Tyrell v Wright

• Jurisdiction: Ireland
• Judge: Ms. Justice Costello
• Judgment Date: 17 February 2017
• Neutral Citation: [2017] IEHC 92
• Date: 17 February 2017
• Court: High Court
• Docket Number: [2016 No. 9072 P.] [2016 No. 130 COM]

BETWEEN

KEN TYRRELL

PLAINTIFF

AND

DAVID WRIGHT

AND

ROPE WALK CAR PARK LIMITED

DEFENDANTS

[2017] IEHC 92

Costello J.

[2016 No. 9072 P.]

[2016 No. 130 COM]

THE HIGH COURT

Land & Conveyancing – The Land and Law Reform Conveyancing Act 2009 – Possession of properties – Execution of deed of mortgage – Assignment of lease without consent of mortgagee

Facts: The plaintiff/receiver sought an order for the possession of three mortgaged properties. He also sought interlocutory injunction against the defendants for requiring them to surrender the vacant possession of those properties and an order for the vacation of lites pendentes under s. 123 of the Land and Law Reform Conveyancing Act 2009, registered against the said properties. The plaintiff contended that he had secured legal charge over the said properties by way of execution of the deed of mortgage. The first named defendant contended that the plaintiff was estopped from seeking possession of the said properties on the basis of representations made by the plaintiff to the effect that the first named defendant would develop the said properties to realise the maximum value.

Ms. Justice Costello granted the interlocutory injunctions as sought by the plaintiff in relation to all the properties. The Court, however, refused to vacate the lis pendens registered by the partner of the first named defendant in relation to one property while vacating the lis pendens in relation to the other two properties. The Court held that the first named defendant had failed to meet the threshold and could be compensated in damages. The Court found that the correspondence between the bank and the first named defendant showed that there was no representation of any kind made to the first named defendant as asserted by him. The Court held that the first named defendant had assigned the lease of the two properties to his partner without the consent of the bank, which was in contravention of the relevant provision of the deed of mortgage.

JUDGMENT of Ms. Justice Costello delivered on the 17 ^th day of February 2017

1 The plaintiff is the receiver appointed to three properties on 22nd August, 2016. He seeks vacant possession of the three properties with a view to selling the properties. He brought two motions which are for determination by the court. The first seeks interlocutory injunctions against the defendants requiring them to surrender vacant possession of the charged properties. In the second notice of motion, he seeks the vacation of lites pendentes pursuant to s. 123 of the Land and Law Reform Conveyancing Act 2009, registered against the properties by the mother and partner of the first named defendant. The two motions were heard together and this judgment deals with both motions.

The Properties

2 The first named defendant is a builder and developer. His parents, Mr. Michael Wright and Mrs. Bernadette Wright owned certain lands at Summer Cove, Rosslare, Co. Wexford. In 2004, Mr. and Mrs. Wright and the first named defendant decided to develop four houses on these lands. The house which was ultimately developed as 1 Summer Cove (‘ Summer Cove’) was fitted out to a high specification as it was the show house for the remaining houses on the development.

3 The site at Summer Cove comprised Folios 11763 and 142F (part), Co. Wexford and Mr. and Mrs. Wright were registered as full owners. AIB Bank plc had a registered charge over the lands from 2005.

4 By deed of transfer dated 23rdJanuary, 2006, Mr. and Mrs. Wright transferred the freehold interest in the site of No. 1 Summer Cove to the first named defendant in consideration of the sum of €200,000. The deed recited that they acknowledge receipt of this consideration, though it subsequently emerged that the first named defendant and Mrs. Wright agreed, in fact, no such consideration was ever paid.

5 By statutory declaration made on 23rd of January, 2006, Mr. and Mrs. Wright declared: -

‘The property is not subject to any trust, licence or proprietary interest in favour of me this Declarant or any other person or body corporate arising by virtue of any arrangement, agreement or contract entered into by me, or by operation of law or otherwise, or any direct or indirect financial or other contribution to the purchase thereof and the property is held free from encumbrances and no other person is in adverse possession thereof.’

6 In 2006, the first named defendant decided to acquire and develop a property then known as 1B Swan Lake, Chapelizod, Co. Dublin. He proposed to develop two luxury houses on the site to be known as 1A and 1B Swan Lake, Chapelizod, Co. Dublin (‘Swan Lake’). He required substantial finance in order to both acquire and develop the property.

