Court of Appeal dismisses appeal against refusal of injunction to restrain receiver's sale of mortgaged property.

APPROVED – NO REDACTION NEEDED

THE COURT OF APPEAL

CIVIL

High Court Record No. 2022 1329 P

Court of Appeal Record No. 2023/295

Costello P. Neutral Citation Number [2026] IECA 125

Faherty J.

Pilkington J.

BETWEEN:

FRANCIS HARTE

Plaintiff / Appellant

AND

PROMONTORIA (ARAN) LIMITED, KEN FENNELL AND MARK DEGNAN

Defendants / Respondents

JUDGMENT of Ms. Justice Pilkington delivered on the 7th day of July 2026

1. This is an appeal against the Judgment and Order of Cregan J. dated 19 and 26 October 2023 respectively, in which he refused the plaintiff/appellant’s application for interlocutory injunctive relief. APPROVED – NO REDACTION NEEDED

2. On 5 April 2022 Mr. Harte (‘the appellant’ or ‘Mr. Harte’) issued plenary proceedings [2022 1329P] together with a Notice of Motion seeking interlocutory reliefs in the following terms;

“An injunction restraining the first and /or second and /or third named defendants, and /or their respective servants or agents, from seeking to take and /or taking possession of the property, and /or from marketing for sale, or selling, and / or completing any sale of, the property, and /or from otherwise seeking to deal with the property”

3. The property in question comprises the land and premises within Folio 11232 in the Register of Freeholders County of Meath (‘the property’). Mr. Harte was registered as its owner on 22 August 2001.

4. In considering this application for injunctive relief it is necessary to set out the background facts and circumstances giving rise to Mr. Harte’s application. These matters are particularly relevant in respect of an application made by Counsel for Mr.

Harte at the outset of his appeal.

Background

5. By a facility letter dated 16 February 2010 between Ulster Bank Ireland Limited (‘Ulster Bank’) and Mr. Harte a demand loan facility was advanced in the sum of €2.369 million. This facility was expressed to be a continuation of a prior loan account.

6. The loan facility was secured over the property by a Deed of Mortgage dated 5 November 2009 (“the charge”). On 6 November 2009 the charge was in turn registered as a burden on the property.

7. The appellant subsequently defaulted on his loan facility and on 14 December 2011 Ulster Bank issued a letter of demand in which it demanded repayment of €2,564,032.74 being the sum due and owing on that date.

8. On 22 March 2013, Ulster Bank issued summary summons proceedings against Mr.

Harte [2013/885S]. This action, together with other related proceedings, was heard APPROVED – NO REDACTION NEEDED

over a period of 5 days in 2013 and 2014. Judgment was delivered on 19 December 2014, and the matter appears to have been periodically adjourned thereafter. Finally on

6 March 2015 an Order for Judgment was made for a sum in excess of €1.8m with a stay of execution for a period of two years.

9. The Mortgage Sale Deed in Relation to a Portfolio of Loan Facilities dated 16 December 2014 between Ulster Bank and other parties collectively defined as the sellers and Promontoria Holdings 128 B.V., defined as the initial buyer, deals with the sale of these facilities to Promontoria Holdings 128 B.V and within the unredacted portion lists the interest of Mr. Harte.

10. Of relevance to an application to adduce a further ground of appeal in this Court is the appellant’s arguments arising from the definition of ‘completion date’ within this document which states that it ‘means the 10 February 2015 or such other date as the parties may agree in writing.’

11. By Deed of Novation dated 12 February 2015 between the parties to the Mortgage Sale Deed and Promontoria (Aran) Ltd (‘Promontoria’) defined as the novated buyer, all of the duties and obligations of Promontoria Holdings 128 B.V. within the Mortgage Sale agreement (defined as the Sale and Purchase Agreement) were assumed by Promontoria.

12. By Global Deed of Transfer dated 12 March 2015 between Ulster Bank and the parties defined as the sellers and Promontoria as the buyer, Ulster Bank transferred and assigned the securities within the Mortgage Sale Deed, as novated, to Promontoria who was thereafter registered as owner of the charge. This includes the interest of Mr. Harte.

