Appeal dismissed; injunction refused as principal debt liability is not a fair issue for interlocutory relief.

THE COURT OF APPEAL

Neutral Citation Number: [2018] IECA 95

Record Number: 2016 No. 418

Peart J.

Hogan J.

Whelan J.

BETWEEN:

CLARE GIBB

PLAINTIFF/APPELLANT

- AND -

PROMONTORIA (ARAN) LIMITED, BRENDAN HANRATTY AND DECLAN TAITE

DEFENDANTS/RESPONDENTS

JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 12TH DAY OF MARCH 2018:

1. In the High Court, the appellant sought injunctive relief to restrain the respondents from interfering with two properties, namely 54,

New Road, Clondalkin, Dublin 22, and Unit 1, 1-3 The Coombe, Dublin 8. Her application was refused for reasons stated by O’Connor J.

in his ex tempore judgment delivered on the 12th July 2016 [2016] IEHC 521, and she now appeals to this Court against that refusal.

2. Promontoria purchased two loans which the appellant and other borrowers previously obtained from Ulster Bank, and has appointed

the second and third named respondents as receivers over the Clondalkin and Coombe properties on the 15th February 2016, having

failed to obtain repayment of the loans within the time specified in letters of demand which issued on the 8th February 2016. Part of

the security provided for these loans was a mortgage over the properties. The receivers wish to gain possession of the properties so

that the proceeds can be applied in reduction of sums claimed to be due to Promontoria under the two loans purchased from Ulster

Bank, hence the appellant’s application for injunctive relief to restrain them. I should add that by the date of commencement of her

proceedings in the High Court the appellant had ceased making any repayments on foot of these loans.

3. One of the issues raised by the appellant in her proceedings relates to the interest rate applied to the loans. While not explicitly

stated by the trial judge, it seems to me that he was prepared to accept that an issue arose in relation to the amount of interest

charged on the loans, but was clear also that this issue was not sufficient to justify the granting of an interlocutory injunction since,

in the event that the appellant was successful at hearing in relation to the interest issue it could be dealt with by a monetary

adjustment in the amount to which Promontoria would be entitled to recover. The trial judge was not satisfied that she had raised any

such fair issue in relation to her liability to repay the principal. She had raised certain technical issues relating to assignment of the

debt to Promontoria by Ulster Bank, and in relation to the appointment of the receivers. I have no doubt that the trial judge was

correct in this regard, and they were not pursued on this appeal.

4. In order to satisfy the requirement in Campus Oil Limited v. Minister for Industry and Energy (No 2) [1983] IR 88 a plaintiff seeking

an interlocutory injunction must first of all raise a fair issue to be tried. If that requirement is met the Court will move to the question

of whether damages can be an adequate remedy. If not, then an interlocutory injunction will normally be granted. But even where

damages are an adequate remedy the Court will consider where the balance of convenience lies. Strictly speaking, where no fair issue

was considered to have been raised against the claim for the principal monies owing under the loans, it was unnecessary for the trial

judge to consider the issue of the balance of convenience. Nevertheless, he appears to have done so by addressing an argument

made by the appellant that the Clondalkin premises comprises her home (a claim disputed by the respondents).

5. The trial judge concluded that “ultimately, the plaintiff’s claim is all about money and potential damages due”. He went on to state,

as appears at paras. 18-19 of his ex tempore judgment:

“18. If the plaintiff succeeds in her claim against Ulster no question has been raised as to Ulster’s ability to pay that sum.

Similarly, if the plaintiff succeeds in her claim that [Promontoria] was not assigned the entire of the debt due by her to

Ulster or that [Promontoria] was only assigned a portion, the ultimate figure may be adjusted in the final reconciliation of

the receivership account. In other words, damages will be an adequate remedy and the Court finds no merit in the

suggestion that the damages which the plaintiff may claim are not ascertainable.

