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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Declan Taite & Anor v John Philip Quearney [2013] IEHC 405 (04 September 2013)
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Cite as: [2013] IEHC 405
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Judgment Title: Declan Taite & Anor v John Philip Quearney Neutral Citation: [2013] IEHC 405 High Court Record Number: 2013 8682P Date of Delivery: 04/09/2013 Court: High Court Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation: [2013] IEHC 405 THE HIGH COURT [2013 No. 8682P] BETWEEN DECLAN TAITE AND SHARON BARRETT PLAINTIFFS AND
JOHN PHILIP QUEARNEY DEFENDANT Judgment of Ms. Justice Laffoy delivered on 4th day of September, 2013. The proceedings and the plaintiffs’ application
(b) an injunction restraining the defendant or any party on notice of the order from interfering with or otherwise impeding the plaintiffs in the collection of rents from the tenants of any of the properties more specifically described in the schedule thereto.
(ii) No. 41, Mount Symon Green, Clonsilla, Dublin, 15, which is registered on Folio 149221F of the Register of Freeholders, County Dublin; (iii) No. 42, Mount Symon Green, which is registered on Folio 149270F of the Register of Freeholders, County Dublin; (iv) Apartment 105, Erris Square, Waterville, Blanchardstown, Dublin 15, which is registered on Folio 135332L County Dublin; (v) Apartment 111, Erris Square, which is registered on Folio 135977L County Dublin; and (vi) Apartment 112, Erris Square, which is registered on Folio 133871L County Dublin. 2. The plaintiffs have instituted these proceedings against one of the joint owners of the properties, the defendant, solely because he has interfered, and, they believe, intends to continue to interfere, with the exercise by them of their functions as joint receivers. The defendant appeared in person at the hearing, having filed a replying affidavit in person. He made submissions to the Court. The security documentation 4. The security documentation in relation to No. 41, Mount Symon Green discloses the following:
(b) By a deed of mortgage in favour of the Banks dated 14th February, 2007 (the Mortgage Deed), the defendant and Robert Quearney charged No. 41, Mount Symon Green, being all the lands comprised in Folio 149221F of the Register of Freeholders, County Dublin with payment of the Total Debt (as defined) owing to each of the Banks. It is clear from the copy of the Mortgage Deed exhibited that it has been registered as a burden on Folio 149221F of the Register of Freeholders, County Dublin. Clause 4 of the Mortgage Deed provided as follows:
(i) Clause 3.2, which provides:
(a) The Total Debt owing to the Lender (whether demanded or not) shall be deemed to become due within the meaning and for the purposes of the Conveyancing Acts on the execution of the Mortgage. (b) . . . (c) . . . (d) Any Receiver appointed by a Lender under the power to appoint a Receiver shall be deemed to be the agent of the mortgagor and the mortgagor shall be solely responsible for the acts and defaults of such Receiver and for the remuneration . . ..” The expressions “Conveyancing Acts” is defined as meaning the Conveyancing Acts 1881 to 1911 and the Registration of Title Act 1964.
(a) . . . (b) If the mortgagor fails to pay or discharge within three months of the due date any money payable by him or any obligation or liability payable by him from time to time to a Lender . . .. (e) By deed dated 10th July, 2013, the Banks appointed the plaintiffs to be joint receivers over No. 41, Mount Symon Green to the intent that they might exercise all powers conferred on the Banks and on the receivers in relation to that property, whether under the mortgage or by law or otherwise. The deed of appointment was under the seal of each of the Banks. Validity of appointment of plaintiffs as joint receivers 7. I am satisfied that the plaintiffs have been properly appointed as joint receivers over each of the six properties for the following reasons:
(b) Clause 8 identified when the statutory powers conferred on the mortgagees by Clause 7.2 became exercisable. The powers were probably exercisable on 3rd April, 2013 by virtue of the application of Clause 8.1(a), which provided that the powers would be exercisable on the happening of “an event by virtue of which [the mortgagees] become entitled to demand any of the Total Debt”. I say “probably”, as it is not clear from the letters of 3rd April, 2013 for how long the instalments were in arrears. In any event, by 10th July, 2013, the powers were exercisable because the mortgagors had failed to comply with the letter of demand of 3rd April, 2013 for more than three months. (c) One of the powers conferred on the Banks as mortgagees by reference to the Conveyancing Acts, was the power to appoint a receiver by reference to s. 19(1) of the Conveyancing Act 1881 which was in force at the time of the Mortgage Deed and provided: “A mortgagee, where the mortgage is made by deed, shall, by virtue of this Act, have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further (namely): (i) . . . (ii) . . . (iii) A power, when the mortgage money has become due, to appoint a receiver of the income of the mortgaged property, or of any part thereof . . ..” 8. Section 24 of the Act of 1881 contained specific provisions in relation to the appointment, powers, remuneration and duties of receivers. Sub-section (3) provided as follows:
9. The foregoing analysis of the security documents which the Banks hold and the manner in which the plaintiffs were appointed as joint receivers goes further than, perhaps, it is necessary for a court to go on an interlocutory application on which the defendant has not pointed to any specific defect in the Banks’ title or the manner of the appointment of the plaintiffs as joint receivers. The objective in so doing is to demonstrate the true legal position, as disclosed by the evidence before the Court, to the defendant in the hope that he will benefit from it. However, it is important to emphasise that this is an interlocutory application and, if the orders sought by the plaintiffs are granted, they will only operate pending the determination of the substantive proceedings. Further, the Court is not ignoring Lord Diplock’s much quoted dictum in American Cyanamid v. Ethicon [1975] 1 All ER 504, where he stated (at p. 510):
