Injunction granted for farmland sale pending trial; injunction refused for commercial forestry lands due to damages adequacy.

APPROVED [2025] IEHC 245

THE HIGH COURT

Record No.: 2024/4575 P

BETWEEN:

MICHAEL WALSH and ALICE MULLINS Plaintiffs

-and-

EVERYDAY FINANCE DAC t/a LINK FINANCIAL and KEN TYRELL Defendants

JUDGMENT of Mr Justice Rory Mulcahy delivered on 30 April 2025

Introduction

1. The plaintiffs own five plots of land, four in Cork, one in Clare (“the Properties”).

Two of the plots of land comprise farmland, currently being farmed by the plaintiffs. The other three plots of land are commercial forestry. The first defendant is registered as owner of a legal charge over all five Properties, pursuant to mortgages executed between the plaintiffs and AIB Bank plc, the benefits of which have been assigned to the first defendant.

2. The plaintiffs are in default in repaying the loans for which the mortgages had been given as security. The first defendant contends that the benefit of the loans has also been assigned to it and, in light of the plaintiffs’ default, they are entitled to sell the Properties pursuant to the powers under the mortgages. The second defendant, the receiver appointed over each of the Properties pursuant to the mortgages, has offered the Properties for sale

NO REDACTION REQUIRED through an online auction website. In this application, the plaintiffs seek to restrain any sale of the Properties pending determination of the proceedings.

3. For the reasons set out below, I have concluded that, subject to certain conditions, the plaintiffs are entitled to an interlocutory injunction restraining the sale of the two plots of farmland. However, the plaintiffs are not entitled to an interlocutory order restraining the sale of the forestry lands.

Background

4. By facility letter dated 25 September 2009 (“the Loan Offer”), AIB Bank plc (“AIB”)

offered various loan facilities to the plaintiffs by way of refinancing or amalgamation of existing facilities, together with an overdraft account. The Loan Offer was made up of seven separate facilities (“the Loans”). Under the terms of the Loan Offer, the security for these facilities was to be ‘all sums’ mortgages over the five folios in which the plots of land the subject of these proceedings are comprised (“the Mortgages”), together with two further all sums mortgages over unrelated properties.

5. The Loan Offer was accepted by the plaintiffs in writing on 8 December 2009. Three of the Mortgages were existing mortgages at the date of the Loan Offer, two further mortgages were executed in November 2009.

6. On 2 August 2018, by a global deed of transfer (“the first Deed of Transfer”), AIB transferred its interest in the Loans and the Mortgages the subject of these proceedings to the first defendant. On 8 July 2021, the first defendant sold its interest in the Loans and the Mortgages back to AIB.

7. However, on 4 October 2022, the interest in the Loans and the Mortgages was again transferred to the first defendant by a further global deed of transfer (“the second Deed of Transfer”).

8. In respect of each of these three transfers, the buyer and seller sent the plaintiffs the necessary ‘hello’ and ‘goodbye’ letters required by section 28(6) of the Supreme Court of Judicature Act 1877.

9. In his affidavit grounding the application, the first plaintiff admits that the plaintiffs fell into arrears in repaying the Loans and that a meeting was held with AIB in November 2013 to discuss their indebtedness. A period of negotiation took place, which proved unsuccessful. By letters dated 10 and 11 September 2014, AIB demanded repayment of all sums then due. Summary summons proceedings were issued by AIB in 2016 (AIB Bank plc v Michael Walsh and Alice Mullins, Record No.: 2016/466S) but have not been progressed.

10. Following notification that the Loans and Mortgages had been assigned to the first defendant for a second time, the plaintiffs sought to engage with the first defendant, however there was no resolution regarding their indebtedness. It is not disputed that the plaintiffs have made no payment in respect of the Loans since 2018. By letters dated 22 February 2024, the first defendant, through its agent, BCM Global ASI Limited, made a formal demand for repayment of the sums of €1,811,375.51 and $330,934.17 said to be owing on foot of the Loans.

11. On or about 4 April 2024, the second defendant, who had been appointed as receiver over the Properties following the first transfer to the second defendant, was discharged as receiver. He was, however, by further deed of appointment of the same date, once again appointed as receiver over the Properties. The plaintiffs contend that they have had no contact from the second defendant since he notified them of this re-appointment. The letter notifying the plaintiffs of his appointment is dated 4 March 2024, but as it refers to his discharge and re=appointment, the letter would appear to be incorrectly dated. The plaintiffs have not made any issue of this discrepancy.

