Court of Appeal dismisses appeal by non-owner tenant against bank possession order due to lack of locus standi.

THE COURT OF APPEAL

Neutral Citation Number: [2018] IECA 90

Record No. 2018/111

Peart J.

Irvine J.

Hogan J.

BETWEEN/

KBC BANK IRELAND PLC

PLAINTIFF/RESPONDENT

- AND -

GORDON SMITH, LINDA HUSSEY, BEN GILROY AND UNKNOWN PERSONS OCCUPYING THE PREMISES AT CHIEFTAINS WAY, 37

HAMLET AVENUE, BALBRIGGAN, CO. DUBLIN

DEFENDANTS/APPELLANTS

JUDGMENT of Ms. Justice Irvine delivered on the 23rd day of March 2018

1. This is an application made by the third named defendant in these proceedings, Mr. Ben Gilroy, for a stay on an order of the High

Court, Baker J., made on the 15th March 2018.

2. By her order, Baker J. directed each of the defendants named in the title to proceedings to deliver up possession to KBC Bank PLC

(“the bank”) the premises at No. 37, Hamlet Avenue, Balbriggan (hereinafter “the property”). She also made orders restraining the

defendants and other persons with notice of the making her order from impeding and /or obstructing the bank from taking possession

of the property and thereafter from trespassing thereon.

3. By notice of appeal dated the 21st March 2018, Mr Gilroy seeks to appeal the aforementioned order.

4. It is of particular importance to this application that Mr. Gordon Smith, who is (or was) the owner of the property, did not appear

at the hearing of the interlocutory injunction to contest the entitlement of the bank to the relief sought on the basis of the claim as

advanced. Neither has he sought to appeal the lawfulness of that order. Whilst the court has been advised that Mr Smith has

continued to reside in the property since re-taking possession on the 26th February last, it may reasonably be inferred from his failure

to engage with the injunction process that he has accepted the bank’s entitlement to possession of the property and that he does

not wish to raise any defence to the bank’s claimed entitlement.

Background

5. The factual background which led to the making of the High Court order is not contested and is set out in some detail in the book

of pleadings and affidavits that was before Baker J. when she made her order.

6. It is not disputed that the bank commenced plenary proceedings on the 27th February 2018 wherein it claims, inter alia, an order

requiring the named defendants, and any one else with notice of the making of any order, to vacate the property and deliver up

possession to the bank.

7. The bank followed up its plenary summons with applications for interim and interlocutory injunctions. Several affidavits were filed in

support of those applications. From the grounding affidavit of Mr. Darragh Langan, it appears that Mr. Smith mortgaged the property

concerned to KBC Bank to secure the provision of certain loan facilities. It is not disputed that as of the 27th February 2018 the

arrears owing by Mr. Smith on foot of that facility amounted to €87,865.69 leaving a total balance of €274,887.70 outstanding.

8. Due to Mr. Smith’s failure to meet his repayments the bank obtained an order for possession from the County Registrar of the

Circuit Court on the 29th April 2016. That order was not appealed by Mr. Smith and the Court has been furnished with a copy of

same.

9. On the 31st May 2017 an execution order issued from the Dublin Circuit Court office directing the sheriff to take possession of the

property. Sometime later, on the 26th February 2018, the sheriff attempted to take possession and execute the Circuit Court order.

According to the affidavit sworn by Mr. Langan, Mr. Smith, Ms. Hussey, the second named defendant, and her son obstructed his

efforts. Possession was nonetheless taken.

10. Later on the same evening Mr. Smith and a large group of his supporters apparently engaged in unseemly conduct in their efforts

to retake possession of the property. It is not necessary to describe further the events of the evening of the 26th February last as

they are canvassed extensively in the affidavit of Mr. Fergus Gallagher, the Sherriff, and the affidavits of two other security officers

caught up in the affray. It is, however, sufficient to state that it is therein asserted that Mr. Gilroy played a role in encouraging those

involved to re-take possession. Again, it is not necessary to detail the nature of the bank’s evidence against Mr Gilroy. It should,

however, be noted that Mr Gilroy denies some of the conduct alleged against him, in particular the claim that he videoed the

engagement between the relevant factions and posted the same to Facebook.