13. The appellant pointed out (on more than one occasion) that the last two documents had only been produced in exhibits to Mr. Carter’s two affidavits on 5 and 13 July 2023 respectively.

14. In the summary proceedings 2013/624 Mr. Harte sought a further stay of execution for a period of six months or such further period as the court might deem appropriate. By Order dated 23 November 2018 the stay application was refused. Within his judgment APPROVED – NO REDACTION NEEDED

[2018] IEHC 624, Allen J. notes that the application before him had been adjourned on several occasions. Within those time periods he notes that it appeared Mr. Harte was disposing of certain other properties. In his judgment (there was no appeal in respect of

it) he stated at para. 34;

‘34. In my view the defendant has been afforded extraordinary latitude to achieve an orderly disposal of the secured properties. He has not availed of the opportunity so afforded to him. In substance the defendant does not ask for further time to pay, or to sell, but asks that the plaintiff should be denied recourse to what the defendant himself says is the most valuable security and which the defendant himself says has generated considerable interest from a series of major national and international developers’.

15. By Deed of Appointment dated 2 July 2019 Promontoria appointed the second and third named defendants as joint receivers over the property (‘the receivers’).

16. On 15 July 2019 the second named defendant, on behalf of himself and the third named defendant wrote to Mr. Harte informing him of their appointment by Promontoria.

17. On 5 April 2022 Mr. Harte issued these proceedings. Within the plenary proceedings the Statement of Claim was delivered on 21 June 2022, the Defence and Counterclaim on 8 May 2023, and the Reply to that Defence and Counterclaim on June 2023. On 28 June 2023 a letter seeking discovery was dispatched on behalf of Mr. Harte.

18. Following the issue of the Notice of Motion seeking interlocutory reliefs, in the normal course it was followed by an exchange of affidavits; the first sworn by the appellant on

5 April 2022, a replying affidavit by Mark Degnan sworn on 19 May 2022 on behalf of the receivers. A supplemental affidavit by the appellant was sworn on 8 June 2022, then a further affidavit from Mark Degnan dated 19 December 2022, a further supplemental affidavit by the appellant on 11 March 2023 together with two affidavits of Kevin Carter, a solicitor from the firm representing the Respondents, dated 5 July and 13 July 2023 respectively. The relevant issues within these affidavits are considered within the High Court judgment. APPROVED – NO REDACTION NEEDED

Judgment of Cregan J. dated 19 October 2023

19. After setting out the background facts, Cregan J. points out that legal principles applicable to the grant of an interlocutory injunction are those within Merck Sharpe & Dohme Corp v Clonmel Healthcare Ltd [2019] IESC 65 (‘Merck’) and sets out the criteria within the well-known quotation from O’Donnell J. (as he then was), at para.

65 of his judgment, as follows;

“Finally, at the risk of perhaps creating a further rule that will require subsequent qualification and correction, it may be useful to outline the steps which might be followed in a case such this:-

(1) First, the court should consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted;

(2) The court should then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanamid and Campus Oil approach will yield the correct outcome.

However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;

(3) If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice; (4) The most important element in that balance is, in most cases, the question of adequacy of damages;

(5) In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;

(6) Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where APPROVED – NO REDACTION NEEDED

the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial.

(7) While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;

(8) While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined”.

20. There is no divergence between the parties before the High Court or this Court that the legal criteria through which this application for an interlocutory injunction is to be considered is as set out within this quotation.

21. Cregan J. then considers each issue in turn, beginning with the question as to whether there is a serious question to be tried. This involves consideration of a number of separate grounds raised by Mr. Harte. As many of these issues are also germane to the issues raised on appeal. I propose to consider each in turn;

A. The interest of Ms. Quail in the property.

22. Ms. Quail is a sister of Mr. Harte. Within his submissions and affidavits before the High Court Mr. Harte makes reference to family law proceedings [2008/52M] between himself and his former wife. Within those family law proceedings, the Court held that Ms. Quail held a 25% beneficial interest in the property.

