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You are here: BAILII >> Databases >> Irish Court of Appeal >> Bank of Ireland & anor -v- O'Donnell & anor [2015] IECA 73 (15 April 2015)
URL: http://www.bailii.org/ie/cases/IECA/2015/CA73.html
Cite as: [2015] IECA 73
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Judgment
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THE COURT OF APPEAL Neutral Citation Number: [2015] IECA 73
APPEAL NO. 123/2015 Finlay Geoghegan J. Peart J. Irvine J. BETWEEN THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND AND TOM KAVANAGH PLAINTIFFS/RESPONDENTS AND BRIAN O’DONNELL AND MARY PATRICIA O’DONNELL DEFENDANTS/APPELLANTS JUDGMENT of the Court delivered on the 15th day of April 2015 1. This appeal demonstrates, once again, the very difficult situation in which a family may find itself where a decision was made to give security over their home to a bank in relation to significant borrowings. Such situations are understandably a cause of great emotional upset and distress for the families concerned. 2. The appellants, Mr. and Mrs. O’Donnell, appeared in person. Mr. O’Donnell, a former experienced commercial solicitor, made oral submissions in addition to the written submissions filed on behalf of the appellants. Mrs. O’Donnell appeared and informed the Court that she wished to pursue the appeal and rely upon the submissions made by her husband. 3. The respondents, to whom the Court will refer individually as “the Bank” and “the Receiver” respectively, were jointly represented by solicitor and counsel. 4. The appeal is against an order made on 12th March 2015, by the High Court (McGovern J.) granting an interlocutory injunction restraining the appellants, their servants and/or agents or any other person acting on their behalf, or having notice of the making of the order from trespassing, interfering with, entering upon or otherwise attending at the property known as ‘Gorse Hill’; an order directing the appellants and others to vacate Gorse Hill and other interlocutory orders restraining the same persons from impeding or obstructing the Receiver, and directing the appellants and others deliver up to the Receiver any keys, alarm codes and/or other security and access devices. The appellants also appeal against prior rulings of the High Court judge in relation to the same motion. 5. The members of the Court are in agreement on all issues in the appeal and have determined to deliver a single judgment of the Court. Background and Prior Proceedings 7. Similarly the Court is not concerned to decide any legal issue in dispute in the proceedings. In the course of the appeal, the appellants submitted that certain prior determinations made by the High Court and the Supreme Court in the related proceedings, to which they were not parties, are not binding on them. Insofar as the Court refers to those determinations in the course of this judgment, the Court is not making any decision on that objection. That will be a matter for the full hearing of the proceedings. The facts or legal issues as determined in those proceedings, where relevant to issues in this appeal do, however, represent the current status quo. 8. The principal relevant judgment is the single judgment delivered by Laffoy J. in the Supreme Court, 19th December, 2014 (with which all other members of the Court agreed) in proceedings between Alexandra O’Donnell, Blaise O’Donnell, Blake O’Donnell and Bruce O’Donnell (“the O’Donnell Children”) and the Bank, BOIPB and the Receiver [2012 No. 7554P] (“Gorse Hill proceedings”). As appears therefrom, commencing about 1997, the appellants put in place a complex legal structure for the purchase and development of two separate parcels of land which together became known as Gorse Hill and its use as a home for their family. They used, for that purpose, an Isle of Man company, Vico Ltd. 9. In about 2000, the appellants demolished the original house on Gorse Hill and redeveloped it as a residential property. The appellants and their four children lived there until December 2011, when the appellants moved to England and the children remained living in the house. The property at Gorse Hill was acquired in two tranches; one a purchase of unregistered land and one of registered land. 10. It was held by Laffoy J., that by 2006, Vico Ltd. was the legal and beneficial owner of all the property comprised in Gorse Hill which was its only asset. 11. It further appears from the judgment of Laffoy J. that in June 2006, Vico Ltd. gave a guarantee and indemnity to the Bank in relation to liabilities of the appellants to the Bank and a separate guarantee and indemnity in relation to liabilities of Hibernia, a company incorporated by the appellants. The maximum then liability of Vico Ltd. to the Bank was €17 million. In June 2006, Vico Ltd. executed a Deed of Mortgage (“the Mortgage”) in favour of the Bank over the unregistered portion of Gorse Hill in respect of its liabilities to the Bank. Also, in June 2006, it executed a Deed of Charge (“the Charge”) in favour of the Bank, charging the registered lands in Gorse Hill with its liabilities to the Bank. There were subsequent guarantees given by Vico Ltd. to the Bank in respect of liabilities of the appellants and companies incorporated by them. It is not necessary to refer to these in detail. 12. The appellants had also, in 1997, as settlors, established a discretionary trust, the proper law of which was to be the Isle of Man and the beneficiaries included their children. There was a corporate trustee, the identity of which changed from time to time. The shares in Vico Ltd. were accepted by the trustee as an addition to the trust fund. The appellants advanced monies to Vico Ltd. in relation to the cost of acquisition and redevelopment of Gorse Hill. Laffoy J., at para. 108 of her judgment, summarised the relationship of the appellants with Vico Ltd. in relation to Gorse Hill as follows:-
(a) that a debtor/creditor relationship exists between Vico Limited, as debtor, and Mr. O'Donnell and Mrs. O'Donnell, as creditors, in relation to the costs of acquisition and re-development of Gorse Hill; and (b) that there was an arrangement between Mr. O'Donnell and Mrs. O'Donnell and Vico Limited under which Mr. O'Donnell and Mrs. O'Donnell and their children would be entitled to reside in Gorse Hill. 13. The above determination by the Supreme Court of an arrangement between Vico Ltd. and the appellants whereby the appellants were allowed by Vico Ltd. to reside in Gorse Hill as their home forms part of the factual status quo relevant to the issues on appeal. 14. Proceedings between the Bank and the appellants and related companies commenced in 2010. Unfortunately, by that date, the appellants and certain companies had defaulted in relation to liabilities to the Bank and it issued summary summons proceedings [2010 No. 6100 S] against them. Contemporaneously, separate summary proceedings were issued against three related companies. Those four sets of proceedings were entered into the Commercial List, and on the second day of the hearing of an application for summary judgment, on 4th March 2011, an agreement in writing (“the Settlement Agreement”) was entered into between the Bank and the appellants and the companies. On consent of the parties, the High Court (Kelly J.) made orders in the summary proceedings on 4th March 2011, that each of the proceedings be adjourned generally with liberty to re-enter for the purpose of enforcing the agreed terms. The appellants and the companies were represented by solicitor and counsel at that time. 15. The Settlement Agreement (exhibited in the High Court in these proceedings) set out in schedule one thereto the then agreed indebtedness of the appellants (jointly and severally) to the Bank in the sum of €69,520,063.69. It also provided staged payments to be made on 31st July 2011, in the sum of €8,500,000 and 31(sic) November 2011, in the sum of €20 million and 31st May, 2012, in the sum of €14 million. It further provided, at para. 3.2, that in default of receipt by the Bank of any of the said payments that the Bank had liberty to re-enter the proceedings, and that upon re-entry the Debtors (i.e the appellants and the defendant companies) shall consent to judgment against them in the respective amounts specified in schedule one and additional interest accrued thereafter. 