12. Notably, one of the mortgages pursuant to which the second defendant was appointed as receiver charges not just farmland but also the family home. The second defendant’s appointment pursuant to that mortgage expressly excludes the family home from its scope.

13. The second defendant was also appointed to provide certain services as agent of the first defendant pursuant to an agency agreement. The agency agreement expressly excluded services undertaken by the second defendant in his capacity as receiver. It did, however, include services relating to the maintenance, and the marketing and contracting for sale, of certain assets, including the five properties the subject of this application.

14. Each of the Properties was offered for sale by the second defendant in his capacity as agent of the first defendant in an online auction at 4 pm on Wednesday, 28 August 2024. The listing for each property gives a brief description and an advised minimum value (“AMV”). The total AMV for the two plots of farmland was stated to be €830,000, and the total AMV for the forestry lands was €515,000.

15. By way of example, the description of one of the parcels of farmland refers to it as “excellent quality lands”, gives its location, and continues as follows:

“The lands are contained within folio CK68271F Plan 3 and amount to c. 33.18 ha – c.

81.98 acres. The subject lands are in one irregular shaped block with mature boundaries to include the river Black Brook. They are laid out in 10 manageable divisions and have the added benefit of an internal farm road. The lands are all in grass of excellent quality suited to most farming enterprises. Contained within the lands is a large farm yard with a number of agricultural buildings. Good road frontage onto a minor road.

Ideal location for a one off house, subject to planning.

The lands are being sold as seen and are not subject to planning.”

16. The descriptions given for the parcels of forestry land are each in similar terms. Each parcel is described as having “excellent potential”. The area of land is given. Two of the parcels are described as “forestry plantation”, one as “mature forestry”. Two of the descriptions identify that access to the lands is from a minor road. One describes the land as being “bound by natural hedging and some fencing. Good road frontage.”

17. The plaintiffs aver that they became aware of the auction through a third party on 8 August 2024, that they were not advised of the auction by the second defendant, nor has he ever sought access to any of the Properties.

18. By letter dated 19 August 2024, the plaintiffs’ solicitor wrote to the second defendant calling on them to remove the Properties from auction. The second defendant’s solicitor replied on 21 August 2024, stating that the Properties would proceed to auction. The letter stated as follows:

“As your client is aware our client’s appointment as receiver of the Properties took effect on 4 April 2024. Please note your clients ceased to have any interest in the Properties from that date. There is no obligation on our client to advise your clients of the assets proceeding to auction.”

19. The plaintiffs’ solicitor again wrote to the second defendant’s solicitor on 23 August 2024, calling on the second defendant to remove the Properties from auction, threatening proceedings, including injunction proceedings, should they fail to do so. It appears that there was no reply to this letter.

20. On or about 26 August 2024, the plaintiffs issued the within proceedings and sought and obtained short service of a motion seeking an injunction to restrain the defendants from selling, marketing, advertising for sale or taking any step to advance the sale of the Properties. On the return date, 27 August 2024, the defendants undertook not to proceed with the auction. The matter was adjourned from time to time to allow for the exchange of affidavits. The application for an interlocutory injunction the subject of this judgment was heard by me on 28 March 2025.

The plaintiffs’ case

21. In the plenary summons issued on 26 August 2024, the plaintiffs seek declarations that the manner in which the defendants have prepared, marketed and intend to sell the Properties is in breach of their duties as mortgagee and/or receiver. They seek an injunction restraining the defendants from selling the properties in breach of their duties, and damages for negligence, breach of duty and interference with their property rights in respect of any loss suffered by virtue of the sale of lands.

22. At the conclusion of the hearing of the injunction application, the plaintiffs provided a draft of an amended plenary summons. The amended summons includes claims that the first defendant is not the owner of the Mortgages and the Loans the subject of these proceedings on the basis that the Mortgages and Loans have not been validly transferred to the first defendant, and seeks declaratory orders that the second defendant has not been validly appointed. The amended draft had not been provided to the defendants in advance of the hearing and, unsurprisingly, they were not in a position to consent to the proposed amendment. Any application to amend will, therefore, have to be the subject of a separate application.

23. The parties are agreed that, in general terms, the principles applicable to applications for interlocutory injunctions are as set out in Merck, Sharp & Dohme Corporation v Clonmel Healthcare Limited [2019] IESC 65, [2020] 2 IR 1, where the Supreme Court identified a series of steps which might be of assistance in deciding whether an injunction should be granted. The issues for the court to consider in determining whether to grant the injunctions sought are, therefore, well established: whether the plaintiffs have identified a serious issue to be tried, and, if so, where does the balance of convenience or balance of justice lie. In determining where that balance lies, the question of whether or not damages are an adequate remedy will be the most significant factor.