23. Mr. Harte avers that both Ulster Bank and consequently Promontoria are on notice of her interest. Arising from this he seeks to argue that he only owns a 75% interest in the property and accordingly an appointment of the receivers over the entire property is invalid. Furthermore, he asserts that the first defendant cannot effect a valid sale of the property and further that the receivers’ appointment may be tainted in some manner. APPROVED – NO REDACTION NEEDED

24. Cregan J. then considers the replying affidavits of Mark Degnan, the third named defendant. Initially Mr. Degnan notes the non-engagement by Ms. Quail in both the family law and the present proceedings. Mr. Harte also separately confirmed this. Mr.

Degnan avers that Mr. Harte has no locus standi to make any claim on behalf of his sister and also points out that the loan facility was made available on the express basis that Mr. Harte was the full owner of the property and that it was unencumbered.

25. Cregan J. also points to Mr. Degnan’s averment of having obtained a copy of the order within Mr. Harte’s family law proceedings 2008/52M, which confirms Ms. Quail’s beneficial interest in the property. Of paramount importance is the fact that that paragraph 9 of the Order makes it entirely clear that this finding ‘to the effect that [Ms.

Quail] had a beneficial interest in certain assets of the Respondent (Mr. Harte), binds the Applicant and Respondent, but does not bind the Notice Party (Ulster Bank) who was not a party to the proceedings at that time’. The terms of that Order are not disputed.

26. The terms of the Order quoted above are clear that any beneficial interest of Ms. Quail in the property is not binding on Ulster Bank.

27. In respect of this argument Cregan J., specifically invoking the Order in the family law proceedings set out above, finds that Mr. Harte has not made out any serious issue to be tried such that would justify the grant of an injunction restraining the defendants selling the property.

B. The validity of the receivership

28. Cregan J. quotes from Mr. Harte’s affidavit where he avers that the appointment of the joint receivers is invalid as full notice of the appointment was not provided to him, nor was he afforded inspection of all documentation surrounding the proof of the receivers’ authority and identity.

29. Cregan J. notes that within his affidavits Mr. Harte accepts that he received what is colloquially known as a ‘hello’ letter from BCL Global limited [formerly Link Asset APPROVED – NO REDACTION NEEDED

Ireland Ltd, formerly Capita Asset Services Ltd] stating that all his loans and security documents had been transferred to Promontoria as of 12 March 2015. Mr. Harte also accepts that on 22 September 2015 the charge registered on the folio in favour of Ulster Bank was transferred to Promontoria.

30. Moreover, Mr. Harte confirms that on 15 July 2019 he received a letter informing him that a receiver had been appointed over various properties, of which the property is one, and a letter enclosing a Deed of Appointment dated 12 July 2019 of the joint receivership. Whilst acknowledging the receipt of other documentation comprising a copy of the facility letter, the mortgage, and the Deed of Appointment as recited above, he maintains that he should also have received the global deed of transfer, which he also reiterates within a separate heading. This was in fact furnished to him at a later date.

31. Based upon the matters set out above Cregan J. found that in such circumstances, with regard to the documentation Mr. Harte himself acknowledged as having received, that he received proper notice of the appointment of receivers over the property and that the matters raised do not raise a serious question to be tried.

C. The alleged sale of the property at undervalue

32. Mr. Harte’s contention that a sale of the property is being offered at an undervalue is described by the Trial Judge as the most fundamental issue raised within this interlocutory application. Cregan J. outlines the geographical location of the property and notes that Mr. Harte has obtained a surveyor's valuation (in light of Meath County Council's upcoming CPO of some of the lands with a view to the sale of the property)

with an indicative value of €3.6 million. Mr. Harte maintains that the property was being marketed by the receivers for €1.1 million.

33. Cregan J. also notes Mr. Harte’s contention that if a sale proceeded it would make it difficult if not impossible for him to pursue any claim in respect of the potential CPO, which would render damages an inadequate remedy in the circumstances. APPROVED – NO REDACTION NEEDED

34. The Judge also considers the defendants’ response within its affidavits, pointing to the fact that the valuation is some two and a half years old and moreover that an e-mail of

26 April 2022 from Meath County Council clearly confirms that it was not seeking to purchase the lands at this time. Cregan J. also notes the steps taken by the receivers to ensure that appropriate expertise is being sought and retained by them. He further notes the averment by Mr. Degnan in his affidavit that the receivers would discharge their duties to sell the property at the best price reasonably obtainable and that there was no evidence to suggest otherwise.