16. The payment due on 31st July 2011 was not made (nor the payment at the end of November 2011), and the Bank, in December 2011, re-entered the summary proceedings [2010 No. 6100 S] and the High Court (Kelly J.) granted judgment in favour of the Bank against the appellants on 12th December 2011, in the sum of €71,575,991.29 pursuant to the Settlement Agreement together with costs. 17. The Settlement Agreement also contained relevant terms in relation to Gorse Hill to which reference is made below. 18. Mr. and Mrs. O’Donnell appear to have moved to live in England in late 2011. They subsequently sought to be adjudicated as bankrupt in that jurisdiction. That application was opposed by the Bank and this Court was informed during the appeal that ultimately it was determined by the English High Court that, though resident in England, the appellants’ Centre of Main Interest was not in England and the application for adjudication refused. 19. The appellants were adjudicated bankrupt in Ireland on 2nd September 2013 [2479 and 2480] on the petition of the Bank. They appealed that adjudication to the Supreme Court and the appeals were dismissed on 25th February 2015. In November 2014, a motion was issued by Mr. and Mrs. O’Donnell seeking to annul the adjudications pursuant to s. 85C of the Bankruptcy Act 1988. That application remains before the High Court. 20. In the meantime, the Bank, on 18th May 2012, called in the indebtedness of Vico Ltd pursuant to its guarantees and indemnities. The debt was not discharged and the Bank, on 7th June 2012, pursuant to the Mortgage and Charge, appointed the Receiver, Mr. Kavanagh as receiver and manager of the Gorse Hill property. 21. By letter of 8th June 2012, Arthur Cox, as solicitor for the Receiver, wrote to the Secretary of Vico Ltd. informing it of the appointment of the Receiver and stating:-
22. It is common case that the occupants of Gorse Hill, in July 2012, were the O’Donnell children. They were represented by solicitors and there is reference to correspondence from such solicitors in July 2012. On 30th July 2012, the O’Donnell children commenced plenary proceedings [2012 No. 7554 P], (“the Gorse Hill proceedings”), against the Bank, BOIPB and Mr. Kavanagh. They primarily contended that they were beneficially entitled to Gorse Hill, challenged the validity of the mortgage and charge given by Vico Ltd. and denied the entitlement of the Bank and Receiver to possession. They sought a series of reliefs to that effect. The plaintiffs, (the O’Donnell children), were legally represented by solicitor and counsel throughout those proceedings in the High Court and the Supreme Court until after the delivery of judgment by the Supreme Court. 23. In the High Court, following a full hearing of the plenary proceedings, McGovern J., on 31st July, delivered a written judgment in which he determined that the plaintiffs were not entitled to the reliefs sought or any relief. On 12th September 2013, pursuant to the judgment delivered, the High Court (McGovern J) made an order that the plaintiffs (the O’Donnell children) vacate the premises at Gorse Hill by Monday 21st October 2013. 24. The O’Donnell children appealed that order and judgment to the Supreme Court. The Bank and the Receiver agreed to a stay on the High Court order pending the determination of the appeal. On 19th December 2014, Laffoy J. delivered the detailed and extensive judgment, already referred to, with which the other members of the Court agreed. The Supreme Court dismissed the appeal and expressly upheld certain determinations of the High Court. 25. The O’Donnell children discharged their solicitors in January 2015. The matter came before the Supreme Court on 2nd February 2015, on the question of costs and the consequential order to be made. The Supreme Court, having heard Mr. Blake O’Donnell(who is admitted as a Solicitor in England and Wales) who then appeared personally and Counsel for the Bank, BOIPB and the Receiver, made an order for costs, and extended to 12.00 noon on Monday 2nd March 2015 the time and date in the order of the High Court of 12th September 2013, by which the O’Donnell children were required to vacate Gorse Hill. 26. On 19th February 2015, Arthur Cox, on behalf of the Receiver, wrote to each of the O’Donnell children enclosing a copy of the Supreme Court Order and telling them that the Receiver would attend at Gorse hill at 12 noon on 2nd March to take vacant possession of the property and asking that they would be there to hand over the keys. 27. On 25th February 2015, the Supreme Court, in a single judgment of Laffoy J. (with which the other members of the Court agreed), dismissed the appellants’ appeals against the High Court bankruptcy adjudications of each appellant. 28. On 25th February 2015, also, Vico Ltd. and the O’Donnell children issued further plenary proceedings [2015 No. 1553 P] against the Bank, BOIBP, the Receiver and a number of individuals and companies resident in Switzerland and the Isle of Man connected with Vico Ltd. and the Discretionary Trust created in favour of the O’Donnell children by the appellants. The multiple reliefs sought include declarations that the guarantees, indemnities, mortgage and charge granted by Vico Ltd. in respect of borrowings of the appellants are void and orders “overturning” the orders made by High Court on 12th September 2013 and the Supreme Court on 2nd February 2015, requiring the O’Donnell children to vacate Gorse Hill by 2nd March 2015. 29. A motion was also issued on 25th February 2015, in those proceedings by the plaintiffs, returnable for 2pm on 2nd March, seeking interlocutory injunctions effectively restraining the Bank, BOIBP and the Receiver from taking possession of Gorse Hill and also seeking a stay on the order of High Court of 12th September 2013, as varied by the Supreme Court order of 2nd February 2015. It was grounded on affidavits of Mr. Blake O’Donnell and Ms. Blaise O’Donnell. 30. On 27th February 2015, Mr. Brian O’Donnell, the first named appellant, wrote to Arthur Cox claiming a right of residence in Gorse Hill and inter alia stating:-
32. On 2nd March, shortly before 12.00 noon, an email was sent to Arthur Cox with a letter signed by each of the four O’Donnell children stating that they had vacated Gorse Hill. The letter was also stated to be “without prejudice to current and future legal proceedings against the Bank and BOIPB and the injunction listed for hearing at 2.00 pm that day”. The injunction application in proceedings [2015 No. 1553 P] Vico Ltd. & Ors came on before the High Court (McGovern J.) at 2pm on that day. Mr. Blake O’Donnell appeared and in addition to making submissions on the injunction application confirmed to the High Court that his parents were in occupation of Gorse Hill. Further, that notwithstanding he and his siblings had vacated Gorse Hill, he was unable to hand over keys to the Receiver. McGovern J. reserved his decision on the injunction application in the Vico Ltd. and Ors proceedings to the following day. 33. The final factual matter prior to 3rd March, which appears to have heightened tensions between the Bank, Receiver and O’Donnell family, was the participation from 2nd March of members of the so-called ‘New Land League’ or ‘Land League’ at Gorse Hill, and the issuing by them of statements and consequent media attention. 