19. The plaintiff has alluded in her affidavits to her impoverished state and the necessity for her to return to work to pay

her living expenses when she had hoped to retire at this stage in her life. In those circumstances, and without any

potential for an assurance about the re-commencement of repayments under the loan facility by the plaintiff, it seems to

the Court that the balance of convenience favours the defendants in refusing the wide ranging order sought in restraining

any activity by them as receivers. The receivers following this determination may proceed to secure the properties for the

benefit of [Promontoria] and any interest which the plaintiff may have depending on her success in her claims against

Ulster in the 2012 proceedings and [Promontoria] in these proceedings. No reason has been offered by the plaintiff as to

why the receivers should not now proceed, as in other receiverships, to take in an account in the usual way for rents and

outgoings.”

6. I should refer briefly to the 2012 proceedings to which the trial judge referred in his para. 19. The 2012 proceedings to which the

trial judge referred were commenced by plenary summons which issued on the 11th December 2012, and in which Ulster Bank Ireland

Ltd is the sole defendant. For some reason she issued two such plenary summonses on that day, each naming Ulster Bank Ireland Ltd

as sole defendant and containing identical reliefs. She issued these summonses personally (in other words no solicitor is named therein

as acting for her), and one can safely presume that she also drafted same. These summonses were served on the same date as they

were issued, but the appellant has failed to further prosecute those proceedings. The general indorsements of claim in each describe

her claim as being one for €1,000,000 damages, plus aggravated damages for the “gross negligence and misrepresentation

orchestrated by Ulster Bank Ireland Ltd, and its servants or agents”. The basis for such relief is a claim by her that the bank breached

“liquidity laws which has caused the financial collapse”, but for which she could, and would, have made different financial decisions.

She alleges also that due to excessive securitisation the banks created a false ‘boom and bust’ situation which crippled this country,

and further that reckless lending practices by the bank ignored its own banking guidelines in breach of the consumer protection code.

In addition to damages she included a claim for a declaration that her mortgage with the bank was null and void, and its removal from

her title.

7. As I have said, those 2012 proceedings have not been progressed as far as pleadings are concerned. However, it appears that on

the 20th May 2016 she issued a notice of motion in the present proceedings (by which date a solicitor had come on record for her),

seeking to consolidate these proceedings with the two 2012 proceedings. She swore a lengthy affidavit to ground that application to

consolidate in which she refers to the fact that she had by separate application returnable for the 9th May 2016 sought to have the

defendants in the present proceedings (i.e. Promontoria, Brendan Hanratty and Declan Taite) added as defendants in the 2012

proceedings, given her view that the issues were common to each. She stated that her application in that regard was adjourned

when it came before the Court on the 16th May 2016, and that no fixed date was given. She urged that it would be convenient if the

consolidation motion and the motion to add defendants were heard together.

8. The existence of several proceedings, with various applications to add defendants, and consolidate proceedings, all being issued on

different dates and for different return dates, as well as an application for interlocutory injunctive relief in just one action, leads to

entirely unnecessary duplication and inevitable confusion. However, in Ms. Gibbs’s grounding affidavit to her motion to consolidate

proceedings, she states that on the 12th May 2016 when the matter came before Gilligan J. in a directions list, he gave certain

directions in relation to the filing of a replying affidavit by the defendants, and any further affidavit that the appellant might wish to

file in response. It appears that on the 12th May 2016 Gilligan J. directed also that all three motions would be listed for hearing on the

7th July 2016, but that the motion seeking an interlocutory injunction in the present proceedings would be heard first. Procedurally

that is how the injunction motion came to be heard by Mr Justice O’Connor on the 7th and 8th July 2016. The order of the High Court

dated 12th July 2016 refusing injunctive relief makes no reference to the other two motions before the Court at that time, namely the

consolidation motion and the motion to add defendants. However, counsel for the respondents has informed this Court (and it was not

disputed by the appellant) that Mr Justice O’Connor refused to consolidate the 2012 proceedings with the present proceedings since

not only were different issues raised, but different defendants were named. Following the refusal of the injunctive relief, the trial

judge gave liberty to the plaintiff to deliver a statement of claim in the present proceedings during the long vacation, and urged that

the 2012 proceedings be progressed. In passing I would draw attention to the fact that even by the date on which this appeal came

on for hearing in this Court no statement of claim in the 2012 proceedings had been delivered.

