The Wise Finance Company Ltd v O'Regan

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 26 June 1998
• Neutral Citation: [1998] IEHC 105
• Docket Number: No. 595 Sp./1996
• Court: High Court
• Date: 26 June 1998

[1998] IEHC 105

THE HIGH COURT

No. 595 Sp./1996

THE WISE FINANCE COMPANY LTD v. O'REGAN

BETWEEN

THE WISE FINANCE COMPANY LIMITED

PLAINTIFF

AND

JEREMIAH (OTHERWISE KNOWN AS LOUIE) O'REGAN

DEFENDANT

Synopsis

Commercial

Land; possession; charge on the land; lease; application for substituted relief; plaintiff registered owner of charge on defendant's lands; subsequent lease of lands; application by receiver of lessee company to be joined as notice party; locus standi; whether lease valid; whether receiver eligible for appointment; validity of charge; whether plaintiff was an unlicensed moneylender; whether the business of the lender at the date the transaction was effected consisted wholly or mainly of the business of lending money on the security of land; s.18(13) of Conveyancing Act, 1881; s.6 Moneylenders Act, 1900 as amended by s.136 Central Bank Act, 1989; article 2 Money-Lenders Act 1900 (Section 6(e)) Order, 1993; s 135(1), Companies Act, 1963 as substituted by s.170 Companies (Amendment) Act 1990

Held: Application refused (High Court: Laffoy J. 26/06/1998)

The Wise Finance Company Ltd. v. O'Regan

Mr Grimes who claimed to act as receiver of the company leasing lands from the defendant was not a validly appointed receiver as he had been a director of the company within 12 months of the commencement of the receivership. Further, the purported lease was void as it was made contrary to the covenant made by the defendant not to lease the lands without the permission of the plaintiff. Therefore, he was not entitled to an order joining him as a party to the proceedings. In the absence of appeal the order of 24 February stands although cognisance should be taken of the amendment of the Moneylender’s Act 1900 by section 136 of the Central bank Act 1989 and also the existence of the 1993 Moneylenders Order which declares that the Moneylender’s Act does not apply to bodies corporate whose business consists wholly or mainly of lending money for the purposes of purchasing, developing or otherwise dealing in land whether or not the loan is secured on land or for some other purpose where the loan is secured on land whether with or without other security. The High Court so held in refusing the relief sought.

Miss Justice Laffoy

1 These proceedings were instituted by a special summons which was issued on 2nd December, 1996. On the endorsement of claim on the special summons the Plaintiff, which is a limited liability company registered under the laws of England and Wales, claimed the following reliefs:-

2 (a) An Order deeming the amount of £167,500 in respect of principal and such other sums as the Court might direct in respect of interest including the sum of £18,750 well-charged on the Defendant's interest in the lands set out in the First Schedule thereto;

3 (b) An Order directing that the said charge be enforced by a sale of the property set out in the First Schedule thereto;

4 (c) An Order granting the Plaintiff possession of the property set out in the First Schedule thereto;

(d) All necessary accounts, directions and enquiries;

5 (e) Such further or other relief as to the Court might seem fit; and

6 (f) The costs of the proceedings.

7 The property set out in the First Schedule was therein described as follows:-

"ALL THAT AND THOSE the property known as Weir Island, Carrigtwohill, near Fota, situate in the Townland at Barryscourt and the Barony of Barrymore, in the County of Cork being all the property comprised in Folio 37201 of the Register of Freeholders for the County of Cork, held in fee simple and consisting of a partially completed dwelling-house on two acres and the remaining portion consisting of a quarry used for excavating aggregate and hard-core."

8 The proceedings were grounded on the Affidavit of Ronald Weisz sworn on 3rd December, 1996 which proved the following facts:-

9 1. that the Defendant was the registered owner of the lands registered on Folio 37201 of the Register of Freeholders, County Cork;

10 2. that the Defendant had charged the said lands in favour of the Plaintiff by an indenture of charge dated 24th April, 1996 to secure the following advances, namely:-

11 (i) an advance of £40,000 made on foot of a commitment letter dated 6th October, 1995;

12 (ii) an advance of £19,000 made on foot of a commitment letter dated 8th December, 1995;

13 (iii) an advance of £40,000 made on foot of a commitment letter dated 1st February, 1996; and

14 (iv) an advance of £23,500 made-on foot of a commitment letter dated 16th April, 1996;

15 3. that the Defendant had further charged the said lands in favour of the Plaintiff by an indenture of charge dated the 12th day of June, 1996, which secured an advance of £45,000 on foot of a commitment letter dated 1lth June, 1996;

16 4. that the said charges were registered as burdens on Folio 37201of the Register of Freeholders, County Cork and the Plaintiff was registered as the owner of the charges.