34. On 3rd March, McGovern J. delivered his decision on the interlocutory application in proceedings [2015 No. 155P]. In summary, he refused the application upon the basis that the plaintiffs had not established a fair issue to be tried. That ex tempore judgment was delivered in the presence of Mr. Blake O’Donnell. 35. At the end of the ruling, Counsel for the Bank and Receiver indicated that by reason of the continuing occupation by the appellants of Gorse Hill, proceedings had been prepared and were ready to be issued immediately and he was seeking an early return date for a motion seeking interlocutory injunctions. There was then an exchange between the judge and Mr. Blake O’Donnell in relation to making contact with his father, to which further reference is made below, and a short adjournment granted. 36. Counsel for the Bank and Receiver, at the resumed hearing, made an application for liberty to issue and serve short notice a motion seeking entry of their new proceedings to the Commercial List and interlocutory relief. An order was made giving liberty to issue and serve the motion returnable for Thursday 5th March at 11.00. Orders were also made in relation to the service of the proceedings and motion on the appellants, both by email to an email address used by Mr. O’Donnell, and leaving the documents at the property at Gorse Hill, and in the event that there was no response to an intercom system at the gate, to affix the documents to the entrance gate and notify the defendants by email that they had been so fixed. It was further ordered that the appellants file and serve any replying affidavit by 4.00 pm on Wednesday 4th March 2015. 37. There are two other potentially relevant procedural steps taken by the O’Donnell’s prior to March 2015. On 23rd July 2014, Mr. and Mrs. O’Donnell brought a motion to the Supreme Court seeking leave to extend time to appeal the judgment granted against them by the High Court (Kelly J.) on 12th December 2011, in the summary proceedings. That application was then the subject of the Direction given by the Chief Justice under Article 64.3.1 of the Constitution on 29th October 2015, transferring same to the Court of Appeal. The appellants applied to the Supreme Court pursuant to Article 64.3.3 cancelling the direction given insofar as it applied to their application. On 5th February 2015, the Supreme Court cancelled the direction. The appellants’ motion has not been heard by the Supreme Court. 38. In further High Court proceedings [2012 No. 7293 P] between the Bank, as plaintiff, and Blake O’Donnell, Bruce O’Donnell, Brian O’Donnell and Mary Patricia O’Donnell, as defendants, the defendants appealed on 6th August 2014, against the refusal of the High Court (McGovern J.) on 21st July 2014, to recuse himself from hearing those proceedings. It appears from the transcript of 5th March that such refusal was made in the course of an application by the Bank to re-enter what counsel referred to as “the fraud proceedings”. That appeal was similarly the subject of the Direction by the Chief Justice on 29th October 2014. Upon application made by the defendants/appellants, the Supreme Court, on 5th February, has cancelled the direction insofar as it applies to that appeal. The appeal has not yet been heard by the Supreme Court. Hearing and Rulings 5th March 40. The original documents were produced by the Bank for inspection prior to the hearing on 5th March, and were also produced to this Court. 41. During the hearing on 5th March, the following rulings were made which are the subject of appeal to this Court:
2. The refusal of the application for an adjournment. 3. The decision to admit the proceedings to the Commercial List pursuant to O. 63A, r. 1(b) of the Rules of the Superior Courts. 43. For the sake of clarity, the Court is separately considering the appeal against each of the High Court rulings and orders made. Prior to doing so, it is appropriate to consider briefly this Court’s jurisdiction on the appeal. Jurisdiction of Court of Appeal 45. The approach to be taken by the Court of Appeal on an appeal against a discretionary order made by the High Court has recently been considered in a judgment of the Court, Collins v. Minister for Justice, Equality and Law Reform and Others [2015] IECA 27. That judgment relates to an appeal from an order of the High Court dismissing proceedings by reason of inordinate or inexcusable delay and considered prior decisions of the Supreme Court indicating that the High Court decision should only be interfered with where an error of principle was disclosed. The conclusion reached was that whilst the Court of Appeal will pay great weight to the views of a trial judge, the ultimate decision is one for the appellate Court, untrammelled by any a priori rule that would restrict the scope of the appeal to interfere with the decision of the High Court. 46. The Court of Appeal, in the judgment in Collins, also referred with approval to what was stated by Geoghegan J. in the Supreme Court in Desmond v. MGM Limited [2008] IESC 56, 2009 1 IR 737 at 742, 743:
Failure of High Court Judge to Recuse Himself 49. Similarly, at the commencement of the hearing on 5th March, Mr. O’Donnell asked the High Court judge to recuse himself. This Court has had available to it the transcript of the hearing of 5th March. The application was pursued upon the grounds of objective bias. Mr. O’Donnell made no allegation of, or request that the High Court judge disqualify himself on the grounds of, actual or subjective bias. The application was in addition to the alleged financial connection with the respondents based upon certain remarks made by the judge to Mr Blake O’Donnell at the hearing on 3rd March. 50. Before this Court on appeal, the appellants similarly submitted that the High Court judge ought to have disqualified himself upon the basis of objective bias alone. 51. Whilst this Court was referred to a number of authorities, there was no real dispute between the parties, either in the High Court or in this Court as to the appropriate test to be applied in this jurisdiction. It is, as set out by the Supreme Court in Bula Ltd. v. Tara Mines Ltd. (No. 6) [2000] 4 I.R. 412, and again applied by the Supreme Court and explained further in Kenny v. Trinity College Dublin [2008] 2 IR 40. 52. In Bula Ltd. v. Tara Mines, a case in which objective bias was alleged against two judges on the basis of their previous professional engagements as barristers, Denham J. explained the test firstly at p. 441 as follows:-
‘… the correct approach to this application for the recusal of members of this Court is objective and the onus of establishing it rests upon the applicant. The question is whether a reasonable, objective and informed person would on the correct facts reasonably apprehend that the judge has not or will not bring an impartial mind to bear on the adjudication of the case, that is a mind open to persuasion by the evidence and the submissions of counsel. The reasonableness of the apprehension must be assessed in the light of the oath of office taken by the judges to administer justice without fear or favour, and their ability to carry out that oath by reason of their training and experience. It must be assumed that they can disabuse their minds of any irrelevant personal beliefs or predispositions. They must take into account the fact that they have a duty to sit in any case in which they are not obliged to recuse themselves. At the same time, it must never be forgotten that an impartial judge is a fundamental prerequisite for a fair trial and a judicial officer should not hesitate to recuse herself or himself if there are reasonable grounds on the part of a litigant for apprehending that the judicial officer, for whatever reasons, was not or will not be impartial’.”
