Court refuses application to set aside injunction due to lack of fraud despite new security documents. The court held that minor discrepancies in mortgage copies did not constitute the deliberate dishonesty required to overturn a final judgment. The applicant failed to prove fraud affecting the decision fundamentally.

THE COURT OF APPEAL

Neutral Citation Number: [2018] IECA 354

Record Number 2017/113

Irvine J.

Whelan J.

Kennedy J.

BETWEEN/

KEN TYRRELL

PLAINTIFF/

RESPONDENT

- AND -

DAVID WRIGHT AND ROPE WALK CAR PARK LIMITED

DEFENDANTS/

APPELANTS

JUDGMENT of Ms. Justice Irvine delivered on the 15th day of November 2018

1. This judgment relates to an application by Mr. David Wright, who was the appellant in an appeal determined by this court earlier

this year, to set aside the judgment of Whelan J. delivered on the 28th September 2018 and the court’s order consequent thereon.

Background

2. The appeal brought my Mr. Wright was against an order made in the High Court (Costello J.) on an application for an interlocutory

injunction. On the 24th February 2017, she ordered Mr. Wright to deliver up possession of a number of properties to Mr. Ken Tyrrell,

who was appointed receiver over those properties by Launceston Property Finance DAC on the 22nd August 2016. The High Court

judge granted a stay on her order insofar as it related to the property at 1B Swan Lake, Chapelizod Road, Dublin until the 30th June

2017 and that order was extended by this court until the 21st December 2017.

3. Mr. Wright brought an application to extend that stay and that was heard by Ryan P. on the 26th January 2018. On the same date

he also sought liberty of the court to introduce new evidence on the hearing of the appeal concerning what he then described as

“conflicting security documents” which he stated had not been before the High Court judge when she made her order. The receiver

maintained that the point which Mr. Wright wished to raise, relying on the new documentation in his possession, was without

foundation because it was not disputed that in order to procure his loan he had entered into a mortgage in respect of each property

and had drawn down loan monies. Despite adopting this position, junior counsel on behalf of the receiver did not object to the copy

document being admitted on the hearing of the appeal.

4. It is clear from p. 24 of the transcript of the hearing of the 26th January 2018 that Mr. Wright’s principle concern was that he be

allowed to introduce, before this court, the new evidence on the basis that it had been fraudulently excluded by the receiver in the

High Court. It is also abundantly clear from the transcript that the Court had granted Mr. Wright liberty to introduce new evidence

albeit limited to the security documentation supporting his loan. That said, no formal court order was drawn to reflect the directions

given by the president on that date.

5. In an affidavit filed by Mr. Wright dated the 21st February 2018, the day upon which his appeal was heard, he referred to the fact

that his appeal was “about the veracity of mortgage deeds” relied upon by the receiver who claimed to have been appointed by

mortgage deed dated the 18th December 2008. According to Mr. Wright there was no such document. In his affidavit he referred to

the fact that in his view there were three different copy mortgages, all attested to be true copies of the original. That affidavit also

exhibited what he referred to as the third alleged copy of the original mortgage deed.

6. It is also the case that in accordance with the directions given by Ryan P. on the 26th January 2018, Mr. Wright delivered

amended written submissions which deal in detail with two of the copies of the mortgage deed pursuant to which Mr. Tyrrell was

appointed receiver. His submissions also detailed what he described as a number of discrepancies between those copy documents and

the inferences which the court was asked to draw from them.

7. Of significance to the background facts relevant to this application are a number of exchanges between the parties and the court

which took place in the course of the appeal itself. The first was an exchange which followed a statement made by Mr. Wright

concerning (i) the collapse of the property market, (ii) an agreement allegedly made with Anglo Irish Bank that the properties be

rented and (iii) a proposal that he would make substantial borrowings on credit cards. Counsel for the receiver objected to what he

described as Mr. Wright giving evidence, as a result of which Mr. Wright was reminded that the court had to confine itself to a

consideration of the evidence in the proceedings. In response to a suggestion by the court that he might best present his appeal by

addressing the grounds set out in his notice of expedited appeal, Mr. Wright advised the court that Ryan P. had granted him

permission to pursue “other grounds” and that he was entitled to introduce new evidence.

8. In response to this statement by Mr. Wright, senior counsel on behalf of the receiver made the following statement to the court:

“my client dissents from that. There is no order to that effect and that was not what the President said.”

