Wallace v Davey

 
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[2017] IEHC 455

THE HIGH COURT

Murphy Deirdre J.

[2014 No. 5323 P]

BETWEEN
KIERAN WALLACE

AND

MARK ETHERINGTON
PLAINTIFFS
AND
FRANCIS DAVEY
DEFENDANT

Banking & Finance – Non-payment of debt – Appointment of receiver – Validity of appointment of receiver – Effect of invalidity of facility letter on deed of mortgage – Deed of transfer and novation

JUDGMENT of Ms. Justice Murphy delivered on the 16th day of May, 2017.
1

The plaintiffs are receivers, initially appointed by Ulster Bank Ireland Limited and now acting on behalf of Promontoria (Aran) Limited in respect of certain properties mortgaged to Ulster Bank Ireland Limited and subsequently transferred to Promontoria (Aran) Limited.

2

The defendant has resisted the receivers since the time of their appointment on 17th September, 2013. At first he claimed that because he had proceedings extant against Ulster Bank Ireland Limited, that acted as a bar to the receivers. In these proceedings, the defendant has resisted the actions of the receivers on the grounds that a deficiency in a facility letter dated 28th May, 2007 invalidates their appointment and/or on the grounds that the transfer of the ownership of the security and loans by Ulster Bank Ireland Limited to Promontoria (Aran) Limited in the course of the proceedings was not properly exercised such as to preserve the rights of the receivers to act.

3

The plaintiffs claim various reliefs restraining the defendant from impeding the receivership and mandatory orders directing him to comply with requests of the receivers.

Background
4

The defendant, Mr. Davey was at all material times, a client of Ulster Bank Ireland Limited. The plaintiffs in the action are receivers, appointed by Ulster Bank Ireland on 17th September, 2013 on foot of mortgages entered into by the defendant with Ulster Bank Ireland Limited. The secured properties in issue are as follows:-

(1) 335 Blackhorse Avenue - date of mortgage: 30th January, 2008 (mortgage registered on 1st February, 2008)

ALL THAT AND THOSE the premises and hereditaments known as 335 Blackhorse Avenue, Dublin 7 being the property more particularly described in Folio DN33169F of the Register of Freeholders County Dublin

(2) Apartment 45, The Steeples - date of mortgage: 15th January, 2008 (registered on 12th May, 2008)

ALL THAT AND THOSE the premises and hereditaments known as Apartment 45 The Steeples, Dublin Road, Navan, Co. Meath together with car parking space number 45 The Steeples, Dublin Road, Navan, Co Meath more particularly described in Folio 47833F of the Register of Freeholders County Meath

(3) Units 1-7 The Mall - date of mortgage: 30th January, 2008

ALL THAT AND THOSE the hereditaments and premises situate in the town of Kilcock, Barony of Ikeathy and Oughterany and County of Kildare being premises more particularly described and outlined in red on the Map annexed to the Deed of Conveyance and Assignment dated the 21st November, 1985, and made between Anne Doherty as Administratrix of the Estate of William Anthony Hegarty deceased of the First Part and David Cox as Administrator of Estate of Louis Ryan Hannan deceased, Catheryn F. Hughes deceased, Edward G. Gleeson, James Ryan and Richard Ryan as Executors in the Estate of James R. Ryan deceased of the second part and the Borrower of the third part

(4) The Canal Turn Pub (‘Davey's Pub’) - date of mortgage: 13th May, 2004 (registered 26th August, 2004)

ALL THAT AND THOSE the licensed premises known as The Canal Turn, Bridge Street, Kilcock, County Kildare, being the property described in 19540F of the Register of Freeholders, County Kildare

(5) Niles House - date of mortgage: 29th January, 2007

ALL THAT AND THOSE the piece or plot of ground with the premises and out offices thereon situate at Bridge Street in the Town of Kilcock, Parish of Kilcock, Barony of Ikeathy and Oughterany and County of Kildare held in fee simple

(6) Frasier House - date of mortgage: 16th October, 2007 (registered on 21st July, 2008)

ALL THAT AND THOSE the hereditaments and premises situate at Bridge Street in the town of Kilcock, Barony of Ikeathy and Oughterany and County of Kildare, shown outlined in red on the map attached to Indenture of Conveyance made 13 July 2001 and made between David Cox, James Ryan and Richard Ryan of the one part and the Borrower of the other part held in fee simple, being the premises now comprised in Folio 59542F of the Register of Freeholders County Kildare

5

As already stated, the defendant has resisted the actions of the receivers on the grounds that a deficiency in a facility letter dated 28th May, 2007 invalidates their appointment and/or on the grounds that the transfer of the ownership of the security and loans by Ulster Bank Ireland Limited to Promontoria (Aran) Limited in the course of the proceedings was not properly exercised such as to preserve the rights of the receivers to act.