56. As appears, the objective test is applied to the hypothetical reasonable person who has knowledge of all the correct facts. The relevant facts herein are in two parts. Firstly, in relation to the comment of the High Court judge to Mr. Blake O’Donnell at the hearing on 3rd March that it could be done “the easy way or the hard way”, there is no dispute about the relevant facts. The transcript of the hearing on 3rd March was made available to this Court, as is the transcript of the hearing on 5th March. This Court has considered both and noted the full explanation given by the High Court judge to Mr. O’Donnell at the hearing of 5th March of the context in which the comment was made and acceptance by Mr. O’Donnell that it was “a reasonable explanation”. 57. No objection was made, in the Court’s view correctly, to the High Court judge by reason of his judgments and rulings in any of the prior related proceedings including the judgment on the interlocutory application delivered on 3rd March 2015 in the Vico Ltd. & Ors new plenary proceedings. See inter alia judgment of Court of Appeal of England and Wales in Locabail (UK) Ltd. v. Bayfield Properties Ltd. & Ors. [2000] QB 451 at para. 25 and authorities referred to therein. Nevertheless the full background facts including the prior related proceedings and decisions made therein are also relevant. 58. This Court considers that applying the objective test, a reasonable person, who is an independent observer and not over-sensitive with knowledge of the full facts of the exchanges between the High Court judge and Mr. Blake O’Donnell on 3rd March, and the further exchanges between the High Court judge and Mr. Brian O’Donnell on 5th March, and the full background facts to these proceedings would not have a reasonable apprehension that the appellants would not have a fair hearing from an impartial judge on the issues arising on the motion brought by the respondents before the High Court on 5th March. 59. The application that the High Court judge recuse himself by reason of the alleged “complex financial and business relationship” primarily through his wife with the Bank and Receiver was made upon the basis, principally, of facts learnt by Mr. O’Donnell from newspaper reports of proceedings between the judge’s wife and other of her siblings in relation to a partnership known as the ‘Ryan Partnership’. In the course of the hearing, the judge clarified certain relevant factual misunderstandings of Mr. O’Donnell and identified the correct facts in relation to financial or commercial connections between the judge and his wife with the Bank or the Receiver as being:
(ii) His wife was a party to the litigation between her siblings relating to the Ryan Partnership. The Bank was not a party to that litigation. The Ryan Partnership had previously borrowings from the Bank. Those borrowings had been discharged. His wife, as a member of the Ryan Partnership, was not now indebted to the Bank. (iii) In the course of the litigation between the Ryan siblings concerning the Ryan Partnership, a receiver had been appointed. He was not appointed by the Bank. He is Mr. Ken Fennell who is a partner of Mr. Tom Kavanagh. In that litigation, an application was made by his wife and other members of the Partnership on a motion in the existing proceedings seeking directions from the High Court to the receiver to complete the receivership and challenging the fees of the receiver and his solicitor which were being sought to be approved by the Court. That application had been dealt with and the fees reduced. (iv) The High Court judge did not know Mr. and Mrs. O’Donnell, any of the witnesses who gave evidence for the Bank or for the O’Donnell children in the previous proceedings or Mr. Fennell or Mr. Kavanagh. 61. In the High Court Mr O’Donnell had averred in his affidavit that the last time he viewed entries in the Land Registry in August 2014 the Bank held a mortgage on an identified apartment in Mount Merrion (without expressly saying that it was owned by the judge and his wife). The High Court judge in his ruling does not refer to this averment but did state “they [the appellants] seem to be under a misapprehension that my wife and I have outstanding mortgages or loans with the Bank of Ireland which is also not the case . . .”. On the appeal, Mr. O’Donnell produced to the Court an updated Land Registry search as at 20th March 2015, which records a mortgage created on 11th June 1999 by the High Court judge and his wife in favour of the Bank of Ireland over the same apartment in Mount Merrion. The search result does not record it as having been vacated or satisfied. The fact that there is no registration of a satisfaction does not establish that there remain any monies outstanding from the High Court judge and his wife to the Bank secured by the mortgage. This Court accepts the facts, as stated by the High Court judge, that he and his wife did not have, at the time of this application before him, any outstanding borrowings or loans or mortgages (in the sense of a mortgage upon which there was an indebtedness) to the Bank. However, in the interests of justice, it is appropriate that the Court considers the submissions made on appeal that the High Court judge ought to have recused himself by reason of the financial relationship between himself and his wife and the Bank as including in addition to the above facts an extant mortgage granted by them in favour of the Bank over one apartment. 62. The appellants submitted that the judgment of the High Court (Hogan J.) in Irish Life & Permanent plc. v. Malcolm Duff & Susan Duff [2013] IEHC 43, is authority for the proposition that a judge, prior to hearing a case to which a bank is a party, is bound to disclose any relationship with that bank. The Court does not consider the judgment to be authority for such a proposition nor is it a correct statement of the obligation of a judge in Ireland hearing a case concerning a bank. Ireland is a small country with a relatively small number of commercial banks. As a matter of common sense, all judges have bank accounts and other banking facilities including in many cases a loan secured by a mortgage on their home or other property. The duty of a judge to make disclosure derives from the judge’s obligation to ensure a hearing by an impartial court. Both duties must be considered in the context of the declaration made by every judge in the terms set out in Article 34.5.1 of the Constitution. In Bula Ltd. v Tara already referred to, Denham J having earlier referred to the declaration pursuant to Article 34.5.1 put it thus at p.460:
65. The appellants also drew the Court’s attention to the judgment of the Court of Human Rights in Sigurdsson v. Iceland (No. 39731/98) delivered on 10th April 2003. On the facts in that case, the Court of Human Rights held that there had been a violation of Article 6, para. 1 of the European Convention on Human Rights by reason of the failure of an Icelandic judge to recuse herself from adjudicating upon a case concerning the National Bank in 1997. However, the facts in Sigurdsson are wholly different to the facts pertaining to the High Court judge and his wife and the Bank and Receiver. 66. In Sigurdsson, the facts were that the judge was a member of the Supreme Court of Iceland. In the year preceding the hearing of an appeal between the applicant and the National Bank, the judge’s husband had come under significant financial pressure in relation to the debts of a third party which he had guaranteed. At the conclusion of protracted negotiations, the National Bank relinquished 75% of the debt owed by him to it. In order to secure the settlement and enable her husband honour his obligations, the judge made available two of her properties which were used to raise the funds necessary to cover the settlement. 67. On those facts, the Court of Human Rights concluded that there was at least the appearance of a link between the steps taken by the judge in favour of her husband and the advantages he obtained from the National Bank. It further concluded that the judge’s involvement in the debt settlement, the favours received by her husband and his links to the National Bank were of such a nature and amplitude and were so close in time to the Supreme Court’s examination of the case that the applicant could entertain reasonable fears that it lacked the requisite impartiality. 68. On the facts herein there is no evidence of any advantage obtained by the judge’s wife from the Bank as a member of the Ryan partnership. Mr O’Donnell on 5th March expressly queried the judge as to whether there was “an arrangement” between the Bank and the partnership to which the judge responded “No arrangement was reached . . . The Bank was paid whatever was due to them as I understand it.”. 69. The Court has considered carefully the full submissions made by the appellants, both in writing and in oral submission, on the failure of the High Court judge to recuse himself. The Court has applied the objective test to the full correct facts, including the fact that there remains a mortgage in favour of the Bank registered against a property owned by the judge and his wife, and has concluded that the hypothetical reasonable person, an independent observer who is not over-sensitive and who has full knowledge of all such facts would not have had a reasonable apprehension that the appellants would not have had a fair hearing from an impartial judge, being McGovern J., on the hearing of the respondents’ motion returnable before him on 5th March 2015. Accordingly, the Court dismisses the appeal against the failure of the High Court judge to recuse himself. The Refusal of the Application for an Adjournment 71. The appellants submit that the timeframe imposed by the judge on 3rd March, and the refusal of the adjournment application was in breach of their constitutional rights to fair procedures and Article 6.1 of the European Convention on Human Rights and Fundamental Freedoms. The appellants seek to have the entire of the orders made on 5th March, including the interlocutory injunction, set aside on that basis. 72. It is not disputed that the High Court pursuant to O. 52, r. 6 and O. 107, r. 7 of the Rules of the Superior Courts has jurisdiction to abridge time, or as it is put, give special leave for short service of a motion. However, the exercise of such discretion must be in accordance with the principles of constitutional justice and fair procedures. The High Court judge was requested by the Bank and Receiver to exercise his discretion to grant a short return date for their interlocutory motion seeking to restrain, as they perceived it, a trespass by the appellants and an alleged interference with the Receiver’s entitlement to obtain vacant possession of the premises at Gorse Hill. The facts pertaining to Gorse Hill and its occupation on 3rd March 2015 were exceptional and unusual and included the history of what had occurred since the Bank appointed the Receiver in June 2012, in particular, the Gorse Hill proceedings brought by the O’Donnell children, culminating in the order of the Supreme Court of 2nd February 2015, which, in substance, required the only persons, who, by that date had claimed an entitlement to be in possession of the premises i.e. the O’Donnell children, to vacate by 12.00 noon on 2nd March 2015; the further proceedings commenced on 25th February 2015 by Vico Ltd. and the O’Donnell children; the motion heard on 2nd March and the ex tempore judgment delivered thereon on 3rd March; the fact that Mr. O’Donnell was a highly experienced lawyer and that notwithstanding the stated intention of the Receiver to go into possession on 1st August 2012 and the prior related proceedings it was not until Friday 27th February that the appellants asserted a right of residence in the premises. There was the additional situation of the presence of members of the Land League or New Land League. The judge was informed by Mr. Blake O’Donnell at the hearing on 3rd March, in relation to this that he had spoken to his father who had invited “some of his friends who are in the Land League to come to the property to protest”. 73. The issue for this Court is whether the High Court, in all those circumstances in fixing 5th March 2015 as the return date for the motion, requiring the appellants to adhere to the specified time limit for the filing of an affidavit and refusing the adjournment, acted in breach of their constitutional rights. 74. The appellants did file an affidavit of Mr. O’Donnell within the timeframe. In his affidavit to this Court, he avers that were he not an experienced solicitor, he would not have been able to meet the deadline. The High Court judge was aware that he was such an experienced solicitor. In making the application for the adjournment, Mr. O’Donnell did not identify any further evidence which he wished to put before the Court and had not been able to do within the timeframe for the affidavit. 75. The appellants before this Court filed further affidavits and have made extensive written and oral submissions. Whilst they have amplified certain of the facts and submissions previously made, they have not identified any significant new relevant facts which, by reason of the timescale imposed, they were unable to put before the High Court. Similarly, whilst additional submissions were made relevant to the appeal, again, they have not identified any submission they might have wished to make to the High Court judge if an adjournment were granted but which they were unable to make to him on 5th March. 76. For those reasons, the Court has concluded that the High Court judge, in granting short service and giving the directions for the replying affidavit on 3rd March, and refusing the adjournment application on 5th March, in all the relevant circumstances in which these proceedings and the motion were commenced did not act in breach of the appellants’ rights to constitutional justice and fair procedures. Such rights encompass any rights which might be asserted under Article 6.1 of the European Convention. Admission to the Commercial List