35. The Trial Judge was satisfied that Mr. Harte had not made out a serious issue to be tried on this issue. In particular the Trial Judge invoked the case of Edenfell Holdings Ltd [1999] 1 IR 443 where he stated ‘… ‘the Supreme Court held that the receiver had exercised all reasonable care in selling the property as he had [sic.] and that it was not for the court to view the matter with hindsight but to look at it from the point of view of the receiver who had dealt with the matter at the time and had expert opinion available to them and are acting according to that advice’. (para. 56).

36. The Court also considered the Supreme Court decision of Holohan v Friends Provident Century Life Office [1966] IR 1 in which the Court held that the test in considering the exercise of the power of a mortgagee with a power of sale is whether or not the mortgagee acted as a reasonable man in the sale of the mortgagor’s property.

37. In the present case Cregan J. held it was clear that the receivers had expert opinion available to them and were acting in accordance with it, in order to market and sell the property in order to ensure that the Plaintiff’s secured debt is repaid.

38. In his view Mr. Harte had not raised a serious question to be tried under this heading.

D. Transfer of the Judgment

39. Under this heading the Court considered Mr. Harte’s two linked submissions to the effect that the judgment obtained by Ulster Bank had not been assigned to Promontoria APPROVED – NO REDACTION NEEDED

and accordingly they had no entitlement to appoint receivers. Mr. Harte also argued that the letter from Ulster Bank dated 26 March 2015 did not constitute express notice.

40. Cregan J. considered two questions had been raised as follows; the first whether a judgment debt can be assigned as a matter of principle and secondly whether it was assigned in this case. The Trial Judge was satisfied to answer both in the affirmative, particularly with regard to the terms of the Global Deed of Transfer.

41. Within his third affidavit Mr. Harte appears to consider that the Global Deed of Transfer does not reflect a transfer of the summary judgment in favour of Ulster Bank.

42. The Trial Judge was satisfied as a matter of principle that a judgment can be assigned;

firstly that it is a judgment debt and secondly that a judgment debt is a chose in action and therefore capable of being assigned.

43. The Trial Judge was also satisfied from his perusal of the Global Deed of Transfer that the loan and mortgage had been assigned by Ulster Bank to Promontoria. I also note that whilst this issue was raised on appeal it was dealt with on a different basis, with specific reference to the findings of Allen J. in [2018] IEHC 624.

44. Cregan J. concluded that Mr. Harte had failed to satisfy the Court that there is a serious question to be tried in his quest for interlocutory relief, he then turned to consider the question of the balance of convenience.

Balance of Convenience / Balance of Justice

45. As set out in Merck, the Court then turned to consider to the question of the balance of convenience and the adequacy of an award of damages.

46. In assessing the balance of convenience criteria, Cregan J. reiterates the comments of O’Donnell J. in Merck, quoted above (para. 65(5)), where he states that in commercial APPROVED – NO REDACTION NEEDED

cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy.

47. The Trial Judge pointed out that he was sceptical that damages could not be an adequate remedy. In his view Mr. Harte entered into a commercial loan agreement over commercial property, where security was granted over that property as part of the loan.

There was a default judgment entered against him. Thereafter the first named defendant appointed receivers to sell the property to make good on the shortfall of the loan.

48. He also quoted from the judgment of Murray J. in Ryan v Dengrove DAC [2021] IECA 38, as follows;

“As I observed in the introduction to this judgment, the authorities show that in ‘receiver injunction’ cases involving commercial properties (and I stress the latter part of the description) the position is often adopted that in a dispute between an undertaking that has borrowed monies for wholly commercial purposes, and a secured lender who has obtained, as a condition of that borrowing, security over wholly commercial assets, their dispute is a commercial one, and the remedy for breach by either party of their obligations under those arrangements sounds in damages.”

49. Cregan J. concluded that this is a case concerning commercial property and therefore about monetary matters. On its facts he took the view that damages are an adequate remedy, and an injunction should be refused.

