Thompson v Tennant
| Jurisdiction | Ireland |
| Judge | Ms. Justice Nuala Butler |
| Judgment Date | 12 November 2020 |
| Neutral Citation | [2020] IEHC 594 |
| Docket Number | [2019/7337/P] |
| Court | High Court |
| Date | 12 November 2020 |
AND
[2020] IEHC 594
Nuala Butler
[2019/7337/P]
THE HIGH COURT
Interlocutory relief – Injunction – Appointment of receiver – Plaintiffs seeking interlocutory relief – Whether there was a fair question to be tried
Facts: The first plaintiff, Ms Thompson, between 2007 and 2010, entered into a series of loan facility agreements with the Ulster Bank. The loans advanced were secured by way of a charge created by a mortgage dated 29th November 2007 over two properties, namely no. 2 and no. 4 Upper Eden Road, Glenageary, Co. Dublin. By Global Deeds of Transfer in February 2015 and February 2016 the Ulster Bank transferred its interests in the loan facility and the charge over the mortgaged property to the second defendant, Promontoria (Aran) Ltd. In circumstances where the secured liabilities had become payable by the plaintiff to Promontoria on 10th January 2019, Promontoria appointed the first defendant, Mr Tennant, as a receiver over property identified in the Schedule to the deed of appointment. That property was identified in the Schedule as being the premises at no. 2 Upper Eden Road. The solicitors on behalf of the plaintiff sought to establish the legal basis for the appointment of a receiver and the solicitors on behalf of the defendants sought certain information including copies of all leases applicable to the premises. The defendants also sought access to the property for the purposes of carrying out an inspection to obtain a BER certificate and a Property Summary Report. The plaintiffs instituted proceedings on the 20th September 2019 seeking a series of permanent injunctions against the defendants; an order declaring the appointment of the receiver invalid and orders directing accounts of the sums due under the loan facilities and in particular of an adjustment to the loan balance dated 7th February 2017. The plaintiffs also sought interim injunctions in similar terms. When the matter was returned to the High Court the defendants offered an undertaking to refrain from taking possession of or accessing the premises at no. 2 Upper Eden Road pending the return date for the plaintiffs’ motion seeking injunctive relief. That motion was issued on 24th September 2019 and was the application before the court.
Held by Butler J that, in circumstances where the plaintiffs had established that there was a fair question to be tried in the proceedings brought by them, the balance of convenience in the sense of minimising any potential injustice in circumstances where the legal rights of the parties had yet to be determined lay in favour of granting the plaintiffs interlocutory relief pending the trial of the action.
Butler J proposed granting orders in terms of paragraphs 1, 5 and 6 of the notice of motion. She regarded the reliefs at paragraphs 2, 3 and 4 as unnecessary since all of the matters addressed in those paragraphs (attempting to sell, holding themselves out as having an entitlement to sell or to possession of the premises and making contact with prospective purchasers) were covered by the injunction on taking any steps pursuant to the purported appointment as receiver over the property. She would hear the parties if necessary on the form of the order.
Relief granted.
Between 2007 and 2010 the first plaintiff (“the plaintiff”) entered into a series of loan facility agreements with the Ulster Bank. The loans advanced were secured by way of a charge created by a mortgage dated 29th November 2007 over two properties, namely no. 2 and no. 4 Upper Eden Road, Glenageary, Co. Dublin which was described in the deed creating the mortgage, collectively, as “the Mortgaged Property”. By Global Deeds of Transfer in February 2015 and February 2016 the Ulster Bank transferred its interests in the loan facility and the charge over the Mortgaged Property to the second defendant (“Promontoria”).
It is undisputed that at the time of this application the plaintiff remained indebted to a significant extent to Promontoria on foot of these loans, although the precise extent of her indebtedness appears to be a matter in dispute between the parties. Consequently, in circumstances where the secured liabilities had become payable by the plaintiff to Promontoria on 10th January 2019, Promontoria appointed the first defendant as a receiver over property identified in the Schedule to the deed of appointment. That property is expressly stated to be “a portion of the Mortgaged Property” and is identified in the Schedule as being the premises at no. 2 Upper Eden Road. As will be seen, issue is taken with the manner in which the first defendant accepted that appointment in that he has expressly agreed to act as a receiver “of the Mortgaged Property in accordance with the terms of this deed of appointment”.