6

Mr. Davey, whose main business appears to be auctioneering, obtained facilities from Ulster Bank Ireland Limited between 2002 and 2009.

7

By 26th March, 2013, €5,149,481.45 was due and owing under a facility letter of 6th August, 2009. Ulster Bank Ireland Limited issued letters of demand on 26th March, 2013 and 2nd May, 2013.

8

Mr. Davey's immediate response to the letters of demand was to issue proceedings against Ulster Bank Group Ireland Limited on 13th May, 2013 (2013/4745P) in which he claimed damages for breach of contract; damages for failure to allow him exercise his right of redemption; damages for libel and slander; damages for breach of trust; and damages for nervous shock. Those proceedings were ultimately served on Ulster Bank Ireland Limited in October, 2013.

9

On 17th September, 2013, Ulster Bank Ireland Limited appointed the plaintiffs as receivers over each of the secured properties by deeds of appointment. The receivers accepted each of the appointments on 23rd September, 2013. In these proceedings, the defendant has taken no issue with the deeds of appointment or the execution thereof but contends that the appointment is otherwise invalid.

10

Between 24th September, 2013 and 11th November, 2013, the receivers sent letters to the tenants of the mortgaged properties informing them of the receivership.

11

Immediately upon his appointment on 23rd September, 2013, Mr. Etherington attempted to contact Mr. Davey by telephone and by letter of the same date he informed Mr. Davey of his appointment along with Kieran Wallace as joint receivers over the six secured properties and enclosing copies of the deeds of appointment. On 24th September, 2013, Mr. Etherington travelled to Kilcock, Co. Kildare to attend at the Canal Turn Pub/Davey's Pub and again attempted to contact Mr. Davey without success. By email dated 26th September, 2013, Mr. Etherington wrote to Mr. Davey advising of his acceptance of his appointment as joint receiver on 23rd September, 2013 and informing Mr. Davey that he had written to the tenants advising them of his appointment. He sought a meeting with Mr. Davey.

12

On 26th September, 2013, Mr. Davey responded by email asking Mr. Etherington under what legal authority he had a right to interfere with his property. He stated that he would be opposing any such interference.

13

On 27th September, 2013, AMOSS solicitors, on behalf of the receivers, replied to Mr. Davey's email. They indicated that they were satisfied that the deeds of appointment dated 17th September, 2013 and accepted by their clients on 23rd September, 2013 validly appointed their clients as receivers over the properties. Accordingly, their clients would continue to act as lawfully appointed receivers unless and until they were discharged by Ulster Bank Ireland Limited. Copies of the deeds of appointment were enclosed.

14

By letter also dated 27th September, 2013, Mr. Davey replied to the receivers demanding they withdraw alleged defamatory letters which they had sent to his tenants and calling upon them to immediately desist from any further defamatory action. Mr. Davey further indicated that he expected a proposal within 14 days to compensate him for the alleged defamation. Mr. Davey stated that he would have no option but to bring the matter before the courts if the receivers failed to comply. AMOSS solicitors, on behalf of the receivers, replied to the defendant's letter of 27th September, 2013, rejecting Mr. Davey's allegation of defamation and insisting that they had been validly appointed as receivers and would continue to act as lawfully appointed receivers. They stated that there was no basis for suggesting that their clients could be in contempt of court, there being no court orders in being directing their clients to desist from their functions as receivers over the properties. They again stated that their clients had been validly appointed.

15

On 1st October, 2013, Mr. Davey wrote to Ulster Bank seeking various documentation and details relating to his mortgages and facilities. Mr. Davey repeated his opposition to the appointment of the receivers.

16

By letter dated 8th October, 2013, Mr. Davey wrote to AMOSS solicitors informing them that he had issued a High Court plenary summons against Ulster Bank dated 13th May, 2013. He asserted that this acted as...

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