9. I refer to the fact that the 2012 proceedings have not been consolidated because the plaintiff on this appeal has sought to argue

a ground of appeal against the refusal of the interlocutory injunction that was not argued before the trial judge on the application for

an interlocutory injunction. That issue relates to a contention that in relation to the Ulster Bank borrowings (later transferred to

Promontoria) she is properly to be considered a “consumer” for the purposes of the Consumer Credit Act, 1995, and therefore is

entitled to the protections afforded to such a consumer borrower by certain provisions of that Act, and that these have been denied

her, specifically those provided by s. 54 of the Act whereby no enforcement action may be taken against the consumer borrower

unless 10 days prior notice is given. Reliance is placed also upon s. 40 of the Act which provides that where a creditor’s rights under a

loan agreement have been transferred to a third party, the consumer shall be entitled to plead against the third party any defence

that would have been available to her against the original creditor. She says that she received no such notice as required by s. 54,

and that therefore the actions by Promontoria by way of appointing receivers over her property is unlawful, and that any action by

them ought to be restrained by way of interlocutory injunction pending determination of the issue as to whether or not she is properly

to be considered to be a consumer for the purposes of the Act.

10. As I have said, that issue was not argued before the trial judge. Counsel for the appellant has on this appeal accepted that it was

not argued in the High Court. The trial judge did not therefore have to consider, because he was not asked to, whether a fair issue

was raised as to whether the enforcement action taken by Promontoria by the appointment of the receivers was unlawful by reason

of s. 54 of the Act, and whether an injunction ought to be granted given the argument that the Clondalkin premises now comprised

her home even if it was not her home at the date of the May 2007 loan facility letter, and was the place from which she earned her

livelihood (i.e. a pizzeria). It follows that the trial judge was not required to have regard to the possibility that if she was denied an

injunction but was successful at the substantive hearing of her proceedings, the loss of her home, and the premises from which she

derives an income, was something that could not be adequately compensated for by an award of damages, and therefore that the

balance of convenience lay in favour of the granting of an interlocutory injunction.

11. On this appeal counsel for the appellant conceded that it was not permissible to argue an issue on appeal that was not argued in

the Court below. While that concession was undoubtedly made, and the respondents in any event so contended, I should mention in

passing that while the consumer issue was not argued as part of the injunction application itself there was, according to the

transcript for the 12th July 2016, an oblique reference to it during submissions made to the trial judge after he had delivered his ex

tempore judgment. On that occasion counsel for the appellant was responding to an application for the costs of the injunction

motion. When arguing that the trial judge ought to exercise his discretion by not awarding costs against the plaintiff, it was submitted

that although the application for an injunction had been unsuccessful the trial judge should have regard to the issue raised as to

breaches of the Markets in Financial Instruments Directive Regulations (MiFID) which are relied upon in the 2012 proceedings. Counsel

submitted that there was an important public interest to those claims being made by the plaintiff, such that costs ought not to be

awarded against her even though she was unsuccessful in her application for injunctive relief. The trial judge in his ex tempore

judgment made reference to the submission by counsel for the defendants that the plaintiff was seeking to conflate the interest swap

agreement which was the subject of the 2012 proceedings, with the mortgage forming the security for the loans themselves, and

which was the subject of the present application to restrain the receivers from taking possession. Counsel for the plaintiff is recorded

in the transcript as submitting the following in relation to the question of costs:

“ … So while we accept that we have lost … we are not getting the injunction, we do ask the court to consider that we

still think we had an important interest in this matter, and in that this was a hedge on a consumer loan, which was to

MiFID [sic per transcript] -- now I don’t want to go back over what was said the other day, but … it has implications for

banking in this country and implications for consumer rights [emphasis provided]. So I would ask you to consider that,

Judge. … Regarding the question of damages not being an adequate remedy, once the family home is sold it cannot be

restored, if it is sold.”

