Tennant v Reidy

JurisdictionIreland
JudgeMr. Justice Noonan,Donnelly J.,Pilkington J.
Judgment Date17 June 2022
Neutral Citation[2022] IECA 137
CourtCourt of Appeal (Ireland)
Docket NumberRecord Number: 2021/228
Between/
Stephen Tennant
Plaintiff/Respondent
and
Thomas Reidy and Catherine Reidy
Defendants/Appellants

[2022] IECA 137

Donnelly J.

Noonan J.

Pilkington J.

Record Number: 2021/228

High Court Record Number: 2020/1910P

THE COURT OF APPEAL

Promissory estoppel – Interlocutory injunction – Delay – Respondent seeking an interlocutory injunction – Whether promissory estoppel prevented the respondent from recovering possession

Facts: The plaintiff/respondent, 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/appellants, the Reidys, from interfering with the exercise by the Receiver of his various powers and functions. The Reidys 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 Receiver. The Reidys also relied on McCarthy v McCarthy [2021] IEHC 115 for the proposition that the Receiver had delayed to the extent that interlocutory relief should be refused. Stack J held 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 Reidys 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 Receiver 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 Receiver was therefore prima facie entitled to an injunction, even if he could not show loss. 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 the case. Stack J proposed, given that the Reidys 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. The Reidys appealed to the Court of Appeal complaining that the judge fell into error in applying the doctrine of promissory estoppel and further, overlooked the separate issue of proprietary estoppel. It was further said that the judge’s assessment of the delay issue was erroneous.

Held by Noonan J that prejudice was not a feature of the judgment of the High Court in McCarthy v McCarthy where delay on its own was held sufficient to defeat the claim. It could not, in Noonan J’s view, be said that the defence was not at least arguable. Noonan J noted that the Court of Appeal, and indeed the High Court, was not concerned with determining the issues once and for all; that was clearly a matter for the trial. All that was necessary was an arguable case and Noonan J thought that this was the very least that could be said for the arguments advanced by the Reidys. Insofar as the balance of convenience became relevant in circumstances where the Reidys had an arguable defence, Noonan J disagreed with the trial judge’s assessment. Noonan J found it difficult to see how the balance of convenience and thus the least risk of injustice, would other than favour a couple in their 70s not being turned out of their home as against any relatively minor prejudice suffered by a financial institution having to await the outcome of the trial before enforcing its security.

Noonan J allowed the appeal, dissolved the injunction granted by the High Court and dismissed the Receiver’s application.

Appeal allowed.

JUDGMENT ( Ex Tempore) delivered on the 17th day of June, 2022 by Mr. Justice Noonan

1

This appeal involves a commonly arising claim by a receiver appointed by a financial institution for an order for possession in respect of lands over which the financial institution holds a charge. As appears to be now the norm, the receiver's application was made by way of a motion seeking an interlocutory injunction. Such motions, when granted, frequently dispose of the entire proceedings in circumstances where, once possession has been obtained, the property is sold and there is often little to be gained by proceeding further with the action. The perhaps unusual feature of the present proceedings is that the defendants/appellants (Mr. and Mrs. Reidy) are not the borrowers from the financial institution in question.

2

Although the facts are set out in some detail in the careful written judgment delivered by the High Court (Stack J.) on the 29th July, 2021, it is I think useful to set out a brief chronology of the relevant events, which appear to be as follows:

  • • 2006 to 2010 – AIB advanced various loans to Padraig and Janet Ryan on foot of various facility letters which totalled €2.345M.

  • • 19th May 2008 – The Ryans executed Deed of Charge in favour of AIB over, inter alia, the property the subject matter of these proceedings known as Apartment 2, Fishermans Wharf, Manor Court, Adare, County Limerick being the property comprised in Folio 7132L of the Register, County Limerick.

  • • 23rd May 2008 – The charge was registered on the Folio.

  • • 26th March 2015 – A demand for payment of the outstanding loans issued from AIB, the Ryans have having fallen into default.

  • • 14th September 2015 – On or shortly before this date, Mr. and Mrs. Reidy concluded an oral agreement to buy the property from the Ryans for €100,000. Mr. and Mrs. Reidy paid a sum of €5,000 by way of booking deposit to the estate agents retained by the Ryans in relation to the sale of the property.

