was entered and a default judgment was obtained on 7 February 2012, in the sum of €225,785.53 plus costs of €339.63. On the same day an order of fi fa (an execution order) issued addressed to the County Registrar, County Waterford. It does not appear that any recovery was made on foot of that execution. Further the defendant did not thereafter make any further payments to the plaintiff in reduction of the balance due on the Mortgage.
On 29 March 2012 the defendant wrote to the plaintiff seeking a moratorium on payments and arrears under the Mortgage, and he stated:
“My ex-solicitor Mr John O'Donohoe paid Start Mortgages €30,000 arrears without my written consent in 2009. These funds came from the house fire insurance 1st stage payment to which Mr O'Donohoe was the administrator. Mr. O'Donohoe has also subtracted funds from the cheque for his own benefit both as a solicitor and an accountant.”
This seems to have been the first time that the plaintiff was made aware that the €30,000 payment came from the fire insurance pay out, and, by inference, that the first tranche payment of €85,000 was no longer held intact by John P. O'Donohoe Solicitors.
By letter dated 2 May 2013 from Carter Anhold Co, solicitors newly instructed by the defendant, it was suggested that “ …it was not in the interests of our client,...
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...Landlord and the RTB to suffer the cost and inconvenience of additional court appearances. See, generally, Start Mortgages DAC v. Barry [2023] IECA 22 (at paragraph 52 Having regard to all of the factors identified above, it would have been disproportionate to adjourn the hearing of the app......