11. In its application for interlocutory relief the bank claimed that the conduct of the owner Mr Smith and his supporters, including Mr.

Gilroy, on the evening of the 26th February 2018 was such that it was unable to exercise its right to possession of the property as

per the Circuit Court order. It claimed that it would only be able to do so with the benefit of the orders sought. It complained also

that damages would not be an adequate remedy should the injunction be refused as the trespassers would not be a good mark for

damages. The bank also gave the necessary undertaking as to damages.

12. Following a consideration of the evidence and the arguments advanced by the parties the High Court judge granted the

interlocutory relief sought by the bank in its notice of motion. It should be said that Mr Smith, for whatever reason, elected not to

contest the bank’s entitlement to possession of his property. Neither did Ms. Hussey. Relevant also is the fact that Mr. Smith has not

appealed the order of Baker J. requiring him to deliver up possession of the property on the basis of the Circuit Court order.

Accordingly it is to be inferred from Mr Smith’s conduct that he does not wish to contend for any of the rights asserted on his behalf

by Mr Gilroy as arguable grounds of appeal and to which I will later refer.

Principles

13. The principles to be applied on the present application are well known. Perhaps the most well known decision in this area of law is

that of McCarthy J. in Redmond v. Ireland, [1992] 2 I.R. 362. More recent authorities include Bank of Ireland v. O’Donnell [2015] and

Irish Press v. Ingersoll [1993] 2 I.R. 443. Of particular importance is the re-statement of the relevant principles by Clarke J. in Charles

v. The Minister for Justice [2016] IESC 48.

14. The Court is obliged to apply a two stage test. The court first must ask itself whether the party applying for the stay has an

arguable ground of appeal. If that threshold is not met then that is the end of the application. If, however, the court is satisfied that

the applicant has demonstrated an arguable ground of appeal it must then decide the stay application in accordance with the balance

of justice. In making its decision on the stay application Clarke J., as he then was, in Charles stated that the court must try to

minimise the risk of injustice to the parties. This is best achieved by the court assessing the effect that granting or refusing the stay

will have on the respective parties.

Mr. Gilroy’s submissions

15. Mr. Gilroy maintains that he has established arguable grounds of appeal. He first maintains that he is entitled to defend the

present proceedings and argue his appeal against the order of Baker J. by contending that the Circuit Court order made by the County

Registrar on the 29th April 2016 is void and of no effect. He submits that that order is void because he believes Mr. Smith was

present in court when the order was made and had with him a defence to the proceedings. That being so, he maintains the County

Registrar did not enjoy jurisdiction to make the order under the Circuit Court Rules.

16. Second, Mr. Gilroy claims that he wishes to defend the proceedings on a point of law, namely that the bank had no entitlement to

the order sought on the interlocutory injunction in circumstances where the sheriff, as a matter of law, had no power to forcibly enter

and take possession of a property that was the “dwelling” of Mr. Smith.

17. Mr. Gilroy claims that he is entitled to advance all possible defences to the bank’s claim as pleaded and that he cannot be

restricted to legal arguments solely directed to the banks claim against him personally. Likewise he claims to be entitled to advance all

grounds of appeal as would have been open to the other defendants had they chosen to appeal the order of Baker J.

18. It is clear that Mr. Gilroy claims to have the necessary locus standi to advance all of the grounds of appeal set out in his notice of

appeal. All of the grounds therein set out, he maintains are arguable. Further he argues that the balance of convenience clearly

favours the granting of the stay this court in that if imposed it will permit the Smith family remain in the property until the legal issues

raised by him on the appeal are disposed of.