Other Factors including adequacy as to damages

50. In conclusion, under the heading ‘other factors’ Cregan J. considered the plaintiff’s undertaking as to damages. The Court noted that Promontoria obtained judgment against the plaintiff in March 2015, with a stay of two years which Mr. Harte sought to extend in November 2018. At paragraph 94 of his judgment, Cregan J. concludes with his view that, as a matter of first principle, where a party has failed to satisfy an APPROVED – NO REDACTION NEEDED

outstanding court judgment for a debt, then that party’s undertaking as to damages is without substance. He concludes that this plaintiff’s undertaking in damages is illusory and without substance. On that ground alone the Trial Judge confirms that he would refuse the application for an injunction.

51. Accordingly, the High Court in applying the Merck criteria refused the plaintiff’s application for an injunction on the grounds that Mr. Harte had not established a serious issue to be tried, that the balance of justice is in favour of refusing the application and that damages would be an adequate remedy.

The Appeal

The Standard of Review

52. The criteria are by now well known. In submissions the respondent cites the case of Greenwich Project Holdings Ltd v Cronin [2022] IECA 154. I have cited the decision of Whelan J. in some detail as I believe it neatly encapsulates the case law in this area when she stated;

‘35. The dismissal application proceeded before the High Court judge based on affidavit evidence, the written legal submissions and oral arguments of learned senior counsel. In such circumstances having due regard to the jurisprudence and including Ryanair Limited v. Billigfluege.de GmbH [2015] IESC 11 (Unreported, Supreme Court, Charleton J., 19 February 2015) and McDonagh v. Sunday Newspapers Limited [2017] IESC 46, [2018] 2 I.R. 1, a somewhat deferential approach ought to be taken by this Court to the exercise engaged in by the trial judge albeit however it is to be recognised that this Court is not in any less position than the trial judge to evaluate the affidavits and to form its own view after having afforded due weight to the views of the trial judge.

36. As is clear from the decision of the Supreme Court in Lismore Builders Limited (in Receivership) v. Bank of Ireland Finance Limited [2013] IESC 6, this Court when requested to set aside an order made by a High Court judge in the due exercise of his or her discretion in relation to mixed questions of fact and law ought to do so only where it is considered necessary in order to avoid APPROVED – NO REDACTION NEEDED

a serious injustice being visited upon the appellant. It will be recalled that MacMenamin J. in Lismore Builders considered the circumstances in which an appellate court might review an order made by the trial judge in the exercise of such discretion and observed:

“Although great deference will normally be granted to the views of a trial judge, this Court retains the jurisdiction of exercising its discretion in a different manner in an appropriate case. This is especially so, of course, in the event there are errors detectable in the approach adopted in the High Court. The interests of justice are fundamental.” (para. 4)

37. That jurisprudence has been further refined over time by subsequent judgments of this Court, some of which were reviewed in Byrne & Anor. v. Bank of Scotland plc. & Anor. [2021] IECA 228. Of particular note is the judgment of Collins J. in Betty Martin Financial Services Limited v. EBS DAC [2019] IECA 327 where he cautioned at para. 39:

“… while as a matter of principle, ‘great weight’ is to be given to the views of the High Court Judge, the ultimate decision on this appeal is for this Court.”

At paras. 40 and 41 of his judgment Collins J. laid particular emphasis on the importance of the High Court giving an explanation to identify the basis for the view it takes particularly in a contested matter or where it fails to engage appropriately with the arguments advanced by one or other of the parties on a core issue and in observing “that will necessarily affect the weight to be attached to the Court’s view on appeal.” (para. 40)’

Issues

53. The Notice of Appeal sets out essentially the same arguments by way of grounds of appeal as were addressed by the High Court. Within his submissions grounding this appeal the appellant confirms that only four issues are to be raised, and they are as follows:

(a) Whether there is a serious issue to be tried that the second and third named defendants are bound by the beneficial interest of Ms Quail and cannot effect an enforceable sale of the lands. APPROVED – NO REDACTION NEEDED

(b) whether there is a serious issue to be tried that the judgment was not validly transferred from UBIL to the first named defendant

(c) whether there is a serious issue to be tried that the second and third named defendants intend to sell the lands at an undervalue.

(d) whether the balance of justice favours the grant of interlocutory relief.