79. The appellants appeal primarily upon the basis that the purpose of the proceedings is to seek orders that they vacate and yield up possession of what is a family home; that there was a delay in commencing proceedings against the appellants since 2012, and that the appellants were self-represented. As indicated at the outset of this judgment, the decision of the judge in charge of the Commercial List to admit a case pursuant the discretion given him by O. 63A, r. 1(b) is a decision with which this Court would be slow to interfere unless the appellant clearly demonstrates an injustice or error of law in the exercise of the discretion. On the facts pertaining to these proceedings, the Court is not so satisfied. The proceedings have a commercial aspect for the reasons stated by the trial judge, there was no delay by the respondents as the first assertion of a right of residence by the appellants was on 27th February 2015, and the fact that they are self-represented is not a reason of itself not to admit to the Commercial List. It is a matter taken into account in the subsequent case management directions in the Commercial List. Whilst the proceedings undoubtedly relate to the home of their family, the property was given pursuant to arrangements made by the appellants as security for commercial borrowings. Refusal of Leave to Cross-Examine Deponents 81. The High Court judge’s attention was drawn to the following passage from Delaney & McGrath ‘Civil Procedure in the Superior Courts’, 3rd Ed. at para. 20-87, where the authors state in relation to interlocutory applications:
83. Mr. O’Donnell, in his replying affidavit before the High Court sworn on 4th March 2015, set out five matters upon which he required to cross-examine Mr. Kavanagh. In addition, he disputed certain of the averments made by Mr. O’Connor in his grounding affidavit. 84. The Court has considered those matters and the 22 matters listed in the appellants’ submissions to this Court upon which it is contended the appellants were entitled to cross-examine Mr. O’Connor and the Receiver before the High Court. 85. The Court considers that the High Court judge was entitled, in the exercise of his discretion, to refuse cross-examination upon the basis he did, namely, that it was not necessary for him to determine any disputed fact for the purpose of deciding the plaintiffs’ application for an interlocutory injunction, having regard to the relevant criteria set out by the Supreme Court in Campus Oil v. Minister for Industry and Energy & Ors. (No. 2) [1983] I.R. 88. Accordingly, the Court rejects the appeal against the refusal to allow cross-examination of Mr. O’Connor and the Receiver. Interlocutory Injunction 87. In his written judgment on the application for the interlocutory injunction, the High Court judge firstly applied the test in Campus Oil v. Minister for Industry and Energy and Others (No. 2) [1983] I.R. 88, that “a fair bona fide question has been raised by the person seeking relief”. Applying the test to the application as being one to restrain a trespass, he stated that he was following the approach of Laffoy J. in the High Court in Kavanagh and Lowe v. Lynch and Another [2011] IEHC 348, insofar as she had taken the view that where some of the relief sought in an application for an interlocutory injunction to restrain trespass may be formulated in mandatory terms (such as on order directing the defendants deliver up keys, alarm codes and such like) this relief is ancillary to the primary relief sought which, is in substance prohibitory seeking to restrain the defendant’s trespass that the plaintiff in such case does not have to establish “a strong case” that they are likely to succeed and that the normal Campus Oil principles apply. 88. In doing so, he also referred to the judgment of Keane J. in the High Court in Keating & Co. Limited v. Jervis Shopping Centre Limited [1997] I.R. 512 (cited by Laffoy J in Kavanagh v Lynch)where at p. 518 said:-
‘However, the defendant may put in evidence to seek to establish that he has a right to do what would otherwise be a trespass. Then the court must consider the application of the principles set out in American Cyanamid Co. v. Ethicon Ltd. [1975] AC 396 in relation to the grant or refusal of an interlocutory injunction.’” 90. The High Court judge identified the status quo at the time the plaintiffs sought the interlocutory injunction as being:
(b) The defendants reside in the United Kingdom. (c) On 1st June, 2006, Gorse Hill was offered by Vico Limited as security for the indebtedness of the defendants and companies related to them. (d) By the settlement of 4th March, 2011, the defendants agreed that in the event that the first named plaintiff exercised its security that they would immediately provide vacant possession of the property and cooperate with the first named plaintiff in relation to any sale or disposal of the property. (e) On 12th December, 2011, the first named plaintiff recovered judgment against the defendants in the sum of €71,575,991.29 and costs. (f) The second plaintiff was appointed by a deed of appointment dated 7th June, 2012. (g) This Court and the Supreme Court have held that the mortgages and charges are valid and enforceable.” 91. He held that damages would not be an adequate remedy for the plaintiffs by reason of the Bank’s existing judgment against the defendants and that it was seeking to exercise its powers pursuant to the mortgage and charges against the property at Gorse Hill in partial satisfaction of that claim, which the High Court judge took the view that they could only do if they had vacant possession of the property. 92. On the balance of convenience, the High Court judge held:-
94. The grounds of appeal pursued by the appellants may be conveniently grouped and summarised as follows:-
(2) The High Court judge erred in determining that the respondents had discharged the burden of establishing they had a prima facie or strong case in particular by reason of the failure of the Bank to execute the Mortgage and the Charge ; alleged defects in the execution of the appointment of the Receiver and the claimed right of residence. A related ground pursued, was that the High Court judge erred in considering the approach identified by Keane J. in Keating and Co. Limited v. Jervis Shopping Centre Limited was applicable as the respondents’ title was in issue and accordingly, that there was an error in his approach to the burden of proof in relation to the right of residence contended for by the appellants. (3) The High Court judge was in error in his assessment of what constituted the status quo on the application for the injunction. (4) The High Court judge erred in his determination of where the balance of convenience lay. 96. The respondents contested every ground of appeal and submitted that the High Court judge applied the correct legal tests upon the facts before him, correctly identified the status quo, correctly determined that the balance of convenience favoured the respondents and correctly decided that damages would not be an adequate remedy. Decision on Interlocutory Injunction 98. The second interlocutory relief sought by the respondents in their notice of motion (at para 3) is an order by way of interlocutory injunction compelling the appellants and others to vacate the property at Gorse Hill. An order to that effect was made in the High Court order of 12th March. At the date of commencement of these proceedings on 3rd March, the appellants were residing, albeit only from a few days previously, in Gorse Hill. Similar relief is sought at para. 2 of the General Endorsement of Claim and it is in substance the relief sought by the respondents in these proceedings. 