12. On 10. When expressing his conclusions in relation to costs, the trial judge stated, inter alia:

“As for the issues about whether the hedge agreement has implications for consumer rights, it really does fall within the

remit of the plenary hearing of the 2012 proceedings in particular for that to be determined, and the court would urge Ms

Gibb and her legal advisers to press on with those proceedings.”

13. I have described these references to “consumer” as oblique. That is so. The issue under the Consumer Credit Act was not

addressed by the trial judge, for the very reason that it was not argued before him on the injunction application. Indeed, it appears

that prior to giving his decision the trial judge requested the parties to prepare short written submissions on the issues that required

to be decided. This was with a view to clarifying precisely what were the relevant issues being relied upon, given the plethora of

affidavits filed in various proceedings and in relation to different motions. Such written submissions were provided as requested, and

this Court has had the benefit of seeing those written submissions. That is particularly helpful in circumstances where counsel now

appearing for the appellant was not the counsel who argued the appellant’s case in the High Court.

14. The appellant’s written submissions dated 7th July 2016 referred to three issues being relied upon:

(a) The interest issue under the interest swaps.

(b) Defects in the assignment of the debt to Promontoria in reliance on the requirements of s. 28 (6) of the Supreme

Courts of Judicature Act 1877;

(c) Further defects in the assignment of the debt (unspecified), and the question of whether or not the Clondalkin

property was the appellant’s home.

15. It is clear that the argument now sought to be made in relation to the appellant being a consumer for the purpose of the

Consumer Credit Act was not advanced, even though, as was pointed out by the respondents in their written submissions to the High

Court, an affidavit sworn by the appellant in her 2012 proceedings against Ulster Bank Ireland Ltd on the 14th March 2016, at para.

29 thereof, refers to the Consumer Credit Act applying in relation to an earlier loan facility dated 17th July 2002. That particular

facility was replaced by the later facilities, and does not form part of the present proceedings in any event. But the question I am

presently addressing is whether the issue being put forward now on this appeal by reference to her being a consumer for the purposes

of that Act, which is in truth the only substantive argument now being advanced on this appeal, should be permitted to be argued

where it was not relied upon in the High Court, and arguably at least was abandoned given the reference to the Consumer Credit Act

in the affidavit just referred to.

16. I have referred to the fact that counsel for the appellant on his feet conceded that he was not permitted to argue a new ground

on appeal. That itself should be sufficient for this Court to exclude this new ground from this appeal. Nevertheless despite that

concession arguments were advanced before this Court. Counsel for the respondents has raised an objection in that respect, but

nevertheless dealt with the new issue on its merits by way of replying submissions.

17. I am conscious of the fact that the traditional approach to the question of whether a ground not argued in the High Court could

be advanced on appeal was that stated by Henchy J. in Movie News Limited v. Galway County Council (unreported), Supreme court,

15th July 1977, namely that only in an exceptional case ought that to be permitted, since it effectively deprives the other party of a

right of appeal to which he/she has a constitutional entitlement.

18. Nevertheless there have been some developments in more recent times which bear reference. In his judgment in Lough Swilly

Shellfish Growers v. Bradley [2013] 1 IR 227, O’Donnell J. stated at para. 28:

“There is a spectrum of cases in which a new issue is sought to be argued on appeal. At one extreme lie cases such as

those where argument on the point would necessarily involve new evidence, and with a consequent effect on the

evidence already given (as in K. D. (otherwise C) v. M.C. [1985] I.R. 697) for example); or where a party seeks to make

an argument which was actually abandoned in the High Court (…) or, for example where a party sought to make an

argument which was diametrically opposed to that which had been advanced in the High Court and on the basis of which

the High Court case had been argued, and perhaps evidence adduced. In such cases leave would not be granted to argue

a new point on appeal. At the other end of the continuum lie cases where a new formulation of argument was made in

relation to a point advanced in the High Court, or where new materials were submitted, or perhaps where a new legal

argument was sought to be advanced which was closely related to arguments already made in the High Court, or a

refinement of them, and which was not in any way dependent upon the evidence adduced. In such cases, while a court

might impose terms as to costs, the court nevertheless retains the power in appropriate cases to permit the argument to

be made.” [Emphasis provided]