Application to introduce a new Affidavit

54. At the outset of this Appeal Counsel for the appellant sought to introduce a further affidavit sworn by Mr. Harte on 11 March 2024.

55. The affidavit sought to introduce evidence related to an allegation regarding the overcharging of interest and secondly a brochure entitled ‘Strategic Employment Sites in Co. Meath’ which it was argued has a direct relevance to the appellant’s allegation regarding the sale of the lands at undervalue, as it apparently shows the appellant’s site as pivotal to the development.

56. The Court, having considered the application, refused the appellant’s application to admit the affidavit into evidence on the basis that first, the issue was not an issue before the High Court or on Appeal and second was not relevant as it related to the sale of the property and did not relate to any issues concerning valuation of the property.

57. What I might describe as the ‘interest point’, that is raised in Mr. Harte’s affidavit is further considered below.

58. The application to adduce new evidence is therefore refused. I then turn to the second application; an application to introduce a new ground of appeal.

Introduction of a New Ground of Appeal APPROVED – NO REDACTION NEEDED

59. Counsel for the appellant then informed the Court that, in addition to his four points of appeal recited above and his application to adduce new evidence that, in addition, he was also seeking to advance a new argument.

60. This new argument relates to a closer examination of the dates attached to the Mortgage Sale Deed and the Deed of Novation. On its face the Mortgage Deed is dated 12 December 2014 but the definition of completion date within the document defines it as ‘means the 10 February 2015 or such other date as the parties may agree in writing.’

61. The Deed of Novation is dated two days later on 12 February 2015 – the appellant’s argument is straightforward; you cannot novate into a concluded contract and it is argued that is what Promontoria Holdings 128 BV have purported to do. In short, it is contended that Promontoria has no legal interest in the property

62. The Court is not aware whether any other date was ever agreed by the parties in respect of the provision within the definition of completion date, where provision is expressly made for such an eventuality. Counsel for the appellant argued that given the direction of Cregan J. that all relevant documentation was to be provided, such a written agreement would have been included, but none was. That is not definitive as to its existence (or non existence).

63. I note that formal discovery was not made within the plenary action. Nor has the Court had any opportunity to hear argument in respect of the registration of Promontoria as charge holder in respect of the property and of course the issues attendant upon that pursuant to s.31 of the Register of Titles Act 1964. It might also be of relevance (and I speculate here) to know if the other lands held by Mr. Harte, many of which have now been sold, contained the same ‘issue’ with regard to the interest of Promontoria over those lands.

64. Counsel for the appellant argued that all he needed to persuade this Court was not that he was correct but rather than he had an arguable point, from which he could persuade a court that this in turn necessitated the preservation of the status quo in order that he could present his argument in the detail he acknowledged it required. He further APPROVED – NO REDACTION NEEDED

submitted that it would be unfair to his client to direct or permit a sale of the property when the issue of Promontoria’s interest was unclear. This is perhaps his weakest point given his client’s agreement that the land was required to be sold. The respondents were crystal clear that they were denied a proper right of reply.

64. This is a case in which it was abundantly clear that counsel for the respondent was completely taken by surprise. His assertion, uncontradicted, was that he heard the new ground of appeal for the first time as it was being opened to the Court.

65. Notwithstanding this he did invoke the decision of Barniville J. (as he then was) in Fannon v Ulster Bank [2024] IECA 51 [‘Fannon’] in opposing the application. Fannon is a case in which this Court emphasised the longstanding principle of the courts to the effect that it should not entertain new arguments not raised at the initial trial. Barniville

J. states;

“5. It is clear, however, that in advancing its appeal, Ulster has relied on points and arguments not advanced in the High Court which the judge had no opportunity to address in his judgment. While the notice of appeal and Ulster’s written submissions on the appeal moved some distance from the case advanced by it in the High Court, that move was even more dramatic in the oral submissions made on behalf of Ulster at the hearing of the appeal. This dramatic shift in the arguments advanced by Ulster was most pronounced in its attempts to persuade the court that it should dismiss the plaintiff’s negligence claim. In respect of that part of its appeal, Ulster made arguments and relied on case law which were not advanced or addressed before the High Court, or, indeed, developed to any material extent in its notice of appeal or in its written submissions. The plaintiff protested at this in his response to the oral submissions on the appeal.

