Stephen Tennant v Thomas Reidy and Catherine Reidy
| Jurisdiction | Ireland |
| Judge | Ms. Justice Stack |
| Judgment Date | 29 July 2021 |
| Neutral Citation | [2021] IEHC 540 |
| Court | High Court |
| Docket Number | [2020/1910 P] |
[2021] IEHC 540
[2020/1910 P]
THE HIGH COURT
Promissory estoppel – Interlocutory injunction – Delay – Plaintiff seeking an interlocutory injunction – Whether promissory estoppel prevented the plaintiff from recovering possession
Facts: The plaintiff, Mr Tennant (the Receiver), applied to the High Court for an interlocutory injunction which, though expressed in terms of a prohibitory injunction in the notice of motion was in fact a mandatory injunction seeking possession of a property comprised in Folio 7132L, County Limerick, and known as Apartment 2, Fisherman’s Wharf, Manor Court, County Limerick (the Property), together with an injunction restraining the defendants, Mr and Ms Reidy, from interfering with the exercise by the Receiver of his various powers and functions. The defendants submitted that they had an oral agreement to purchase the Property from the registered owners (the Borrowers) which they said they had partly performed by entering into possession and renovating the Property. They also relied on the doctrine of promissory estoppel on the basis of an alleged representation made to them by an employee of the plaintiff. The defendant also relied on McCarthy v McCarthy [2021] IEHC 115 for the proposition that the plaintiff had delayed to the extent that interlocutory relief should be refused.
Held by Stack J that there was no assertion or evidence or any agreement binding Allied Irish Banks plc and AIB Bank (the Banks) or Everyday Finance Designated Activity Company (Everyday) for the release of the charge registered on the Folio, and as she was satisfied that the defendants could not provide any evidence of several of the essential ingredients for a successful claim of promissory estoppel which would prevent Everyday from relying on its legal entitlement to repossess the Property, she was satisfied that the plaintiff had shown that he had a strong case, which was likely to succeed at hearing. Stack J noted that the application was one to restrain a trespass and the plaintiff was therefore prima facie entitled to an injunction, even if he could not show loss: Keane J in Keating & Co. Ltd. v Jervis Shopping Centre Ltd. [1997] 1 I.R. 512. Stack J held that this flows from the nature of property rights which are not subject to de facto compulsory acquisition by limiting the remedy for trespass to that of damages. Stack J did not think that there was any culpable delay on the facts of this case.
Stack J proposed, given that the defendants had been in uninterrupted possession for so long, putting a stay on the injunction to be granted in order to permit them to arrange to move.
Application granted.
JUDGMENT of Ms. Justice Stack delivered on 29 July, 2021.
This is the plaintiff's application for an interlocutory injunction which, though expressed in terms of a prohibitory injunction in the notice of motion is in fact a mandatory injunction seeking possession of a property comprised in Folio 7132L, County Limerick, and known as Apartment 2, Fisherman's Wharf, Manor Court, County Limerick (“the Property”), together with an injunction restraining defendants from interfering with the exercise by the Receiver of his various powers and functions.
The defendants have been residing in the Property since 1 October, 2016, but they are not entitled to be registered as owners of it. Instead, they allege that they have entered into an oral agreement with the registered owners of the Property to purchase it for €100,000. The registered owners (hereinafter “the Borrowers”) originally acquired the Property with the assistance of a loan from Allied Irish Banks plc. and AIB Bank (“the Banks”). The Borrowers originally borrowed the sum of €2,345,000 from the Banks and this sum is charged on the Property. The Banks registered a charge on the Folio on 23 May, 2008. On 4 May, 2016 they appointed the plaintiff as Receiver over the assets of the Borrowers, including the Property. The Banks subsequently assigned their interest to Everyday Finance Designated Activity Company (“Everyday”) by Global Deed of Transfer dated 2 August, 2018, and by Deed of Novation of the same date, the plaintiff's appointment was novated in favour of Everyday. Everyday became registered as owner of the charge on 11 July, 2019.
It is not in dispute that Everyday was entitled to appoint the plaintiff as receiver or that it is the registered owner of the charge. It is further not in dispute that the Borrowers are indebted to Everyday. Furthermore, it is clear that Everyday has, on foot of the charge, a right to enter into possession of the Property and that the monies repayable by the Borrowers have been due and owing for more than three months.