The bank’s submissions

19. Counsel on behalf of the bank maintains that Mr. Gilroy has not established any arguable ground of appeal. He submits that Mr

Gilroy was only joined to the proceedings on the basis that he was exhorting members of the public to interfere with the bank’s efforts

to retake possession. The bank’s only interest in joining Mr. Gilroy as a defendant was to ensure that he would not by his actions

encourage the defendants or other non parties to interfere with the bank’s entitlement to possession.

20. Counsel submits that Mr. Gilroy has no locus standi to what he describes as “conjure up rights” on behalf of the Smith family and

pursue legal arguments based on such rights at the hearing of the appeal. It is not as if Mr Gilroy was representing the interests of Mr

Smith, the owner of the property. Counsel observed that he is pursuing his appeal solely on his own behalf. Counsel argues that the

grounds of appeal proposed by Mr Gilroy have simply no relevance to the claim made against him and that he cannot rely upon

grounds of appeal or grounds of defence that might have been advanced by Mr Smith arising from his rights as the owner of the

property.

21. Finally, counsel on behalf of the bank submits that even if Mr. Gilroy could convince the court that he has arguable grounds of

appeal, the balance of justice clearly favours refusing the stay. He points to the total sum outstanding to the bank, namely

€274,887.70, the fact that Mr Smith’s liability to the bank continues to mount while the property remains unsold and that is apart

from the legal costs that have been incurred as a result of Mr Smiths conduct. Mr Gilroy, should he fail on his appeal, will not,

according to counsel, be a good mark for any losses sustained by the bank as a result of the imposition of a stay on the High Court

order.

Decision

22. Applying the principles referred to in Redmond and Charles to the facts of the present case I have come to the conclusion that

this application must fail.

23. I am first of all not satisfied that Mr. Gilroy has established any arguable ground of appeal. That conclusion of itself necessarily

sounds the death knell to the stay application.

24. The first point I would make is that the claim made by the bank against Mr Gilroy is an extremely limited one. It claims that by his

conduct on the 26th February 2018, Mr Gilroy incited members of the public to interfere with its efforts to retake possession of the

property and that unless restrained it would be unable to exercise its right to possession of the property as provided for in the Circuit

Court order.

25. Mr. Gilroy is, of course, a party to these proceedings having been joined as a defendant by the plaintiff Bank. That being so he is

fully entitled to defend these proceedings and the claim that he engaged in various acts of trespass and interference with the

property and to appeal any orders made against him. He can, of course, advance any defence relevant to that claim which bears on

his own personal circumstances. But what he is not entitled to do is to advance the potential rights and putative claims of third

parties such as those of Mr. Smith and Ms. Hussey (see Cahill v. Sutton [1980] I.R. 269). The same limitation applies to the grounds

of appeal Mr Gilroy may seek to advance in pursuit of his appeal against the order of Baker J.

26. Chief amongst those grounds is Mr Gilroy’s submission that the entry by the sheriff and his agents in taking possession of the

property amounted to a breach of Article 40.5 of the Constitution which provides that:

“The dwelling of every citizen is inviolable and shall not be forcibly entered save in accordance with law.”

27. Even if it is assumed in Mr. Gilroy’s favour that the property in question is still a “dwelling” for the purposes of Article 40.5, that

acceptance would not avail him in any way, as the only persons who can invoke any rights under Article 40.5 in the present context

are Mr. Smith, Ms. Hussey and, possibly, their children, assuming, that is, that the constitutional provision has any application at all in

a case of this kind and that the property in question could still properly be regarded as their dwelling. It follows, therefore, that an

individual in the position of Mr. Gilroy who never owned or resided in the property cannot invoke Article 40.5 for this purpose. And, as

is clear from what has been earlier stated, none of the aforementioned persons have sought to challenge the power of the sheriff to

take possession of the property on foot of the Circuit Court order.

28. Material also to the grounds of appeal proposed by Mr Gilroy is the fact that Mr Smith, in the present proceedings, does not seek

to advance any defence to the banks claim to possession based on an assertion that the Circuit Court order is void.