The arguments

24. The plaintiffs advanced three arguments in support of the injunction, each of which they contend amounts to a serious issue to be tried.

25. First, they complain that the manner of sale proposed by the defendants will result in the Properties being sold at a significant undervalue. They note that the defendants are selling without vacant possession, which will necessarily depreciate the price achievable.

Moreover, they say that a sale of the type proposed is most unusual for farming or forestry lands, highlighting the failure of the defendants to survey the lands or provide prospective purchasers with the opportunity to do so. They exhibit a valuation from a local auctioneer who values the Properties at €2,840,000, more than double the AMV proposed by the defendants. They have also provided an affidavit from an agricultural adviser which details the “usual practice” when selling farmland by auction, and also what information a “prudent buyer” would expect to receive when buying forestry lands. It is claimed that the proposed method of sale departs materially from the usual practice and that inadequate information has been provided to prospective buyers. The plaintiffs contend that the proposed auction on the basis of limited information about the Properties is not the best means to realise the maximum return in any sale.

26. During the course of the hearing, counsel for the plaintiffs referred to a letter which the plaintiffs had received containing an offer to purchase the forestry lands. The plaintiffs indicated their willingness to put this evidence on affidavit but the defendants indicated that they were happy for the court to accept the letter into evidence without that necessity. The offer, it appears, had been procured after the plaintiffs placed the forestry lands with an agent for the purposes of offering them for sale. That agent prepared a prospectus for sale, and a number of offers were received. The highest offer was €1,075,000 for the three parcels of forestry land.

27. In light of this evidence, and the first plaintiff’s own evidence regarding how he would expect farmland to be sold, the plaintiffs contend that the proposed manner of sale constitutes a clear breach of the defendants’ duties to secure the best price reasonably obtainable for the Properties. In this regard, they rely on established principles, including the decision of the Supreme Court in Holohan v Friends Provident and Century Life Office [1966] IR 1, which was recently cited in O’Hagan v Harper and Anor [2024] IEHC 410, a case referred to in both parties’ written submissions. In O’Hagan, the court (Kennedy J) summarised the legal position:

“9. There was no dispute as to the receiver’s duty to obtain the true market value on the sale of a mortgaged property, often referred to as the “Cuckmere test”. In Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 (“Cuckmere”), at pp. 968-969, Salmon L.J. held that: “a mortgagee in exercising his power of sale does owe a duty to take reasonable precaution to obtain the true market value of the mortgaged property at the date on which he decides to sell it. No doubt in deciding whether he has fallen short of that duty the facts must be looked at broadly, and he will not be adjudged to be in default unless he is plainly on the wrong side of the line.”

10. In Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410 (“Chartered Bank”), Lord Denning cited Cuckmere as establishing the receiver’s duty to the mortgagor to use reasonable care to obtain the best possible price when selling a mortgaged property: “He owes a duty to use reasonable care to obtain the best possible price which the circumstances of the case permit.”

28. On the question of whether the duty had been breached in any given case, the court said as follows:

“41. Holohan clearly supports the position that, where practical steps can reasonably be undertaken which would have an appreciable impact on the purchase price, a receiver would be expected to undertake them. The question of whether the receiver is required to take any particular steps will depend on the circumstances. The greater the time, cost and risk involved the more reluctant the Court will be to impose such an obligation. However, if there are relatively simple, reasonably expeditious and relatively inexpensive steps which could significantly improve the outcome, then a receiver may need to explain a decision not to pursue such an option (and Holohan and Harte provide useful counterpoints in this regard).”

29. For the purpose of establishing that they have identified a serious issue to be tried regarding breach of that duty, the plaintiffs refer to Hennessy v Tyrell and Everyday Finance DAC [2022] IEHC 109, a case concerning a proposed sale which the plaintiffs contend had the same deficiencies as that proposed by the same defendants in this case. In Hennessy, the court (Allen J), in concluding that the plaintiffs had established a fair question to be tried regarding the mode of sale, stated:

“24. What tips the balance in this case is the apparent suddenness of the decision to sell; the absence, as far as the evidence goes, of any previous demand for possession;

and the absence of any meaningful marketing of the land.”