7 On the 3rd November, 2006, the first named defendant accepted a loan facility offered by Anglo Irish Bank Corporation p.l.c. (‘ Anglo’) in the sum of €1,820,000 and comprised of two facilities. The first was to enable a borrower to fund the acquisition of a 0.08 acre site at 1A Chapelizod Road, Islandbridge, Dublin 8 with full planning permission for the construction of two residential units together with stamp duty and associated costs. The facility was also to fund the construction of two residential units on the site and to provide twelve months interest roll up together with equity release in the amount of €100,000. The security was to be a first legal mortgage over Swan Lake together with all work in progress and a first legal mortgage over Summer Cove. The facilities were repayable on demand and without prejudice to the demand nature of the facilities were to be reviewed on or before the 31st October, 2007. The security was to secure all sums due by the first named defendant to Anglo.

8 On the same day he certified that none of the provisions of the Consumer Credit Act 1995 or the European Communities (Unfair Terms and Consumer Contracts) Regulations 1995 applied to the facilities and that he was not a consumer within the meaning of either the Act or the Regulations.

9 On 18th December, 2006, the first named defendant as beneficial owner granted Anglo a first legal mortgage and charge over the premises: -

‘ALL THAT AND THOSE the hereditaments and premises known as ‘Swan Lake’, 1A Chapelizod Road, Islandbridge, Dublin 8 as more particularly described in a deed of conveyance dated 18th December 1984 between Molly Butler of the one part and Andrew Irvine & Bridget Irvine of the other part and delineated on the map annexed thereto and thereon edged red.

ALL THAT AND THOSE the hereditaments and premises known as 1 Summer Cove, Rosslare, County Wexford being part of the property comprised in Folio 11763 and 142F County Wexford as more particularly described in a Deed of Transfer dated 23rd January 2006 between Michael Wright & Bernie Wright of the one part and David Wright of the other part and delineated on the map annexed thereto and thereon edged red and marked with the letter ‘D’.’

10 The mortgage defined ‘encumbrance’ as inter alia ‘any lease agreement’. Clause 6 provided:

‘[T]his deed is security to the bank for the payment by the mortgagor to the bank of all the secured liabilities. The mortgagor is not entitled, without the prior consent of the bank which maybe granted or withheld at the bank's absolute discretion, to create or permit to subsist any encumbrance on or affecting any part of the mortgaged properties’.

Clause 19.1 provided

‘[T]he statutory powers of leasing and accepting surrenders of leases of the mortgaged properties shall not be exercised by the mortgagor without the prior consent in writing of the bank and the mortgagor shall not create or purport to create any lease or tenancy or accept any surrender thereof otherwise than under the said powers.’

Clause 8 provided that upon the occurrence of a termination event the security shall become enforceable. Clause 10 granted the bank the power to appoint a receiver and at Clause 13.5 the first named defendant represented and warranted to the bank that

‘save as disclosed in writing to the bank prior to the execution hereof, there are no encumbrances of any nature or kind affecting all or any part of the mortgaged properties.’

11 On the 18th of December, 2006, the first named defendant made a statutorydeclaration for the benefit of Anglo, its heirs and assigns in respect of Swan Lake that the property was not a family home and that:-

‘the property is not subject to any trust licence tenancy or proprietary interest in favour of [the first named defendant] or of any other person or body corporate arising by virtue of any arrangement, agreement or contract entered into by me, or by operation of law or otherwise, or to any direct or indirect financial or other contribution to the purchase thereof and the property is held free from encumbrances and no person is in adverse possession thereof.’

12 He made an identical statutory declaration in respect of the property on 20th June, 2008, (though the property was described as 1 and 1A Swan Lake).

He made an identical Family Home Protection Act declaration on 18th December, 2006 in respect of Summer Cove for the benefit of Anglo. In addition, on the same day he made a section 72 statutory declaration in respect of Summer Cove stating: -

‘to the best of my knowledge information and belief none of the burdens set out in s. 72 of the Registration of Title Act, 1964, and therein stated to be capable of affecting registered land without registration, affect land in the above mentioned Folios.

That before making this declaration the full effect, meaning and purport of such burdens were explained to me by my solicitor and I understood same.’

13 Anglo advanced the monies to the first named defendant in accordance with the terms of the facility letter of October 2006. He purchased and mortgaged 1A Swan Lake on 18th December, 2006....