19. In the present case I would not consider that the Consumer Credit Act argument was abandoned in the High Court in any

deliberate fashion. However, there was undoubtedly some reference to the Consumer Act in the appellant’s second affidavit sworn in

March 2016 in the Ulster Bank proceedings and in the context of an earlier loan facility in 2002 which certainly suggests that some

consideration had been given to the implications of that Act for the ability of the respondents to take enforcement action. One way

or another it was not an argument advanced.

20. This is not a case which lies at the first extreme of cases referred to by O’Donnell J. above. It requires no new evidence to be

adduced since it is essentially a new legal issue grounded upon the evidence already put on affidavit. But neither is it a new

formulation of an argument made in relation to a point advanced in the High Court, or where any new materials have been advanced,

or where it is simply a refinement of arguments made in the High Court. It is not therefore within the type of examples which O’Donnell

J. considered to be at the other end of the continuum where the Court might, albeit on terms, permit the new ground to be argued on

appeal. I appreciate, of course, that the situations to which O’Donnell J. referred were simply examples of some differing situations

that can arise. The present case is just one more such example.

21. I would refer also to the judgment of Hogan J. in this Court in Arnold v. McCarthy [2017] IECA 303 where he considered this

question on the facts of that case which are very different. During the course of his judgment Hogan J., having referred to Lough

Swilly, referred also to the judgment of McMenamin J. in Westlink Toll Bridge Ltd v. Commissioner of Valuation [2013] IESC 42. In that

judgment an entirely new ground was sought to be argued in relation to the deductibility of the costs of motorway maintenance for

the purpose of a rateable valuation, which McMenamin J. considered to be the “polar opposite” of the evidence that had been led in

the High Court.

22. However, in Arnold, Hogan J. concluded that a new ground ought to be allowed on account of what he considered to be three

important circumstances which were evident on the facts of Arnold. The question arose on an appeal from a refusal of leave to seek a

judicial review arising from a conviction in the District Court for which a fine was imposed, but where if that was not paid, a prison

sentence had been imposed in default of payment. Secondly the applicants for leave were litigants in person. A third factor identified

was that the proceedings were still at a preliminary stage, namely that leave had yet to be granted. In that regard, Hogan J. stated:

“Critically, therefore there has been no final determination of the merits of the application by the High Court. The

considerations which weighed so heavily in cases such as Lough Swilly and Westlink Toll have lesser application in the

present circumstances: to date there has been no full hearing on the merits before the High Court and if leave were

granted in respect of this issue, the Attorney General and the other State respondents would all have an opportunity to

meet the case on its merits at a full hearing in the High Court.”

23. Hogan J. referred also to the judgment of Clarke J. (as he then was) in Moylist Construction Ltd v. Moylan [2016] 2 I.R. 283

where the appeal was against an order that had been made to dismiss the plaintiff’s proceedings as being bound to fail. On the

question of a new ground being sought to be argued for the first time on that appeal, Clarke J. stated at p. 293:

“It is clear that some additional leeway may properly be given on appeal to a party who is faced with being deprived of

what might otherwise be their entitlement to a full trial … The fact that a plaintiff may be deprived of a full hearing should

any appeal result in a decision that the proceedings should be dismissed means that the court may in some circumstances

be prepared to give greater latitude to such a plaintiff to argue further grounds on appeal.”