99. Vico Ltd. is the owner of the property as held by the Supreme Court. However, as set out at para.12 of this judgment, the Supreme Court, per Laffoy J. at para. 108 of her judgment of 19th December 2014 determined that on the documentary evidence available in the Gorse Hill proceedings, that there was an arrangement between Vico Ltd. and the appellants whereby Vico Ltd. would allow the appellants and their children reside in Gorse Hill. Laffoy J. expressly refers to “an arrangement between Mr. O’Donnell and Mrs. O’Donnell and Vico Ltd. under which Mr. O’Donnell and Mrs. O’Donnell and their children would be entitled to reside in Gorse Hill”. 100. The respondents accept, as they must do, for the purposes of the motion and appeal the arrangement between Vico Ltd. and the appellants identified by Laffoy J. at para. 108 of her judgment. However, they submit that the entitlement identified therein is dependent upon the continued entitlement of Vico Ltd. to possession of the Gorse Hill property; that Vico Ltd. is no longer entitled to possession of the property; upon his appointment, the Receiver was entitled to go into possession of the property and that the appellants have not established any entitlement to reside in the property which continues beyond the date upon Vico’s right to possession ceases. These latter submissions are considered in more detail below. The respondents in these proceedings are in substance, seeking orders the the appellants vacate and other consequential restraining and mandatory orders which will enable the Receiver take and retain without interference possession of the Gorse Hill property pursuant to clause 9.4.1 of the Mortgage and the Charge. These provide in so far as relevant:
9.4.1 Take possession: Take immediate possession of, get in and collect the Secured Assets or any part thereof and . . . 102. The Receiver has not yet gone into possession of the property at Gorse Hill. By reason of the Gorse Hill proceedings commenced by the O’Donnell children, the Bank effectively agreed not to seek to go into possession until after the determination of the Supreme Court appeal therein. Following the order of the Supreme Court of 2nd February 2015, the Receiver was to go into possession of the property on the vacation of same by the O’Donnell children by 12.00 noon on 2nd March 2015. 103. Accordingly, it appears to the Court that when the appellants moved back into Gorse Hill at the end of February that as the Receiver had not yet taken possession of Gorse Hill from Vico Ltd. it is at least arguable that they did so pursuant to the prior arrangements with Vico Ltd. It follows, in this Court’s view that the primary relief now being sought by the respondents is mandatory relief to vacate Gorse Hill so as to enable the Receiver go into possession of the property. The other orders are consequential and considered necessary to effectively take and retain possession. 104. The Court has noted from the judgment in Kavanagh & Lowe v. Lynch that the defendants therein were not stated to be residing in the relevant property and there was no order sought requiring them to vacate the property. The Court considers this distinguishes the present application. 105. It follows from this conclusion that as the substance of respondents application for the interlocutory relief sought was mandatory it required to be considered in accordance with what has been referred to a variation of the ‘pure’ Campus Oil test where the courts have required the plaintiff not just to establish a fair or arguable case but rather the higher standard of a strong case in accordance with the Supreme Court judgment of Fennelly J in Maha Lingam. 106. The next issue which the Court must consider, therefore, is whether the respondents have made out a strong case that they are entitled to the relief sought in the proceedings. The principal such relief is the order requiring the appellants to vacate the property at Gorse Hill so that the Receiver may go into possession of the property in accordance with the express right given him under the Mortgage and Charge. The Court accepts that as submitted by the respondents the onus is on the respondents and the approach identified by Keane J. in Keating and Co. Limited v. Jervis Shopping Centre Limited is not applicable on the facts herein. 107. It is important to emphasise that the Court is not determining any issue of fact or law in dispute between the parties in relation to the substantive issues in the proceedings in this judgment. It is only considering and determining whether the respondents have made out a strong case to be entitled to the relief sought. 108. The respondents have, in the Court’s view, established a strong case in favour of the validity and enforceability of the Deeds of Mortgage and Charge of June 2006. They have done so, firstly, by reason of the determinations in judgments of the High Court and Supreme Court in the Gorse Hill proceedings to that effect. Secondly in relation to the objection made by the appellants that the Bank did not execute those documents by reason of the decision of the High Court (Clarke J) in ACC Bank v. Kelly [2011] IEHC 7 to the effect that execution of a mortgage by a mortgagee is not necessary for enforcement. 109. The next issue relates to the validity of the appointment of the Receiver by reason of the nature of the execution of the deeds of appointment. Again, the Court has concluded that the Bank has made out a strong case in favour of the Receiver having been validly appointed pursuant to those documents on 7th June 2012. By reason of the issues raised by the appellants, it is clear that this will continue to be an issue in the substantive proceedings, and accordingly, the Court again emphasises that it is only briefly giving its reasons as to why it considers the respondents have established a strong case in favour of the validity of the appointment of the Receiver and is not determining any of the issues in dispute. 110. The principal reasons for which the Court considers that the Bank has established a strong case on this issue are:
(ii) The evidence of Ms. Nolan and Ms. Coyle that the latter has been employed as Assistant Secretary of the Bank since 2007. (iii) Confirmation of the latter’s signature on the Deeds of Appointment. (iv) The definition of Secretary in the Bylaws of the Bank as last amended on 24th April 2012 and the provisions of Article 113(a) thereof. (v) Clauses 9.1 of the Mortgage and the Charge which permit the Bank to appoint “under seal or under hand of a duly authorised officer or employee of the Bank any person to be Receiver and Manager . . .” and the submissions made in reliance upon the judgments of the High Court and Supreme Court in Kavanagh v. McLoughlin [2013] IEHC 453, and [2015] IESC 27, and the authorities referred to in those judgments. 112. The next issue is whether the Bank has made out a strong case that the Receiver is now entitled to an order that the appellants vacate Gorse Hill. This requires the respondents to establish a strong case that the appellants do not have a right of residence in or a right to reside in the Gorse Hill property which extends beyond the right of Vico Ltd. to possession of the property. Again, this will, as a matter of probability, be a major issue in the substantive proceedings and the Court does not wish to prejudice in any way a full assessment and determination of the issue in the substantive proceedings and is therefore confining itself to setting out its conclusion and stating shortly the reasons for which it has reached that conclusion. 113. The Court has concluded that the respondents have made out a strong case that the appellants do not have a right of residence in or a right to reside in Gorse Hill which extends in time beyond the right of Vico Ltd. to possession of the property. The principal reasons for which the Court has reached that conclusion are:
2. The evidence before the courts in the Gorse Hill proceedings and recorded at paras. 41 and 42 of the judgment of Laffoy J. that in 2006, Mr. O’Donnell was a practising solicitor and partner in the law firm known as Brian O’Donnell & Partners. That firm acted in connection with the taking of the Mortgage and Charge by the Bank in 2006 from Vico Ltd. which did not have separate legal representation. In the course of correspondence in May 2006, Laffoy J. at para. 42 records that “Gartlan Furey (then acting for the Bank) sought confirmation that no person other than Vico Ltd. had made or would make any direct or indirect financial contribution towards the purchase of Gorse Hill or had been or would be the beneficiary of any agreement or arrangement whereby that person had acquired or would acquire any interest in the property or any part thereof. Such confirmation was given in the response”. It would appear that the response was given in a letter dated 18th May 2006 from Brian O’Donnell & Partners and that they were also acting for the appellants herein at that time in connection with the borrowings for which Vico Ltd. was then giving security. 3. The Settlement Agreement entered into by the appellants on 4th March 2011 provides at para. 3.5: “Brian O’Donnell and Mary Pat O’Donnell agree, subject to paragraph 3.4 above, that in the event that the Bank exercises its security in respect of the property at Gorse Hill that they will immediately provide full vacant possession of the property in good repair and condition and cooperate with the Bank in relation to any sale or disposal of this property”. Paragraph 3.4 relates to the Bank’s agreement not to seek to gain possession of Gorse Hill prior to 1st March 2013 or 12 months from the date of breach of the Agreement. The Court is aware that the appellants now contend and allege that the Settlement Agreement was procured by fraud. For the purposes of determining whether the respondents have a strong case, it appears that the Court should have regard to the present status of the Settlement Agreement as a valid and binding agreement. This is particularly so having regard to para. 4.1 thereof in which the appellants acknowledge that they had received independent legal advice from Whitney Moore Solicitors prior to entering into the Agreement and that the precise meaning, effect and obligations arising from the Agreement had been fully explained to them. 4. On 18th July 2012, the appellants became Directors of Vico Ltd. In that capacity, they must have been aware of the stated intention of the Receiver to go into possession of the property on 1st August 2012. They did not procure that Vico Ltd commence proceedings, did not commence proceedings themselves nor joined in the proceedings commenced by their children in July 2012, effectively challenging the validity and enforcement of the Bank’s Mortgage and Charge over Gorse Hill and the Receiver’s entitlement to take possession thereof. 5. The two letters relied upon by the appellants, namely, the letter from the appellants to the then trustee of the Discretionary Trust on 20th October 2000, and a letter from Mr. David A. Harris, a Director of IFG International Ltd. of 18th July 2012, do not constitute credible evidence inconsistent with the case being made by the respondents that the appellants’ right to reside in Gorse Hill does not extend in time beyond the right of Vico Ltd. to possession thereof. 115. On the issue of the adequacy of damages for the appellants if the injunction is granted and the respondents fail at the full hearing, the respondents have given the normal undertaking as to damages. There is no suggestion that they would not be in a position to meet any claim for loss and damage which the appellants might make if the injunction is now granted and the appellant’s were to succeed at the full hearing of the action. 116. These conclusions lead the Court to consider the balance of convenience. The Court considers the balance of convenience favours the upholding of the High Court order granting all the interlocutory injunctions sought including that the appellants vacate Gorse Hill. The Court agrees with the status quo identified by the High Court. The appellants are not the owners of the property. Vico Ltd. is the legal and beneficial owner. Importantly, whilst Gorse Hill is a family home in the sense that when it was acquired it was planned to be the home for the appellants and their children, nevertheless, it has not been the home in which the appellants have resided since the end of 2011. It is common case that the appellants moved to reside in England at that time and have continued to reside in England until they returned at the end of February and made, for the first time, the claim to be entitled to a right of residence in Gorse Hill in their letter of 27th February 2015. During that period, it had been the home of the O’Donnell children, and by order of the Supreme Court of 2nd February 2015, they have been required to vacate the property on 2nd March 2015 and have done so. The appellants are not without a home if the injunction is granted. They have a home in England. In the affidavit sworn in the High Court Mr O’Donnell gives only his English address. In this Court he gives both Gorse Hill and his English home as his address. It is an inevitable inference that the appellants only returned to live in Gorse Hill at the end of February in order to prevent the Receiver taking possession of the property following compliance by their children with the order of the High Court of 12th September 2012 as varied by order of the Supreme Court of 2nd February 2015. 117. The Receiver has been appointed by the Bank since 7th June 2012. In accordance with Clause 9.4.1 of the Mortgage and Charge, as varied by para. 3.4 of the Settlement Agreement, he was entitled to take possession on 1st August 2012. Following the Gorse Hill proceedings commenced by the O’Donnell children, he agreed not to take possession until the determination of those proceedings. In the course of those proceedings, prior to the High Court hearing, there was an application brought on behalf of the children to join additional persons, including Vico Ltd. The application to join Vico Ltd. was not proceeded with. The Bank is owed significant sums for which the Gorse Hill property was given as security pursuant to arrangements made by the appellants. At minimum, if the Receiver takes possession, pending the determination of these proceedings it will be available to rent and provide a rental income which can be applied towards the monies owed to the Bank. Conclusion |