30. Second, the plaintiffs contend that the second defendant’s appointment as receiver over one of the properties involved is defective. The relevant deed of appointment appoints the defendant as receiver over ‘ALL THAT AND THOSE, the Property more particularly comprised in Folio 68271F of the Register of Freeholders County Cork (excluding Plan 32 and Plan C4A32).’ However, the deed of mortgage pursuant to which the second defendant was appointed describes the mortgaged property as ‘ALL THAT AND THOSE all of the property comprised in Folio 68271F of the Register of Freeholders County of Cork.’ The plaintiffs accept that the portion of Folio 68271F excluded from the scope of the second defendant’s appointment is the portion comprising their family home and an access road between the family home and the public road. However, by reference to The Merrow Limited v Bank of Scotland plc and David O’Connor [2013] IEHC 130, they contend that a receiver can only be appointed in accordance with the terms of the mortgage deed and, therefore, can only be appointed over the entirety of the property described in that deed, and that it is not permissible to appoint a receiver over part only of that property. They speculate that the purpose of the exclusion of the family home from the scope of the second defendant’s appointment, and therefore the proposed sale, was to enable the first defendant to avoid having to show compliance with the Code of Conduct on Mortgage Arrears (“the CCMA”).

31. The final point relied on by the plaintiffs is that the documentation relied on by the defendants does not establish that the interest in the Loans and Mortgages has been transferred to the first defendant. They contend that confusion has arisen because of the multiple transfers between AIB and the first defendant. In this regard, the plaintiffs did not point to any confusion arising from the first or second Deeds of Transfer or dispute that the registration of the first defendant as owner of the relevant charge in respect of each of the Properties constituted conclusive evidence of that ownership. Rather, the plaintiffs contend that, by reference to the ‘hello’ and ‘goodbye’ letters sent by AIB and the first defendant, there was no clear correlation between the loan accounts purported to be transferred from AIB to the first defendant, back to AIB, and then back to the first defendant.

32. The plaintiffs admit that the Loans the subject of these proceedings are commercial loans and acknowledge the observations of the Supreme Court in Merck, Sharp & Dohme that, in commercial cases, courts should be robustly sceptical of a claim that damages are not an adequate remedy. As expressed in Ryan & Anor v Dengrove & Anor [2021] IECA 38 (at para. 1):

“Generally in a purely commercial dispute of this kind where the parties’ interests are exclusively financial, the law adopts the position that they are best left to their respective remedies in damages. The cases of this kind in which there is a particular factor tilting the balance in favour of the claimant such as would justify the making of orders restricting the creditor’s freedom of action pursuant to agreed security instruments, tend to be the exception.”

33. The plaintiffs, however, contend that their position is distinguishable from purely commercial disputes because the case concerns farmland which the plaintiffs are currently working and which provides their income. The first plaintiff avers that he is a dairy farmer and has been farming the farmland with his father since he was 16, some 45 years ago. The herd size has more than doubled since he took over the farm, and he has invested significant time and resources in upgrading it. The lands are directly connected to the family home, and the principal (though not sole) access to the lands is by way of an entrance from the family home. Dairy farming provides the plaintiffs’ livelihood, and the Properties are the only farmland they own. They support their two sons, who they hope will inherit the farm.

34. The defendants refer to Nihill v Everyday Finance DAC and Ors [2022] IEHC 484, a case with some similarities to this. In that case, the court (Dignam J) granted an injunction restraining the defendants (again, as it happens, the same defendants as in these proceedings, together with the online auction company being used here) restraining the sale of farmland by the defendants. In that case, the court found that the plaintiff hadn’t met the evidential burden of establishing an arguable case that there was a breach of duty by the defendants in selling the lands at an undervalue. However, having identified a serious issue to be tried on another ground, the court found that the balance of convenience lay in favour of granting the injunction:

“84. Point 5 in Merck Sharpe & Dohme requires that “In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy.” The starting point is that the Plaintiff’s farm is a business. Indeed, the covering letter with the facility letter describes the loan as a “Business Loan” and the facility letter contains special conditions requiring the provision by the Plaintiff of information with regard to the construction of a wind turbine on the lands and requiring the provision of audited accounts. However, in my view it would be artificial for the Court to proceed on the basis that a farm of this size was a purely commercial enterprise. For very many farmers in Ireland, while farming is a commercial enterprise, it is also a way of life with strong emotional and historic bonds to the specific lands and therefore often cannot be considered as a pure commercial entity. Limited regard can be had to this in this particular case where there is no specific evidence as to the nature of the farm or the Plaintiff’s connection with these specific lands. By contrast, for example, in Doran v Charleton & Dolliver [2022]

IEHC 331 the evidence was that the Plaintiff had farmed the particular lands for fifty years and they had been in his family for longer than that. Nonetheless, I think I can properly consider that the lands/farm is not a purely commercial enterprise and therefore while I must continue to have regard to the fact that there is a significant commercial element to the enterprise, the scepticism with which I must approach the claim that damage would not be an adequate remedy should be slightly lessened.”