17 5. that at the date thereof there was due to the Plaintiff on foot of the said charges £167,500 in respect of principal and £18,750 in respect of interest; and

18 6. that despite repeated demands the Defendant had failed to pay the principal and interest due.

19 The special summons came on for hearing on 24th February, 1997. The Defendant had not entered an appearance and he did not attend and was not represented at the hearing An Order was made declaring that the principal moneys and interest secured by the indentures of charge stood well-charged on the Defendant's interest in the lands registered on Folio 37201. There followed a finding that it appeared that there was due to the Plainest on foot of the said indentures of charge a sum of £167,500 for principal and a sum of £???18??? interest up to 3rd December, 1996, making together the sum of £186,250. It was ordered that the Defendant should be at liberty to come in and dispute that finding within one month from the date of the service of the Order upon him. It was further ordered that, in default of the Defendant so disputing the said sum within the time aforesaid and in default of payment to the Plaintiff of the said sum together with further interest on the principal sum of £167,500 at the rate of 8% per annum until payment and the costs thereinafter awarded within three months from the date of service aforesaid, the lands registered on Folio 37201 should be sold at such time and place and subject to such conditions as should be settled by the Court. An account of all encumbrances subsequent as well as prior to and contemporaneous with the Plaintiff's demand and an enquiry as to the respective priorities of all such demands as should be proved were directed to be taken and made in the Examiner's Office. The Plaintiff was awarded the costs of and incidental to the application and Order and the proceedings there under when taxed and ascertained in equal priority with its demand.

20 It is not clear whether the Order of 24th February, 1997 was served on the Defendant. In any event, on 17th February, 1998 the Plaintiff issued a motion in these proceedings against the Defendant returnable for 9th March, 1998 in which the Plaintiff sought either:-

21 (a) An Order pursuant to Order 13, Rule 11, of the Rules of the Superior Courts, 1986 varying the Order dated 24th February, 1997 by the substitution of the relief sought at paragraph (c) in the special summons (being an Order for possession) for the reliefs sought at paragraphs (a) and (b) of the special summons (being a well-charging Order and Order for sale), or

22 (b) Alternatively, an Order pursuant to Order 27, Rule 14, of the Rules of the Superior Courts 1986 setting aside the said Order dated 24th February, 1997 and granting the Plaintiff judgment in terms of paragraph (c) of the special summons.

23 That application was grounded on the Affidavit sworn on 1lth February, 1998 of the Plaintiffs Solicitor, Eamonn O'Connor. In that Affidavit Mr. O'Connor averred that in the months of October, November and December 1997 certain third parties expressed an interest in purchasing the lands registered on Folio 37201, but that it emerged, as a result of enquiries, that "the processing of a sale of the said property through the Examiner's Office was likely to take a considerable period of time thereby deterring those third parties who had expressed an interest in purchasing the said property". The deponent also referred to Clause 13(b) of each of the indentures of charge which gave the Plaintiff certain powers, including a power of sale, in the event of default by the Defendant in payment of the moneys thereby secured. It was averred that an order for possession would have been more advantageous to the Plaintiff than the reliefs sought in paragraphs (a) and (b) of the special summons and would have facilitated a sale without the necessity of a Court sale through the Examiner's Office. It was further averred that the Defendant had not paid to the Plaintiff any of the sums due on foot of the indentures of charge since the date of the Order of 24th February, 1997.

24 Mr. O'Connor's Affidavit also disclosed that separate proceedings had been instituted by the Plaintiff on 3rd April, 1997 against the Defendant (Record No. 1997 No. 3891P Ct. 6). I will refer to these proceedings as the plenary proceedings. By an Order made in the plenary proceedings on 28th April, 1997 by the President, which was a Consent Order, it was ordered that the Defendant his servants or agents or any persons acting in concert with them or with the knowledge of the making of the Order should be restrained from removing and/or carrying away sand or gravel or other property from the lands registered on Folio 32701 or otherwise unlawfully interfering with the said property.

25 On 14th April, 1998 Michael Grimes issued a motion in these proceedings and in the plenary proceedings seeking, among...