  • • 30th September 2015 – AIB were advised of the sale by the Ryans' solicitors. Thereafter, considerable delays ensued as a result of problems with the title to the property.

  • • 29th April 2016 – The plaintiff/respondent herein, Mr. Tennant, was appointed as receiver over the property.

  • • 1st October 2016 – The Ryans and the Reidys agreed that the Reidys would go into occupation of the premises on foot of a letting agreement for one year period at a nominal rent of €100 per month. The Reidys had sold their family home in the meantime and as the property being purchased was in poor condition, they were anxious to commence renovations without further delay.

  • • 5th October 2016 – The Receiver wrote to the occupants of the property, now the Reidys, informing them that he had been appointed.

  • • 16th October 2016 – Mr. Reidy contacted the Receiver's office and spoke to one of his staff, Ms. Sinead Dillon, with whom he had correspondence. In his replying affidavit herein, Mr. Reidy avers that when he discovered the Receiver's appointment, he immediately contacted his office to ascertain the status of the purchase of the apartment. When he spoke to Ms. Dillon, he says he was clearly and unequivocally told by her that the sale would proceed. He avers further that on the same day, the estate agents asked him to provide proof of funds, which was done. Thereafter, the Reidys claim to have expended some €30,000 on renovating the property, although the High Court found this to be €20,000 and that finding has not been appealed.

  • • August 2018 – The Ryans' loans were transferred to Everyday Finance DAC (“Everyday”) and the appointment of the Receiver was novated to Everyday.

  • • March 2019 – Everyday advised the Reidys for the first time that the sale would not now proceed.

  • • 9th April 2019 – Everyday, through its solicitors, demanded possession of the premises and that the Reidys vacate within 7 days.

  • • 9th March 2020 – The plenary summons herein was issued followed by, on the 28th July, 2020, a notice of motion seeking a mandatory injunction directing the Reidys to deliver up possession to the Receiver.

3

There was remarkably little dispute on the facts, or indeed the law, before the High Court. Most notably, following Mr. Reidy swearing a replying affidavit deposing to his conversation with Ms. Dillon, no further affidavit was delivered on behalf of the Receiver taking issue with that averment. The primary ground upon which the application for the injunction was resisted was that the conversation between Mr. Reidy and Ms. Dillon and the subsequent execution of renovations in reliance on it raised an estoppel in favour of the Reidy's, such that it would be unconscionable to grant a mandatory injunction compelling them to deliver up possession.

4

In her judgment, the High Court judge accepted, for the purposes of the injunction application, that an oral agreement for sale had been made between the Ryans and the Reidys. She noted that shortly after the Reidys went into occupation, they would have become aware by virtue of the contact from the Receiver that the property had been mortgaged to AIB. She observed, correctly, that a sale of the property could not bind AIB without its consent referring to the well-known case of Fennell...

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3 cases
  • Ossory Road Enterprise Park Ltd v Rogers
    • Ireland
    • High Court
    • 7 October 2022
    ...to bring itself within the concept of estoppel more generally (as opposed to tenancy by estoppel). Counsel relied on Tennant v. Reidy [2022] IECA 137 which is a recent example of a discussion of the principle of proprietary estoppel which can operate to prevent a property owner from insisti......
  • Sere Holding Ltd v HSE
    • Ireland
    • High Court
    • 10 February 2023
    ...to deal with this matter ( Irish Times, 30 th June, 2022). 78 . As noted by Noonan J. in the Court of Appeal case of Tennant v. Reidy [2022] IECA 137 at para. 23, regarding a dispute over €20,000 which had been heard in the High Court: “[G]iven the amounts involved and the value of the prop......
  • Shannon v Shannon and Another
    • Ireland
    • High Court
    • 14 May 2024
    ...as an ‘utter waste of time’ for the High Court to have to deal with this matter ( Irish Times, 30th June, 2022) 18 In Tennant v. Reidy [2022] IECA 137 at para 23, Noonan J. noted that a dispute over €20,000 that had been heard in the High Court ‘should never have come before the High Court ......

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