The defendant’s case against Allied Irish Banks plc and its relevance
2. Without disclosure and foreknowledge of their intention this contract is seriously flawed. 3. Due to excessive Securitisation the Banks created the False Boom and Bust situation which has crippled our country. 4. The plaintiff’s claim is also for reckless lending procedures by the Bank who have ignored their own Bank Guidelines which is in breach of the consumer protection code. 5. The plaintiff’s health and relationships have suffered greatly as a result of Allied Irish Banks Plc and its Servants’ actions.” 11. Most of the defendant’s replying affidavit, which was sworn on 19th August, 2013, is concerned with setting out the grievance which the defendant has against Allied Irish Banks Plc, which has led to the Plenary Proceedings. The defendant has exhibited documentation from various sources, including documentation he received from the Chartered Accountants Regulatory Board in connection with complaints which he made, apparently, before 2009, in relation to a firm of Chartered Accountants and Registered Auditors who had acted in the years 2002 to 2004 as accountants and auditors for a company with which the plaintiff had done business in 2004. In 2004 the defendant paid, by way of two bank drafts, the sum of £140,000 Sterling and the sum of £150,000 Sterling to the company in respect of deposits on properties in an intended development in the United Kingdom in which the company was involved. The development did not proceed. In 2006 the defendant and a co-plaintiff brought summary proceedings in the High Court against the company and obtained judgment in 2008. From copies of two Court orders exhibited by the defendant it appears that by 2009 there was due by the company to the defendant and his co-plaintiff in those summary proceedings a balance of approximately €440,264.20. 12. The defendant’s complaint against Allied Irish Banks Plc., as I understand it, arises from the fact that, while the two bank drafts furnished by the defendant to the company, which were dated 30th July, 2004, were lodged to a sterling current account in the name of the company with Allied Irish Banks Plc on 3rd August, 2004, another company (the other company) connected to the company by reason of common directors, had control over the sterling account for its operations and the money lodged to the sterling current account was treated as its money in its financial statements. At the material time, the company and the other company had different auditors. The wrongdoing which the defendant alleges against Allied Irish Banks plc is that it gave details of the sterling account in the company’s name to the auditors of the other company. Obviously, it would be wholly inappropriate for this Court to express any view on whether the defendant has a good cause of action against Allied Irish Banks Plc on the basis of the foregoing, and, in any event, it is utterly impossible to form any view on that issue. However, even if the defendant has a good cause of action and, in due course, recovers damages from Allied Irish Banks Plc which could be set off against his indebtedness to the Banks, as things now stand, having regard to the factual basis of his dispute with Allied Irish Banks Plc as set out in his replying affidavit, there appears to be no connection between the wrong the defendant, as plaintiff in the Plenary Proceedings, alleges against Allied Irish Banks Plc and his alleged consequential loss, on the one hand, and the entitlement of the Banks to enforce their security on the six properties with which the Court is concerned by the appointment of the plaintiffs as receivers, on the other hand. 13. In relation to each of the six properties, the mortgage given by the plaintiff and his co-owner or co-owners to the Banks, which the Court was told by the defendant involved re-financing, was created at a time when the problem in relation to the proposed investments in the United Kingdom had arisen. It is clear from documentation exhibited by the defendant that, in connection with the earliest of the mortgage transactions with the Banks, the transaction in relation to 13, North King Street, the defendant apprised the Banks of the fact that he hoped to get the deposits on the properties in England back and that was consideration in the assessment of the loan application in question. That, however, does not mean that the Banks have any responsibility for the loss incurred by the defendant in relation to the proposed investment in the United Kingdom, so that it is an arguable defence to the entitlement of the plaintiffs to exercise their functions as receivers over the six properties. That issue is for another day. 14. The only other line of defence advanced by the defendant at the hearing related to the status of the plaintiffs exercising their functions as joint receivers as agents of the mortgagors. The defendant asserted that, under the law, a person cannot have an agent forced upon him. The fact is that the defendant executed six mortgages which incorporate the Mortgage Conditions, which expressly stipulate in Clause 7.2(d) that a receiver shall be deemed to be the agent of the mortgagor. The defendant also asserted that the plaintiffs, as joint receivers, owe the mortgagors a duty of care. In that context, there is a certain irony about the defendant’s averment in his replying affidavit that the plaintiffs had just arrived and taken control of his assets and restricted his ability to service his loan and that he had not been supplied by the plaintiffs “with a statement of accounts showing and proving that the tri-party agreement is servicing the Bank better than I can if I was in control of the tenants’ funds”. The reason the defendant is not in control of the tenants’ funds is that, as outlined in each of the letters of demand of 3rd April, 2013, each of the loan accounts was substantially in arrears, from which it is to be inferred that the rents payable by the tenants in the six properties were not being used to service the loans. The irony is that it was in the defendant’s interest to service the loans himself, so as to avoid further interest accruing on the loans and the legal expenses and remuneration in connection with the appointment of the plaintiffs as receivers being incurred and added to his debt. The plaintiffs’ allegations of interference with the exercise of their functions. 