6. In my view, there is considerable merit to the plaintiff’s objections. Ulster should not be permitted to rely on substantial arguments which were not considered by the High Court. For the court to permit Ulster to do so would, in my view, be unfair and would be inconsistent with the role of the appellate court as discussed by O’Donnell J. in the Supreme Court in Lough Swilly Shellfish Growers Cooperative Society Limited v. Bradley & Ors [2013] IESC 16, [2013] APPROVED – NO REDACTION NEEDED

1 I.R. 227 (“Lough Swilly”) and considered on many occasions by 5 this Court (a recent example being, Promontoria (Aran) Limited v. Mallon [2021] IECA 130). Ulster’s appeal should be considered on the basis of the case and arguments advanced by it in the High Court and not on the basis of the fundamentally new arguments advanced on its behalf in this Court.

7. In addition to this, there is, I believe, a significant difficulty in Ulster relying on the provisions of s. 28(6) of the 1877 Act in its application to dismiss the plaintiff’s claim on the basis of the alleged assignment of the plaintiff’s loan and mortgage to Promontoria, in circumstances where Ulster did not provide a copy of the document (or the relevant parts of the document) alleged to constitute the assignment. Ulster did not, therefore, put before the High Court or this Court, for the purpose of its application to dismiss the plaintiff’s claims, evidence that the alleged assignment was an “absolute assignment” for the purposes of that statutory provision.”

66. In response to questions from the Court, counsel for the appellant confirmed he had only formulated the point on the morning of the hearing. Nonetheless, he contended that it was arguably to be found, if obliquely, within paragraph 15 of the Statement of Claim in the plenary action, but accepted it was not particularised.

67. He argued that notwithstanding these matters all he needed was an arguable case which he contended he had made out, that the balance of justice necessitated that this issue be determined at the plenary hearing and, linked to this, that the status quo should be maintained whilst the issue was at least initially determined.

68. Counsel for the respondent accepted that arguments might arise regarding s.31 of the Register of Title Act 1964 and the primacy of the register in light of the registration of Promontoria as charge holder and suggested that it might be a suitable matter to be heard as a preliminary point at the hearing of the action.

69. It does appear that all the documentation required to advance this submission was within the documentation before the High Court. The appellant therefore seeks to argue APPROVED – NO REDACTION NEEDED

that it is not the introduction of new evidence but a differing interpretation of them that is required, based upon documentation already before the Court.

70. Counsel for the respondent pointed to several additional matters; that the issue had not been pleaded within the Statement of Claim to the plenary proceedings, and it had not been argued before the High Court (a point accepted by counsel for the appellant). It was not within any written submissions, nor had it been adverted to in any way within the appellant’s initial application before this Court to admit a further affidavit. Counsel stated his disadvantage at now being or potentially being called upon to respond to an application of which he had no notice, no instructions and no opportunity to prepare submissions.

71. Having risen to consider the application the Court decided to continue with the appeal and to the extent that might be necessary to give any ruling it considered appropriate within its final judgment of this appeal. I therefore turn to consider this appeal.

72. In the circumstances of the application to admit a further ground of appeal there was a paucity of case law opened to the court. However, in my view the general legal principles on the admission of new ground of appeal are well known. The Court of Appeal has, on a number of occasions, been called upon to consider the application of the well-known Supreme Court judgments in Lough Swilly Shellfish Growers Co-op Society Ltd v Bradley [2013] 1 IR 227 and AIB v Ennis [2021] 3 I.R. 733 (‘Ennis’), in circumstances a party seeks to advance a point which was not argued or addressed in the High Court.

73. This is of course an appeal in an interlocutory matter in which MacMenamin J. in Ennis considered that the courts might adopt a ‘somewhat more flexible approach’, dependent upon the justice of the case (para.22).