The plaintiff wrote to the occupants of the Property by letter dated 5 October, 2016, enclosing a copy of this Instrument of Appointment. He also wrote by letter dated 7 October, 2016, to the Borrowers, seeking that they forward any copy leases or similar agreements.
The essential submission of the defendants is that they have an oral agreement to purchase the Property from the Borrowers which they say they have partly performed by entering into possession and renovating the Property. They also rely on the doctrine of promissory estoppel on the basis of an alleged representation made to them by an employee of the plaintiff.
It is important to understand precisely what is asserted by the defendants. They say they lodged a deposit in the sum of €5,000 with an estate agent in Adare on 14 September, 2015. It was accepted by counsel for the defendants at hearing that the sum of €5,000 was paid as a refundable booking deposit to the auctioneer.
At the time the booking deposit was paid, the Property was to be purchased by the defendants' son and daughter-in-law but, on inspecting the Property and on discovering the extent of renovation required, the family decided that the defendants would buy it themselves.
Nothing seems to have happened until mid-2016 as there were difficulties with the title to the common areas. However, once these were resolved – presumably through solicitors – the defendants moved into the Property on 1 October, 2016 on foot of a lease for one year at €100 per month which they described as a “licence fee”. The first defendant avers that the agreement with the Borrowers to purchase for the sum of €100,000 was reached in mid-September, 2016 and it was further agreed that the defendants would renovate the Property prior to the conveyance.
This agreement was reached after negotiations between the Borrowers and the defendants which stretched back to 2015. It appears from letters and emails written by solicitors acting for both sides of that transaction, and exhibited to the affidavits filed in this application, that those negotiations were progressing in the usual way and it is likely that, as the plaintiff submits, it was not intended that either party would be bound until formal contracts had been signed by both parties and exchanged.
However, the uncontroverted affidavit evidence is that this was all superseded by an oral agreement in mid-September, 2016 and, if that is so, then for the purposes of this injunction, I accept that the Borrowers and the defendants concluded an oral agreement in mid-September, 2016.
This all appears to have been done without recourse to the solicitors for either the Borrowers or the defendants, as the Borrowers' solicitors state, in an email to the plaintiff dated 21 March, 2018, that the defendants went into possession without their knowledge (though presumably it was known to their clients). It is regrettable that the defendants did not act at all times on foot of legal advice as it is clear that, as early as January 2016, their then solicitors, Messrs. Holmes O'Malley Sexton, were aware that the title documents were with the Borrowers' lending institution and were awaiting receipt of same for the preparation of contracts: see the letter of 24 January 2017, exhibited to the first defendant's replying affidavit. The defendants' solicitors were therefore aware no later than January 2016 that the Property was security for a loan and that a lending institution had rights over it.
On or about 6 October, 2016, the plaintiff engaged a contractor to carry out a property summary report of the property and it revealed that refurbishment works were being carried out. It appears that the first written notification to the plaintiff that the defendants were in occupation and had carried out works to the Property appears to have been by letter from the first defendant to the Plaintiff dated 26 January, 2017.
There is no evidence as to any advices or information given to the defendants by their former solicitors, but the first defendant avers that the defendants received notice on 9 October, 2016, that the plaintiff had been appointed by AIB as receiver of the Property on 29 April, 2016. The latest date upon which the defendants became aware that the property was mortgaged to AIB, therefore, is 9 October, 2016, just over a week after the defendants went into occupation of the Property.
It is common case that Clause 6.1(j) of the Mortgage Conditions contained a covenant by the Borrowers “[n]ot to convey, transfer, assign, demise or let or part with the possession of the Mortgaged Property or any part thereof or any interest therein without the express prior consent in writing of the Lenders” and it is also common case that neither the bank nor Everyday has ever provided any written consent to the sale to the defendants.
Any sale without that prior written consent cannot bind the Bank or its successor in title: see Fennell v. N17 Electrics Ltd. (in liquidation) [2012] 4 I.R. 634, recently approved by the Court of Appeal in Kennedy v. O'Kelly [2020] IECA 288....
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