35. The more recent judgment in Philpott & Anor v Pepper Finance Corporation (Ireland)

DAC & Anor [2025] IEHC 199 is to similar effect. In granting an injunction restraining the sale of property by the defendants, the court (Stack J) considered that those proceedings, in relation to a family farm, were “entirely distinguishable on the facts” from the type of transactions which were the subject of Murray J’s observation in Ryan v Dengrove:

“78. Clearly, this property is of intrinsic value to its occupier. It is a family farm inherited by the first plaintiff from his father (who also seems to have inherited it) and which has been farmed by the first plaintiff for decades and on which the first plaintiff no doubt relies for at least part of his livelihood. It is not a commercial investment property or a property in which the interest of the plaintiffs is ‘exclusively financial’.”

The defendants’ position

36. The defendants contend that the plaintiffs have not made out an arguable case that they are in breach of duty to the plaintiffs in seeking to sell the properties. They contend that, as in Nihill, the plaintiffs have not met the required burden of proof that there is a serious issue to be tried. In this regard, they note a curious position with the plaintiffs’ evidence. Despite having a valuation for the Properties, the valuer has not sworn an affidavit. The agricultural adviser who has sworn an affidavit is not an expert in valuations or the sale of property and, in any event, is not independent, as the adviser, on her own evidence, is someone who has been providing advice to the plaintiffs for more than twenty years. They point out that the fact that the auction indicates an AMV for each of the Properties does not mean that that is the price that will be achieved. Further, they argue that the plaintiffs can not rely on their

own occupation of the Properties when criticising the defendants for selling without vacant possession.

37. Similarly, the defendants say that there is no arguable case and no basis identified for disputing that AIB’s interest in the relevant loans has been transferred to the first defendant.

38. They dispute that there is any requirement that a receiver be appointed over the whole of the property the subject of the instrument pursuant to which that receiver is appointed and point out that the plaintiffs have provided no authority in support of their proposition on this issue.

39. The defendants contend that even if there is a serious issue to be tried, as these are commercial transactions where the main complaint is that the properties are being sold at an undervalue, damages will clearly be an adequate remedy and, moreover, will be readily calculable. By contrast, they say that the plaintiffs’ undertaking as to damages is of little comfort in circumstances where they have been unable to discharge their liabilities. In all the circumstances, they say, the injunctions sought should be refused.

Discussion

i. Issue to be tried

40. The main argument advanced by the plaintiffs – and the only claim reflected in their plenary summons – is that the proposed sale by the defendants is likely to be at an undervalue and, therefore, is in breach of their duties as mortgagee and as receiver respectively. Although I accept that the defendants may well be able to establish at trial that they have discharged their duties, and there may be good reason that they are seeking to advance the sale of the Properties in the manner chosen, I have no doubt that the plaintiffs have established an arguable case that the proposed method of sale breaches the defendants duty to take reasonable care to obtain the market value for the Properties. The evidence, such as it is, is all one way.

41. The evidence suggesting that the defendants propose to sell at an undervalue may not be compelling, but it cannot be disregarded. The plaintiffs have exhibited a valuation that, on its face, values the Properties at more than twice the AMV being proposed by the second defendant for the auction. True, that valuation may – it is not clear – have been prepared on the assumption of vacation possession, and, since the valuer has not sworn an affidavit, it is clearly hearsay. However, hearsay evidence can be admitted in an interlocutory application. In Lowe v Burns [2012] IEHC 162, an application for an injunction by a receiver, the court (Laffoy J) observed as follows:

3.6 I am satisfied that it is proper for the Court to rely on the hearsay evidence contained in the plaintiff's affidavit. As is pointed out in Delany and McGrath on Civil Procedure in the Superior Courts (3rd Ed.) at para. 20-70, Order 40, rule 4 of the Rules of the Superior Courts 1986 lays down the important principle that, except on interlocutory applications, an affidavit should be confined to facts within the first hand knowledge of the deponent. In relation to an affidavit sworn in an interlocutory application, the authors state as follows at paras. 20 - 71:

“In an affidavit sworn in relation to an interlocutory application, it is permissible to include hearsay, this is to say, averments of facts that are not within the knowledge of the deponent. Indeed, it appears that it is possible for a deponent to give second-hand hearsay evidence whereby he avers that he has been informed of something by X who in turn has been informed by Y. However, rule

4 requires that the grounds for the belief stated by the deponent must be given.”