29. In passing I would note that whilst it was submitted that the order of the County Registrar was void because Mr Smith, according

to Mr Gilroy, was present on the day the order was made and had with him a defence, there was no evidence before this court that

this was so. Mr Gilroy was not himself in attendance, no copy of that defence was produced and no evidence proffered that Mr Smith

was in fact present. I would also observe, not that it is necessary, that Mr Gilroy was not a party to those proceedings and that the

order of the County Registrar was never appealed.

30. The present case is a classic example of one in which a party seeks to invoke a jus tertii (or rights of third parties) in a

constitutional case. The case-law is unanimous in demonstrating that such jus tertii claims will not be entertained, at least absent

some highly unusual circumstances. This was the very point articulated by Henchy J. in Cahill v. Sutton and which has been

consistently followed in the almost 40 year interval since that leading case was first decided.

31. In Cahill the plaintiff sought to challenge the constitutionality of the three year limitation period contained in s. 11 of the Statute

of Limitations 1957. The High Court had ruled that the plaintiff’s action against her treating consultant was barred by the operation of

this provision. Although it was accepted that the plaintiff always knew of the facts giving rise to her cause of action, she claimed

that these provisions were unconstitutional because they might have affected a third party where “the would be plaintiff did not

know and could not have learned within that period of the accrual of the cause of action”, thus unfairly excluding that putative third

party from pursuing a cause of action. The Supreme Court held that such an indirect assertion of constitutional rights on behalf of a

third party could not give the plaintiff the necessary standing to advance a constitutional claim in her own right.

32. As Henchy J. explained, the general rule is that a plaintiff must show ([1980] I.R. 269 at 282) that he or she has adduced

circumstances demonstrating that “the impugned provision is operating, or is poised to operate, in such a way as to deprive him

personally of the benefit of a particular constitutional right.” He went on to say that experience has shown that to “allow one litigant

to present and argue what is essentially another person’s case would not be conducive to the administration of justice as a general

rule.”

33. In my view, these principles govern the present application. Mr. Gilroy cannot be allowed to argue what in effect is Mr. Smith’s

case regarding the potential operation of Article 40.5 and there is no evidence at all that Mr. Gilroy will personally be deprived of any

constitutional right he enjoys in relation to Article 40.5 by the entry of the sheriff on to the property which was previously owned by

Mr. Smith. Because, therefore, it is clear that Mr. Gilroy cannot invoke these jus tertii rights in the present context, no arguable claim

in respect of these putative third party constitutional rights can be advanced by him as a ground of appeal against the order of Baker

J..

34. Thus it is I have come to the conclusion that Mr Gilroy has no locus standi to advance the grounds of appeal referred to in his

notice of appeal. That this is so could not be clearer from the very limited nature of the claim made against him. After all, he does not

own the premises and neither has he at any stage maintained he has any interest therein. Just because he is a party to proceedings

does not mean he is entitled to invoke the Irish statute book and the Constitution to assert legal rights and make legal arguments

that might potentially have been advanced by the owner of the property but which he eschewed.

35. Even if Mr. Gilroy had been in a position to establish an arguable ground of appeal, that being the first leg of the test to be

applied on a stay application, I am in any event satisfied that the balance of justice clearly favours refusing his application. I say that

for a number of reasons. First, and most importantly, given that Mr. Gilroy does not own the property and is not residing there he can

hardly claim he is prejudiced by the order for possession or the ancillary order restraining his trespass on the premises. Second,

without a court order it is clear that the bank will remain unable to enforce the rights which it enjoys by reason of the Circuit Court

order for possession. Third, even if a stay was granted and Mr. Gilroy was unsuccessful on his appeal - which is, perhaps, not an

unlikely outcome - he has not demonstrated that he would be in a position to pay damages to the bank to cover such loss as it might

sustain as a result of a stay being granted. Fourth, in contrast to the position of Mr Gilroy, the bank is in a position to give a

meaningful undertaking as to damages.

36. For all of the aforementioned reasons I would refuse the stay.