High Court: Receivers motion for possession of woman’s holiday house is refused



High Court
High Court

A receiver has had his motion claiming possession of a woman’s holiday house in Killarney refused in the High Court.

Finding that the receiver had not sufficiently made out the case that he was entitled to possession of the property, Mr Justice Senan Allen pointed to a number of gaps “in the narrative and in the evidence” submitted by the receiver to support his claim.

Background

Mr Karl O’Neill, a partner in KPMG Chartered Accountants, was purportedly appointed by AIB Mortgage Bank over two properties – referred to in the judgment as the Limerick property and the Muckross property – owned by Mrs Sinead O’Connor and her husband and mortgaged to Allied Irish Banks plc. Mrs O’Connor’s loans and the security held for them had been sold, or purportedly sold, to Beltany Property Finance DAC

The Limerick property was let by Mrs O’Connor to four students, and Mr O’Neill had advised them of his appointment as receiver in January 2018. Thereafter, on 22 January 2018, Mrs O’Connor arrived at the property with a sleeping bag asking the tenants to sign a document stating that they would not have dealings with anyone other than her, telling them that she was going to change the locks. When the tenants declined to sign the document, Mrs O’Connor said she wanted them out of the house – and insisted on staying in the house overnight. The Gardaí were called ‘at least twice’, and Mr O’Neill issued plenary summons on 23 January 2018.

Mr O’Neill claimed an injunction requiring Mrs O’Connor to forthwith surrender possession of two properties and a variety of injunctions restraining Mrs O’Connor, her servants and agents, from interfering with the discharge by the plaintiff of his duties as receiver over the properties. 

On 23 January 2018, Ms Justice Caroline Costello granted a series of interim injunctions, and on 25 January 2018, Ms Justice Marie Baker continued the interim injunctions until further order and made orders restoring the students into possession of the Limerick property.

As a less urgent matter, Mr O’Neill’s motion for interlocutory relief  in relation to the Muckross property was repeatedly adjourned until it came before Mr Justice Allen in November 2018.

In the High Court, Mr Justice Allen dealt with one motion on behalf of Mr O’Neill and three motions on behalf of Mrs O’Connor.

Determination, conviction, and bad advice

Ms O’Connor, with the assistance of a McKenzie friend, issued three motions, all of which were heavily criticised and refused by Mr Justice Allen, who said that Ms O’Connor was ‘not in the least short of determination, conviction and bad advice’ and that her motions were misconceived.

Challenging the validity of Mr O’Neill’s affidavits, Ms O’Connor asserted that Mr O’Neill had not set out his “true place of abode” as required by O. 40, r. 9 of the Rules of the Superior Courts. Stating that this was a “thoroughly bad point”, Mr Justice Allen said that “it was not changed into a good point, by repeating it ad nauseam, or by making it in capital letters”.

Mr Justice Allen continued: “It was a bad point in 1813 when it was rejected …in Haslope v Thorn (1813) 1 M & S 102. It was a bad point when rejected …in Kearney v Bank of Scotland plc [2015] IECA 32. It was a bad point when rejected …in Beakey v Bank of Ireland Mortgage Bank [2018] IEHC 589. And it is a bad point now”.

Motion issued by Mr O’Neill

Mr Justice Allen explained that the substantive claim was for permanent injunctions requiring Mrs O’Connor to give up possession and to restrain her from impeding or obstructing the receivership. To be entitled to the relief, Mr Justice Allen said that Mr O’Neill had to go further than establishing the validity of his appointment; he needed to show Mrs O’Connor had “wrongfully withheld possession and/or threatened or intended to obstruct or interfere with the discharge by him of his functions”.

Mr O’Neill submitted that the threshold test to be applied on this motion was the Campus Oil test, and that even if the test was the Maha Lingam test he comfortably met that threshold. Mr Justice Allen said that several of the reliefs sought were mandatory orders and the higher threshold applied.

While it was clear that Mrs O’Connor was obstructing Mr O’Neill in his attempts to manage the Limerick property and interfere with the students’ entitlement to peaceful possession; Mr Justice Allen said that there was no evidence of obstruction or interference in relation to the Muckross property.

Considering Mr O’Neill’s grounding affidavit, Mr Justice Allen agreed that it was clear Mr and Mrs O’Connor did not accept the validity of Mr O’Neill’s appointment – but that he was unconvinced of the suggestion that Mr and Mrs O’Connor were intent on interfering with Mr O’Neill’s entitlement to possession.

Gap in the narrative

Mrs O’Connor said she and her husband borrowed money from Allied Irish Banks plc and that they signed a mortgage over the Muckross property as security for that loan, however she argued that AIB Mortgage Bank was not entitled to appoint a receiver and that she had no privity with Beltany.

Mrs O’Connor relied on English v Promontoria (Aran) Ltd. [2016] IEHC 662.

Mr Justice Allen said that Mrs O’Connor’s arguments were confused and somewhat misplaced, however, Mr Justice Allen said that, in substance, her argument could be understood to be that Mr O’Neill had “not demonstrated clearly, or at all, how he, on the instructions of Beltany, comes to call for delivery of possession of her property, which was mortgaged to Allied Irish Banks plc”. In this regard, Mr Justice Allen said Mrs O’Connor had a point.

Stating that there was “a gap in the narrative and in the evidence”, Mr Justice Allen said that it was not explained how it came about that Mr O’Neill was appointed by AIB Mortgage Bank

Mrs O’Connor said she had no “notice of assignment of the loan and security from Allied Irish Banks plc to AIB Mortgage Bank or from either Allied Irish Banks plc or AIB Mortgage Bank to Beltany”, and Mr Justice Allen said that no such notice of assignment had been exhibited.

While emphasising that he was not saying Mr O’Neill’s appointment was invalid, Mr Justice Allen said that the evidence offered in support of the application did not establish that AIB Mortgage Bank was entitled to appoint Mr O’Neill.

Motion refused

On the evidence, Mr Justice Allen found that Mr O’Neill had not sufficiently made out the case that he was entitled to possession of the Muckross property

Further, without any evidence of the value of the Muckross property, Mr Justice Allen was also not satisfied that Mr O’Neill was entitled to damages as there was no evidence that the house would not eventually realise enough to pay off the mortgage.

  • by Seosamh Gráinséir for Irish Legal News

© Irish Legal News Ltd 2019



Other judgments by Mr Justice Senan Allen