42. The relevant passage from the fifth edition of that text now reads (at 21-90):

“It is, however, permissible to include hearsay, this is to say, averments as to facts that are not within the knowledge of the deponent, in an affidavit sworn in relation to an interlocutory application. Not only is this expressly provided for in Order 40, rule 8, it reflects long-standing practice. In F&C Reit Property Asset Management plc v Friends First Managed Pension Funds Ltd, Murphy J held that (what is now) rule 8 does not give an automatic entitlement to adduce hearsay evidence on interlocutory applications but rather gives the court a discretion to admit it. That was also the view of Edwards J, delivering the judgment of the Court of Appeal in Fennell v Slevin. He went on to say that this discretion must be exercised judicially on a case-by-case basis, with the court being assiduous to ensure that no unfairness would ensue to an affected party by relaxation of the rule against hearsay.”

43. No conceivable unfairness would ensue if the court had regard to the valuation in this case. The defendants have had ample opportunity to consider it and, if they chose, to put forward their own valuation evidence. They have elected not to do so. Indeed, it is notable that the second defendant has not sworn an affidavit in this application at all, and has chosen not to explain his approach to the sale of the Properties. It is not necessary to draw inferences from the defendants’ failure to adduce that evidence, although it would be permissible to do so, to conclude that the plaintiffs have made out an arguable case on the basis of the valuation alone that the proposed sale is at an undervalue. That, however, is not the only evidence relied on by the plaintiffs.

44. They also rely on the affidavit evidence of the agricultural adviser who avers, from her experience, that the manner of the proposed sale falls far short of what might be termed standard practice. I accept that the adviser may not be entirely independent – a fact she acknowledges in her affidavit – but that does not render this evidence of no value.

45. The plaintiffs also rely on the fact that the proposed sale is without vacant possession. The court's approach to this issue in Nihill is instructive. In that case, the fact that the sale was without vacant possession was raised as an issue for the first time at the hearing of the injunction application:

“77. The Court can accept as a general proposition that a sale without vacant possession is in general likely to lead to a lower price than a sale with vacant possession. As Allen J put it in Hennessy, “Mr. Tyrrell [the defendant], in his replying affidavit suggests that Mr. Hennessy’s apprehension that a lower price would be achieved without vacant possession is mere speculation. I will content myself by saying that Mr. Hennessy appears to me to have the better end of that argument.” Perhaps more on point, he said, “… it is fairly clear that the buyer of a farm with the farmer in possession is in all probability if not inevitably buying a lawsuit which will depress the price…”. However, a sale without vacant possession, even if it is likely or very likely to achieve a lower price, does not necessarily constitute a breach of the receiver’s duty.

As Allen J put it in Hennessy in holding that while the purchase without vacant possession “is in all probability if not inevitably buying a lawsuit which will depress the price”, “on the other hand it is not necessarily unreasonable for a mortgagee to take into account in deciding what it will do the time effort and expense of what might turn out to be a protracted campaign of litigation to achieve vacant possession.”

…

79. However, that presupposes that the defendant has had an opportunity to address the allegation that he or she is acting in in breach of duty by selling the property without vacant possession. In this case, as noted above, there is absolutely no reference made in the grounding affidavit or in the supplemental affidavits or in the exhibits to a concern about the property being sold without vacant possession and the likely consequences of that. In order to find that an arguable case has been established by the Plaintiff on this point I would have to conclude that the Defendant should have given an explanation for selling the lands without vacant possession in circumstances where no concern in that regard had been raised by the Plaintiff. This goes to the substance of the case sought to be made by the Plaintiff because the Defendant could well have a good and reasonable explanation for its decision, and also goes to the fairness of the hearing. In those circumstances I can not conclude that the Plaintiff has discharged the burden of proof.”

46. In this case, the defendants have had every opportunity to address the fact that the sale is without vacant possession. In his first affidavit, the first plaintiff averred as follows:

“The Plaintiffs remain in possession of the properties, and there has been no demand, formal or otherwise, by Everyday or Mr. Tyrell to vacate any of the properties. It is certainly the case that any attempt to sell land without vacant possession will have a significantly depressing effect on the achievable price of same.”