9. Mr. Wright then reminded the court that the new evidence was in his affidavit. In turn, the Court responded by indicating that it

had that affidavit and that senior counsel for the receiver was making no objection to that affidavit forming part of the evidence.

From the exchanges that followed, it is clear that Mr. Wright highlighted to the court the importance of the additional information and

documentation in his affidavit and that the court had accepted his statement that the receiver had in fact consented to the

admission of the new evidence on the 26th January 2018.

10. For the reasons set out in the judgment of Whelan J. delivered on the 28th September 2018, with which judgment the other

members of the court agreed, Mr. Wright’s appeal was dismissed. In that judgment, Whelan J. dealt with each of the grounds of

appeal contained in the notice of expedited appeal after which she addressed, under the heading “Further arguments” Mr Wright’s

submissions concerning the significance of the copy security documentation which had come to light since the hearing in the High

Court. She did so in the context of reviewing the approach of the High Court judge to the granting of the interlocutory injunction, as

was appropriate having regard to the nature of the appeal, and concluded that any discrepancies in that documentation was not

sufficient to deny the receiver the injunction which he sought.

The present application

11. In his affidavit grounding the present the application, Mr. Wright essentially provides three reasons why the judgment and order of

this court should be set aside. First, he maintains that the receiver withheld from the High Court judge the actual mortgage filed in

the Land Registry which was undated and had failed to explain the inconsistencies in the copies of the security documentation

furnished to the court. Second, Mr. Wright maintains that the sum claimed for interest in other proceedings brought by way of

summary summons was incorrect and the statements of account relied upon by the bank were inconsistent in this respect. Third, and

most importantly, the Court of Appeal had been misled by senior counsel acting on behalf of the receiver when it had been informed

that Mr. Wright had not been granted liberty to introduce new evidence by Ryan P. on the 26th January 2018. He had obtained such

an order and junior counsel for the receiver had agreed that the evidence could be admitted on the appeal. Thus, Mr. Wright

maintains the Court of Appeal was misled on an issue of fundamental importance. He also submits that whilst the court’s judgment

notes his reliance upon the new evidence and refers to the different copies of the mortgage instrument, that evidence was tainted by

what was said by senior counsel on behalf of the receiver. This was apparent from the fact that his argument, which was at the

heart of his appeal, had been dealt with very briefly in the court’s judgment. Further, in her judgment Whelan J. had referred to the

fact that, without leave of the court he had sought to advance further additional grounds of appeal beyond those in his notice of

appeal. This observation, Mr Wright maintains, supports his contention that his submission concerning the consequences that flowed

from the differences between the copy documents was not considered with appropriate deference.

The Prevailing Legal Principles

12. The circumstances in which a court will set aside a final order are rare indeed. Some of the better known judgments which engage

with the prevailing principles are those of Denham J. in Re Greendale Developments Ltd (No3) [2000] 2 I.R. 514, Murphy J in Tassan

Din v. Banco Ambrosiano S.P.A [1991] I.R. 569 and Fennelly J. in Kenny v. The Provost, Fellows and Scholars of the University of

Dublin, Trinity College [2008] 4 JIC 1001. These judgments make clear that the party who seeks to set aside a final order must

discharge the burden of establishing that there are exceptional circumstances showing that the remedy is necessitated by the

interests of constitutional justice. Further, the mere assertion of a breach of constitutional rights does not provide a sufficient basis

for seeking to set aside a final order.

13. It is nonetheless correct as a matter of law that fraud can provide a basis for setting aside a final order. However, once again the

onus of proof is and exceptionally high one as was stated by Murphy J. in Tassan Din (at p. 581) where he approved of the judgment

of Lord Simon the Ampthill Peerage Case [1977] A.C. 547 at p. 591 where he said the following:-

“To impeach a judgment on the grounds of fraud it must be proved that the court was deceived into giving the impugned

judgment by means of a false case known to be false or not believed to be true or made recklessly without any knowledge

on the subject. No doubt, suppression of the truth may sometimes amount to suggestion of the false: The Alfred Nobel

[1918]. But, short of this, lack of frankness or an ulterior or oblique or indirect motive is insufficient.”