16. By e-mail dated 16th July, 2013 from the defendant to the plaintiffs, the defendant stated that he was happy to accept their appointment as joint receivers “upon the conditions you can provide the following proof and assurances as listed below”. None of the points made in the e-mail, most of which were based on a misunderstanding of the law, are of any substance and the reality is that the defendant was indicating that he was not accepting the plaintiffs’ appointment as joint receivers. 17. On their appointment, the plaintiffs had sent letters addressed to the “Tenant of” the units in 13, North King Street and each of the other properties informing the tenant of their appointment and enclosing a copy of the relevant deed of appointment. It was stated in that letter that the plaintiffs are entitled to receive the rent in respect of the tenancy and the tenant was requested to cancel the current standing order facility in place with immediate effect and to henceforth pay the rent to an account, details of which were given. There is clear evidence that the defendant, in conjunction with another joint owner, Robert Quearney, whom I understand to be his brother, made contact with the tenants and told them to ignore the letters from the plaintiffs and to keep paying the rent to them. 18. In an e-mail of 2nd August, 2013 to a Manager in the plaintiffs’ firm (RSM Farrell Grant Sparks), the tenant of 105, Erris Square informed the plaintiffs that he had been told by Robert Quearney to ignore the plaintiffs’ letter and to keep paying the rent to him. Having discussed the matter with Threshold and a Citizens’ Advice Bureau, the tenant informed Robert Quearney that he intended putting the rent into a separate escrow account until the matter was resolved. However, Robert Quearney and the defendant arrived at 105, Erris Square on the evening of 1st August, 2013 demanding rent and saying that they had “fired the receiver”. They threatened to evict him in fourteen days. The tenant requested the plaintiffs to stop the defendant and Robert Quearney from coming to the house, as it affected his family life and his children. 19. Another example of interference by the defendant was recorded in an el-mail dated 8th August, 2013 from Threshold to the plaintiffs. It related to the tenant in 41, Mount Symon Green. In summary, she had been told by the defendant that the plaintiffs have no legal right to the rent and that he is in the process of challenging their appointment. It was suggested by Threshold to the tenant that, perhaps, the best course of action was for her to place the rent in an escrow account. It was recorded that the defendant had stated that, in that event, he would be forced to change the locks. The tenant, who was due to leave the country, was extremely concerned that she would return to find she had been evicted. 20. By letter dated 30th July, 2013, the plaintiffs’ solicitors, Gartlan Furey, requested the defendant to give an undertaking within seven days that he would desist from making representations to the tenants of the six properties that the rents should be paid to him and threatened proceedings for injunctive relief if the undertaking was not forthcoming. The defendant did not respond to that letter and, even though he exhibited the letter in his replying affidavit, he did not give any indication to the Court that he would desist from interfering with the exercise by the plaintiffs of their functions as joint receivers. Criteria for the grant of an interlocutory injunction and their application 22. The second criterion is the adequacy of damages as a remedy for the plaintiffs in the event of the injunction being refused, if they are ultimately successful in the proceedings. The first named plaintiff has averred in the grounding affidavit that he believes that damages would not be an adequate remedy in the circumstances of these proceedings, given that the defendant is heavily indebted to the Banks and given his belief that the defendant would not be in a position to discharge any award of damages that might be made against him. The defendant has not adduced any evidence to contradict what the first named plaintiff believes and, in particular, he has not demonstrated that, as a matter of probability, the Plenary Proceedings against Allied Irish Banks Plc, which he has recently initiated, will result in a positive reversal of fortune for him. On the other hand, in his grounding affidavit the first named plaintiff has proffered an undertaking to discharge any damages to which the defendant may be entitled in the event that an injunction is granted but the plaintiffs are not successful in the substantive action, which undertaking was given on behalf of both plaintiffs. I am satisfied that that undertaking will protect the defendant against any loss he incurs, if the injunctions sought are granted, and it ultimately transpires that they should not have been. 23. Although it is not strictly necessary to consider it, nonetheless I am of the view that the third criterion is also met, in that the balance of convenience and, indeed, the balance of justice, favours the grant of the injunctions sought, rather than their refusal. Orders on the plaintiffs’ application The defendant’s cross-application 26. I am satisfied that the notice of motion is misconceived. There will be an order striking it out.
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