47. The question of the merit of selling without vacant possession has always, therefore, been in issue. The defendants have not only failed to explain why they have decided to sell in this way, they have also not explained why they are doing so without even seeking vacant possession. All of the apparent shortcomings identified in Hennessy are present in this case, a sudden sale, without any prior demand for vacant possession, and minimal marketing. The defendants may have good reason for their choice to sell in this manner, but it is clear that the plaintiffs have identified a serious issue to be tried.

48. I am less convinced that the other issues raised by the plaintiffs give rise to an arguable case. The plaintiffs identified no authority for the proposition that a receiver must be appointed over the entirety of the land charged by the mortgage pursuant to which that receiver is appointed. Moreover, it is an argument which is in the teeth of the wording of the Mortgages pursuant to which the second defendant was appointed. Clause 6.01 of the Mortgages provides:

At any time after the execution of this Mortgage, the Bank may, without any further consent from or notice to the Mortgagor or any other person enter into possession of the Mortgaged property or any part thereof or into receipt of the rents and profits of the Mortgaged Property or any part thereof.

49. Moreover, the argument is inconsistent with the terms of section 19(1)(iii) of the Conveyancing Act 1881, which expressly confers on a mortgagee:

A power, when the mortgage money has become due, to appoint a receiver of the income of the mortgaged property, or of any part thereof; …

50. The plaintiffs invite the court to infer that the omission of the family home from the scope of the second defendant’s appointment – and therefore the sale – was an improper attempt by the defendants to avoid their obligations under the CCMA. The plaintiffs have already been given considerably more forbearance than the CCMA requires, albeit that the notices required by the CCMA may not have been sent, so this complaint rings somewhat hollow. In any event, it seems to me that there are more obvious explanations for the first defendant’s apparent decision to omit the family home from the scope of the second defendant’s appointment, but even if the purpose was to avoid triggering obligations under the CCMA, that does not give rise to a cause of action.

51. Nor, on the evidence available on the interlocutory application, have the plaintiffs identified a serious issue to be tried on the question of whether AIB’s interest in the Loans and Mortgages has been effectively transferred to the first defendant. The plaintiffs identify no complaint by reference to the first and second Deeds of Transfer, which evidence the transfer of the plaintiffs’ loans to the first defendant. Nor can they dispute the first defendant’s ownership of charges over each of the Properties, having regard to the contents of the register.

52. The only complaint is that there is a discrepancy between the loan account numbers identified in the hello and goodbye letters from AIB and the first defendant. In the goodbye letter from AIB dated 8 August 2018, following the first Deed of Transfer, AIB lists seven accounts as having transferred to the first defendant. However, the corresponding hello letter from the first defendant, dated 15 October 2018, lists ten accounts: the seven identified in the exhibited letter from AIB and three more. The goodbye letter from the first defendant to AIB, when the Loans were sold back to AIB, lists the same ten account numbers.

53. The goodbye letter from AIB following the second Deed of Transfer, dated 19 October 2022, lists eight accounts. Six are the same as those contained in the first goodbye letter. A seventh, like the first goodbye letter, refers to what is called a BBIDIBOR Normal Loan, although the account number in the second goodbye letter does not match that in the first. An eighth loan account number is also included. The corresponding hello letter from the first defendant, dated 24 January 2023, lists seven accounts: the eight listed in the AIB goodbye letter, but without the BBIDIBOR account number.

54. The hello and goodbye letters are required in order to comply with the requirements of section 28(6) of the Supreme Court of Judicature Act 1877. The assignee of a loan cannot sue to recover that loan unless the borrower has been notified in writing of the assignment. The letters do not, however, constitute evidence of the transfer. That is provided by the first and second Deeds of Transfer, which the plaintiffs have not challenged in this application. Notwithstanding the apparent discrepancies in the hello and goodbye letters, the evidence shows that the Loans and Mortgages relied on by the first defendant in appointing the second defendant and instructing him to market and sell the Properties were transferred from AIB to the first defendant. It may be that, on further investigation, the plaintiffs will be able to establish that the first defendant does not have sufficient title to the Loans such that it was not entitled enforce its security by seeking to sell the Properties. However, had it been

necessary to decide that issue for the purpose of this application, I would have concluded that the plaintiffs had not made out a serious issue to be tried.

ii. Balance of convenience

55. In circumstances where the plaintiffs have identified a serious issue to be tried on the issue of whether the defendants are in breach of their duty to take reasonable steps to obtain the best price when selling the Properties, it is necessary to consider where the balance of convenience lies, or, as it is sometimes put, what course of action, granting or refusing the injunction, creates the least risk of injustice. In determining this question, a distinction must be drawn between the forestry lands and the farmland.

