[2017] IEHC 536
THE HIGH COURT
[2017 No. 4898P]
TOM KAVANAGH
PLAINTIFF
DEFENDANT
EX TEMPORE JUDGMENT of Mr. Justice Twomey delivered on the 28th day of July, 2017
1. This is a matter where the defendant had borrowed funds from Bank of Scotland (Ireland) Limited. As a result of the merger of Bank of Scotland (Ireland) Limited with Bank of Scotland plc and the subsequent assignment of its loan book to Carval Investors UK Limited, which novated same to Pentire Property Finance Limited, it is alleged that the defendant owes approximately €2 million to Pentire Property Finance Limited.
2. The defendant had entered into a mortgage over his lands in Naas, County Kildare as security for his borrowings to Bank of Scotland (Ireland) Limited. Under the terms of this mortgage, Mr. Tom Kavanagh (the “Receiver”), was appointed as a receiver to the defendant’s lands by Bank of Scotland plc.
3. The appointment of the Receiver was duly novated in favour of Pentire Property Finance Limited by Deed of Novation dated 20th April, 2015.
4. The defendant has refused to give up possession of the lands to the Receiver and as a result the Receiver has brought plenary proceedings seeking injunctions requiring, inter alia, the defendant to give up possession. In these proceedings, the Receiver seeks interlocutory injunctions, pending the full hearing of the action, in similar terms to those sought in the plenary summons.
5. The defendant does not dispute that he borrowed the monies or that he failed to repay those borrowings, but he seeks to challenge the entitlement of the Receiver to the injunction on the grounds inter alia that he has not proved the chain of title to the lands including the transfer of title from Bank of Scotland Ireland to Bank of Scotland plc and various other technical arguments such as that the Deed of Appointment of Receiver although signed, was not initialled and so could not be relied upon and that the affidavits of the Receiver state “I beg to refer to the pleadings and proceedings already had herein when produced” and so could not be relied upon since they were sworn before the Plenary Summons issued, even though they stated that they had been issued.
6. In addition, the defendant initially claimed on affidavit that he had put the lands in question in “an irrevocable private contract trust” and was apparently purporting to defend these proceedings on that basis, but this appears to have been abandoned.
7. Evidence has been produced to this Court of:
• the Terms and Conditions attaching to the Bank of Scotland (Ireland)’s Facility Letters to the defendant dated 2nd March, 2006, and 11th May, 2007 (including Clause 14 regarding the right of that bank to assign its rights under the loan or any security documents to any person);
• the Mortgage dated 21st April, 2006, between the defendant and Bank of Scotland (Ireland) (including Clause 26 regarding the right of that bank to assign its rights thereunder);
• the merger of Bank of Scotland (Ireland) with Bank of Scotland plc;
• the appointment by Bank of Scotland plc of the Receiver;
• the sale by Bank of Scotland plc of the defendant’s loan to Carval Investors UK Limited;
• the novation by Carval Investors UK Limited of that loan sale to Pentire Property Finance;
• the novation of the Deed of Appointment of Receiver from Bank of Scotland plc to Pentire Property Finance; and,
• most significantly, the registration of Pentire Property Finance in the Land Registry as the owner of the charge over the defendant’s land, which under s. 31 of the Registration of Title Act, 1964, is conclusive evidence of the of the title of that person to the land in question, in the absence of fraud and there has been no allegation of fraud by the defendant.
8. It is clear to this Court from this compelling evidence, and despite the defendant’s claims to the contrary, that the Receiver has established that there is a fair issue to be tried that he has a right to possession of the lands in question, pending the determination of the substantive proceedings.
9. The next question is whether damages would be an adequate remedy. The defendant owes over €2 million and there has been no evidence that he has the funds to repay this amount and whatever evidence there is points to the contrary conclusion. Since 2014, although the defendant indicated that it was his view that Bank of Scotland would take anything that was going for the sale of his loan as it was leaving the Irish market, he has failed to make any settlement offer for the loan despite indicating that he would do so. On this basis, there appears little prospect of the defendant being able to pay damages to the plaintiff and so damages would not be an adequate remedy.
10. As regards the balance of convenience, in view of the scale of the liability which is over €2 million, and as there appears to be no prospect of this being repaid, all that is likely to happen between today’s date and the trial of the action is an increase in the sum owed and so it is this Court’s view that in reliance on the judgment of Laffoy J. in Lowe v. Burns [2012] IEHC 162 that the balance of convenience supports the granting of the interlocutory injunctions in the terms of the Notice of Motion.