The application now made to the court arises in circumstances where following an exchange of correspondence, the solicitors on behalf of the plaintiff sought to establish the legal basis for the appointment of a receiver and the solicitors on behalf of the defendants sought certain information including copies of all leases applicable to the premises. The defendants also sought access to the property for the purposes of carrying out an inspection to obtain a BER certificate and a Property Summary Report.
On the 12th September 2019, the defendants' solicitor wrote to the plaintiff's solicitor seeking confirmation that the plaintiff would allow the defendants' agent to access the property for the purposes of carrying out an inspection on Saturday 14th September 2019. The plaintiff's solicitor replied expressly refusing such access and advising that if any attempt was made to access the premises the plaintiff would regard it as a criminal act and call An Garda Siochána. In the event, the defendants' agents did attempt to access the premises on the morning of Saturday 14th September 2019, whereupon An Garda Siochána were called and attended at the scene. In circumstances where access was denied, the defendants' solicitor advised in a letter dated 17th September 2019 that the defendants would attend the property when the business was closed, and seek to take possession without further notice to the plaintiff. The plaintiff's solicitor, by letter dated 18th September 2019, identified the existence of a legal dispute between the parties and sought a series of undertakings from the defendants to the effect that they would neither seek to take possession of the premises nor act on foot of the receivership in any way.
In light of this correspondence, the plaintiffs instituted proceedings on the 20th September seeking a series of permanent injunctions against the defendants; an order declaring the appointment of the receiver invalid and orders directing accounts of the sums due under the loan facilities and in particular of an adjustment to the loan balance dated 7th February 2017. The plaintiffs also sought interim injunctions in similar terms. When the matter was returned to the High Court the defendants offered an undertaking to refrain from taking possession of or accessing the premises at no. 2 Upper Eden Road pending the return date for the plaintiffs' motion seeking injunctive relief. That motion was issued on 24th September 2019 and is the application currently before the court.
No. 2 Upper Eden Road is a commercial property in which the plaintiff and the second plaintiff (“the company”) run the business of a crèche. The precise role of the company in the business is unclear in circumstances where the plaintiff has exhibited a certificate from Tusla, the Child and Family Agency, identifying the plaintiff in her personal capacity as both the registered proprietor of the business and as the “person in charge”. The court is advised that some 55 children attend this crèche which employs sixteen members of staff.
Clause 10 of the mortgage deed contains a prohibition on the mortgagor (i.e. the plaintiff) leasing the mortgaged property without the written consent of the bank. Notwithstanding this prohibition, on the 10th July 2010, the plaintiff leased no. 2 Upper Eden Road for a period of 25 years to an entity described as “The Magic Roundabout Ltd.” being a company through which at that time the plaintiff ran her crèche business. As it happens, it appears that that company was not incorporated until the 30th August 2010 and therefore it did not exist at the time it purportedly entered into the lease. Indeed, when that company was incorporated it was under a different name, namely The Magic Roundabout Crèche and Montessori Ltd.
The consent of the Ulster Bank to the creation of this lease was neither sought nor granted. However, the plaintiff in her affidavit avers to the fact that the Ulster Bank and subsequently Promontoria were aware of the lease and she exhibits correspondence addressed to her “care of The Magic Roundabout Ltd” from Ulster Bank and also correspondence seeking management information in relation to the Magic Roundabout. She also avers that the Magic Roundabout paid rent directly to the Ulster Bank and later directly to Promontoria although no evidence is exhibited to support this averment.
The plaintiff in her affidavit of 20th September 2019 explains that in 2014 she incorporated another company, the second plaintiff (“the company”) Beautiful Minds Crèche and Montessori Ltd. to run her crèche business and that in early 2017 the Magic Roundabout Crèche and Montessori Ltd. assigned the 2010 lease of no. 2 Upper Eden Road to the company.
Notwithstanding the assignment of the unexpired residue of the 25-year lease, in 2017 the plaintiff and her husband granted a 15-year lease to the company at an annual rent of €66,000 (“the...
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Thompson v Tennant
...granted by the court against the defendants, Mr Tennant and Promontoria (Aran) Ltd, in a judgment delivered on 12th November, 2020 ([2020] IEHC 594). The plaintiffs sought an order for costs pursuant to O. 99, r. 3(1) of the Rules of the Superior Courts and s. 169(1) of the Legal Services R......