14. It is clear from all of the authorities that nothing less than proof of fraud in the strict legal sense of that word will suffice to set

aside a final order. The applicant must establish conscious and deliberate dishonesty on the balance of probability. Further, as was

stated by Fennelly J. in Kenny at para. 55:-

“the fraud alleged must be such as to affect the impugned decision in a fundamental way. It will not suffice to allege that

the new situation revealed by the uncovering of the fraud might have affected the judgment”.

15. The reason for the existence of such a high threshold before a final order will be set aside is obvious. There must be finality to

litigation. Parties in most cases, such as the present one, have the opportunity to contest proceedings at first instance and also have

an opportunity to have any judgment pronounced against them tested in a review process on an appeal. However, at that point, save

in exceptional circumstances the rights of the parties are determined for all time and the successful party is entitled to rely upon the

fact that the outcome of the litigation will not later be disturbed.

Discussion

16. Bearing these principles in mind I will now return to deal with Mr. Wright’s submissions. I will deal with each of his arguments in

turn.

17. First, it is not open to Mr. Wright, at the conclusion of the hearing before this court to seek to set aside the court’s judgment on

the basis of anything that occurred in the course of the High Court proceedings. If he was of the view that the receiver had

perpetrated a fraud on the High Court judge and this had operated to his detriment, his remedy at that point was to seek to set aside

the High Court judgment. However, it is clear that he eschewed that option when the undated mortgage deed came to hand in May

2017. Instead, he elected to seek to have new evidence admitted on the hearing of his appeal. Even if this was not the strict legal

position, Mr. Wright’s has produced no concrete evidence to support his contention that the receiver fraudulently withheld the copy

security documentation from the High Court judge. Whilst Mr Wright has been in a position to produce three copy deeds of mortgage

which have some minor discrepancies between them, absent a bald assertion of fraud, there is no evidence to support any intentional

or deliberate wrongdoing on the part of the receiver for failing to have all those documents before the court for the purposes of his

interlocutory injunction application.

18. Neither in my view has Mr. Wright demonstrated how the availability of that documentation at the time of the injunction would

have altered the result of the High Court application, having regard to the principles which prevail on such an application. Substantive

issues of law are not determined on an application for interlocutory relief and are inevitably left to be resolved at a plenary hearing.

Damages will be the remedy if it be established at the plenary hearing that the receiver was not validly appointed and had no

entitlement to the order for possession.

19. For completeness, I would here observe that as yet the plenary hearing of these proceedings has not taken place. Thus, it

remains open to Mr. Wright to seek to force on that action for hearing as a means of challenging the validity of the receiver’s

appointment and his entitlement to sell the property. Should he do so he will be entitled to rely upon all of the evidence that was

before this court on the hearing of the appeal and if successful in that challenge, he would of course be entitled to damages.

20. Second, insofar as Mr. Wright wishes to rely upon an incorrect calculation of interest claimed in summary summons proceedings,

those are matters that are wholly extraneous to the within proceedings. Mr. Wright had every opportunity to defend those

proceedings and to appeal the outcome. He cannot use anything that occurred in those proceedings which were finally and

conclusively determined as a basis upon which he might seek to reopen the within possession proceedings.

21. Finally, as to Mr. Wright’s submission that the court’s judgment should be set aside because of what was said by senior counsel to

the court concerning the admission of new evidence on the appeal, that is a submission which I would reject both as a matter of fact

and as a matter of law.

22. What was stated by counsel and what is reported in the transcript could never amount to proof of fraud, on the balance of

probabilities, as is required.

23. It is indeed regrettable that senior counsel acting on behalf of the receiver made a statement to the court which was incorrect

insofar as he maintained that Mr. Wright had not been granted permission to introduce “other grounds” and “other information in the

new booklets and the new evidence” into the case. It is, however, clear from the transcript of the directions given by the President

that Mr. Wright was at that stage given liberty to introduce the undated deed of mortgage which had come to his attention in May

2017. Nonetheless, what is abundantly clear from the exchanges between Mr. Wright and the court, which immediately follow senior

counsel’s intervention, is that the court well understood that Mr. Wright was seeking to rely upon the discrepancies between each of

the three copy documents referred to in his affidavit of the 21st February 2018, which the court had in its possession and that the

members of the court were aware of the fact that the receiver was making no objection to the introduction of that evidence. Senior

counsel did not contest Mr. Wright’s assertion that his junior counsel had, on behalf of the receiver, agreed that this documentation

could be admitted on the hearing of the appeal.