56. As made clear in Merck, Sharp & Dohme, in determining this question, the most important issue will be the adequacy of damages. Given that the serious issue to be tried relates to the sale of the Properties and the possibility of a sale at an undervalue, the defendants make the, not unreasonable, point that any loss suffered by the plaintiffs will be readily compensatable in damages if they succeed at trial, i.e. it will be the difference between the sale price for the Properties and the price which they would have achieved had the defendants discharged their duties and obtained full market value.

57. However, as is apparent from the cases referred to above, Nihill and Philpott, where the cause of action involves real property, additional considerations can arise. Both cases reflect the long-standing understanding of the courts that the loss of an interest in property is not always compensatable by an award of damages. Should the Properties be sold at an undervalue, then the plaintiffs may obtain the full monetary value of the Properties, but the Properties will all be lost to the plaintiffs. Where a property has special value to a party, the loss of that property may not be recoverable.

58. I am satisfied that the farmland at issue in this application does have special value to the plaintiffs, the loss of which is not readily compensatable in damages. The farm has been worked by the first plaintiff for 45 years, and it appears his father farmed the lands before him. The plaintiffs are farmers and this is their only farmland. It is also their source of income. Should the farm be sold, this may have negative impacts on the plaintiffs far beyond any difference between the full value of the land and the value achieved by the defendants on any sale.

59. If it were the case that the debt owed by the plaintiffs clearly exceeded the highest value which the Properties might achieve, i.e. if it was clear that all the Properties will have to be sold in order to discharge the plaintiffs’ debt even if full value is obtained, then things might be different. However, that is not the case. The valuation provided by the plaintiffs is higher than the total debt owed. There is, therefore, a prospect that the plaintiffs may be able to retain some of their lands if they are successful in establishing their claim regarding the market value of the Properties.

60. The defendants are, of course, correct that the value of land may fall, but they have provided no evidence to suggest an imminent fear that this will occur in relation to the Properties. There has been very significant delay by the defendants and their predecessors in title in seeking to enforce the security. A short further delay will not prejudice them unduly. Given the limited risk of damage and the potential value of the Properties, I do not consider any inadequacy in the plaintiffs’ undertaking as to damages a sufficient basis to refuse an injunction.

61. In those circumstances, I am satisfied that the least risk of injustice would be done by restraining any attempt to sell the lands in the manner proposed by the second defendant pending the determination of the proceedings.

62. Entirely different considerations apply in relation to the forestry lands. There is no evidence that the forestry lands have any special value to the plaintiffs. Indeed, the evidence is to the contrary, that those lands are a commercial investment which the plaintiffs are actively engaged in trying to sell. The plaintiffs’ evidence regarding the offer to purchase the forestry lands lends support to their argument that there is a serious issue to be tried that the defendants propose to sell at an undervalue, but it wholly undermines any suggestion that any loss occasioned by the sale of these lands at an undervalue would not be compensatable in damages.

63. In circumstances where the plaintiffs have made no payments in relation to their Loans since 2018, the least risk of injustice is achieved by permitting the defendants to sell the forestry lands. In light of the offer received by the plaintiffs for those lands, common sense would suggest that the defendants at least investigate whether it is possible to take advantage of that offer before proceeding to sell at auction, but that is a matter for the defendants.

Conclusion

64. On the basis of the evidence adduced at this interlocutory stage, the plaintiffs have identified a serious issue to be tried on the question of whether the defendants have discharged their respective duties as mortgagee and receiver in their efforts to sell the Properties. An order restraining the defendants from attempting to sell the farmlands in the manner proposed pending the determination of these proceedings, in all the circumstances, gives rise to the least risk of injustice. An order restraining the sale of the forestry lands is not appropriate, having regard to the adequacy of damages as a remedy for any loss which may be occasioned if those lands are sold at an undervalue.

65. The grant of the injunction in relation to the farmland will be subject to the plaintiffs’ undertaking to progress the proceedings with all reasonable expedition and not to interfere with the defendants’ efforts to sell the forestry lands. The defendants shall have liberty to apply to lift or vary the injunction in the event of any failure by the plaintiffs to abide such undertakings.

66. I will list the matter on Friday, 16 May 2025 at 10.30 am to deal with any outstanding matters on this application, including costs, and for the giving of directions for the exchange of pleadings. I encourage the parties to liaise in advance of that date for the purpose of seeking agreement on any outstanding issues.