24. Arnold is very different on its facts to the present case, and none of the factors upon which Hogan J. relied therein are applicable

in the present case. There was a hearing on the merits in relation to the application for an interlocutory injunction. The appellant was

represented by solicitor and counsel, and therefore not handicapped or disadvantaged by being a personal litigant. Also, there is no

real risk of imprisonment as there was in Arnold. The most that can be said is that if not allowed to argue the new ground, the

receivers will be in a position to act on foot of their appointment, and gain possession of the premises, presumably prior to the hearing

of the appellant’s substantive proceedings should she decide to pursue them to a hearing. Should she prevail at such a hearing, she

will achieve an award of damages, and the Court, when assessing such damages, would be entitled to take account of the fact that

the appellant had been unlawfully removed from her home, if it is proven to have been her home at the relevant time.

25. I do not consider that the issue now sought to be argued before this Court should be permitted to be argued, it not having been

argued in the court below. There is no good reason provided for not having argued it. One is left with the feeling that it is an issue

that was not considered at the time to be an issue in the case, despite the reference to the Act in the second affidavit of the

appellant. The Court should be slow to permit a new issue to be argued in such unexceptional circumstances. In my view the

circumstances of the present case lie at the extreme of the spectrum of cases to which O’Donnell J. referred in Lough Swilly where

the Court would refuse leave. This is not a case where the issue now sought to be raised is such that it is clearly a winning point. If

the overlooked issue was of such weight that the Court could see that in all probability it would succeed, it might consider that as an

exception to the normal rule, it should be permitted to be argued since to exclude it was likely to inflict a manifest injustice. It could

permit its introduction with appropriate orders as to costs or other conditions as may be appropriate.

26. But the issue in the present appeal is not such an issue. The respondents have argued that the issue is tenuous, and flies in the

face of some of the documentary evidence. I agree that there are significant arguments to be made against the appellant’s case that

she is to be considered to be a consumer for the purpose of that Act, based on the documentary evidence. In saying that I also have

regard to the evidence put forward by the respondent’s against the appellant’s case that the Clondalkin premises is in fact where she

is living. But I reach no concluded view on that matter of course. But it is in my view possible to form a view as to whether the issue

reaches the point of being a “fair issue”, and whether it should be considered also in the weighing of the balance of convenience. In

my view the appellant would face a difficult task in achieving success by arguing that the owners of her loans are not entitled to

recover their debt for the reasons urged by the appellant in these proceedings.

27. I would also have regard to the fact that even if at trial the appellant was successful by obtaining a decision that she was a

consumer, and that Promontoria was in breach of its obligations as to notice under s. 54 of the Consumer Credit Act, it would

ultimately not avail the appellant since presumably in the light of the Court’s finding it would simply mend its hand, and recommence

its enforcement action having given such notice to the appellant. It must be borne in mind that whatever about any issue as to the

amount of interest payable, there can be no dispute that having borrowed the money the appellant is liable to repay the principal. In

that regard it is worth noting again that it is not disputed that she has ceased making any repayments, either interest or principal.

28. I would refuse to allow the new issue to be raised for the reasons stated, and refuse the appeal on that ground alone, since

counsel accepted that it was in reality the only issue being advanced on this appeal. To the extent that in any event the new issue

was argued during the course of the hearing in this Court, I would equally disallow the appeal as I do not consider that the issue

under the Consumer Credit Act amounts to a fair issue to be tried as that phrase is to be understood in the context of an

interlocutory injunction application. In addition, I am of the view that damages are an adequate remedy for the appellant, and even if

I was incorrect to so conclude, I do not consider that the balance of convenience should be considered to lie in favour of an

injunction on account of the fact (which is disputed) that the Clondalkin premises is where the appellant is now living and from which

she says she derives a livelihood, particularly where no effort is being made by the appellant to make any payments whatsoever

whether in respect of principal or interest. It would be an injustice to the respondents to injunct them from taking any further

enforcement action pending the eventual hearing of these proceedings, which, I would add, the appellant has shown no inclination to

progress in an expeditious fashion. Indeed, it is worth remarking that in the period between the decision of the High Court and the

hearing of this appeal, it would have been reasonably possible for the appellant to have had a substantive hearing of the case in the

High Court had she been of a mind to progress the proceedings to conclusion, notwithstanding that she was awaiting a hearing of this

interlocutory appeal.