24. Having considered the affidavits filed and submissions made by the parties on the present application I am satisfied that there is

nothing in the evidence that has been put before this court by Mr. Wright which could possibly cause me to conclude that the

receiver, or his counsel, sought to deliberately deceive or mislead the court concerning the directions given by Ryan P. on the 26th

January 2018, so as to prohibit the court considering the new evidence upon which Mr. Wright wished to rely to supplement his

original grounds of appeal. Further, I am quite satisfied that regardless of the intervention made by senior counsel which misstated

what had occurred on the 26th January 2018, the court did not exclude from its consideration the new evidence introduced by Mr.

Wright.

25. Senior counsel’s intervention was, for the reasons already stated, regrettable. It is important here to state that judges depend

not only on the independence and integrity of counsel, but also rely on counsel for a truly accurate account of what may have

happened before another court on another day because often times the court will not have a transcript of what transpired on that

occasion. The accuracy of any such statement made by counsel is of even greater importance where the other party is

unrepresented. However, not only is there no evidence of any intentional deceit or fraud on the part of the receiver or senior counsel

acting on this behalf when he incorrectly advised the court that the President had not permitted Mr. Wright to introduce new

evidence, but Mr. Wright has not established that anything that was said on behalf of the receiver on 21st February 2018 adversely

affected the outcome of the appeal. All of the evidence points the other way.

26. The following are but some of the reasons why Mr. Wright’s application must fail:-

(i) it is clear from the transcript of the proceedings before the Court of Appeal to which I have earlier referred and from

Mr. Wrights affidavit of 21st February 2018, that the court, in accordance with the earlier directions of Ryan P., accepted

the new evidence for its consideration on the hearing of the appeal;

(ii) as a result of the order of Ryan P., Mr. Wright filed a detailed amended submission which was delivered on the 13th

February 2018 wherein, over the course of four pages, he drew the court’s attention to what he considered to be

significant differences between two of the copy security documents. These submissions and the documents therein

referred to were all considered by the court for the purposes of determining the appeal;

(iii) in the course of his oral submissions, Mr. Wright took the court through what he considered to be the material

differences between the various copy security documents and made submissions as to the consequences he maintained

flowed from those inconsistencies. Those submissions were all considered by the court for the purposes of determining the

appeal;

(iv) counsel for the receiver also addressed these, what he referred to as, minor discrepancies between the counterpart

mortgage and the certified copy in his submissions;

(v) in the course of her judgment, Whelan J. addressed Mr. Wright’s arguments which centred upon the three different

copies of the mortgage instrument which had come to light since the High Court hearing. She did so in the context of an

appeal against an interlocutory injunction and correctly, as a matter of law, concluded that any such discrepancies did

not undermine the receiver’s entitlement to the interlocutory relief which he sought. She considered the technical

disparities to be largely “specious and unmeritorious” (at para. 92);

(vi) the fact that in her judgement, Whelan J. deals at some length with each of the grounds of appeal proposed by Mr.

Wright in his notice of expedited appeal does not support his contention that his submission based upon the copy security

documentation which became available since the High Court hearing was not considered. She went on to give separate

consideration to the significance of the new evidence in the context of the interlocutory injunction which had been

granted. Given the principles that apply on an application for an interlocutory injunction, it would have been wholly

inappropriate for the court to make any final determination concerning the validity of the receiver’s appointment or his

power of sale based on those documents. Those were matters which could only fully be determined at a plenary hearing.

Conclusion

27. A court may only set aside a final judgment in exceptional circumstances. Where the applicant seeks to rely upon a claim of fraud,

as is the case here, they must be in a position to establish, on the balance of probabilities, deliberate and purposeful dishonesty

which likely affected the impugned decision in a fundamental way.

28. On the facts as identified by Mr. Wright there is simply no evidence of fraud or deceit of any kind. Whilst there was a statement

made to the court which was incorrect as a matter of fact, it comes nowhere near to the type of conduct that would be required for

the court to set aside a final order. Further, for the reasons earlier set out in this judgment the error on the part of counsel for the

receiver, has not been shown to cast doubt over the validity of the decision which it is now sought to impugn.

29. For all of the reasons earlier stated I would refuse the application.