74. Noonan J. in Promontoria (Arrow) Ltd v Mallon [2021] IECA 130 (‘Mallon’) makes the following comment on this point; APPROVED – NO REDACTION NEEDED

“However, lest it be thought that the Ennis decision has recalibrated the balance in this area of law in any dramatic way, it is fair to note that although MacMenamin J. allowed for greater flexibility in non-plenary cases, he said (at paragraph 15 of his judgment) that the K.D. principle remained “the general principle” i.e. that it was a fundamental principle that save in the most exceptional circumstances, the court should not hear and determine an issue which has not been tried and decided in the High Court. He also said that while there were exceptions, they must be “clearly required in the interests of justice”.

MacMenamin J. viewed the Ennis case as falling within the category of “truly exceptional” (para. 31).

75. Gibb v Promontoria (Aran) Ltd & ors [2018] IECA 95 (‘Gibb’) concerned an appeal from the High Court’s refusal of an interlocutory injunction, as in this case.

76. Within his judgment Peart J. took the view the court should not permit a point or argument to be made where no good reason had been provided for the failure to do so.

Whelan J. in a separate judgment also rejecting the appeal, also pointed to the facts that the appellant had been legally represented in the High Court and no reasons had been given as to why it had not been raised before that court.

77. In my view, the points made in Gibb above and in Mallon are apposite to the facts of this case.

78. The argument the appellant now seeks to advance was never raised in the High Court, on affidavit or oral submissions.

79. There is simply no corroborating evidence that in my view would give this court any comfort in adjudicating the matter without further argument and documentation.

Moreover, Tanager v Kane [2018] IECA 352 clearly states that is not appropriate to challenge the conclusiveness of the register in possession proceedings. These are not possession proceedings but in effect what this appellant seeks is rectification of the APPROVED – NO REDACTION NEEDED

register. That in turn would, in my view, require an amendment to his pleadings and possible joinder of a new party.

80. The respondent was at a total disadvantage in the preparation of his reply which militates strongly against the principles of fairness within the administration of justice in any court.

81. In my view, the appellant’s contention that his argument can be discerned within the pleadings in the Statement of Claim would require a high degree of deductive reasoning by any reasonable or fair-minded person to discern such an argument. In my view, such a person would not succeed.

82. I also note that this appellant has been legally represented throughout. Accordingly, for all the reasons just set out, the appellant’s new argument cannot be considered a fair issue to be tried in the proceedings.

Conclusion on the Admission of a New Ground of Appeal

83. In a case such as this where there is an agreement that the property is to be sold, in my view, if Mr. Harte is ultimately successful in having this new ground of appeal upheld by a court his redress (if such is required) clearly lies in seeking an award of damages.

This is a classic type of case which in my view makes it very clear that damages would in and of themselves constitute an adequate remedy.

84. The application to admit this new ground of appeal is refused.

Appellant’s Grounds of Appeal within his Submissions

First Issue - the interest of Ms. Quail

85. The appellant revisits the interest of Ms. Quail in the property and its implications for a receiver sale. He argues that there are issues for the second and third named defendants in effecting a sale of the premises. He submits that the receivers could not enter into an enforceable contract for the sale of the lands without Ms. Quail’s consent. APPROVED – NO REDACTION NEEDED

It was submitted that this argument was not considered by the High Court Judge.

Accordingly, the appellant contended that there was a serious issue to be tried as to whether the second and third named defendants can presently enter into a valid and enforceable contract for the sale for the lands without Ms. Quail’s consent. I disagree.

86. The difficulty that is not addressed by the appellant is that he lacks standing or locus standi to assert any claim or entitlement on behalf of his sister.

87. Second, it is accepted that pursuant to the terms of the court order within the family law proceedings, cited at para. 22 above, it is specifically confirmed that the finding of her beneficial interest is not binding upon Ulster Bank.

88. Third, if there is any beneficial interest that binds the receivers then it is for Ms. Quail to advance it. She has not done so. This point was accepted by counsel for the appellant in submissions before this Court.

89. Finally, given that Mr. Harte is no longer the registered owner of the property, the nature of the argument that he might care to advance in such circumstances, must remain uncertain.

90. In my view Cregan J. was entirely correct in his conclusion that no serious question to be tried has been raised in respect of this submission.

Second Issue – The Transfer

91. The appellant’s second issue concerns the transfer of the judgment and mortgage security to Promontoria. The appellant maintains that there was either an improper or absence of a transfer of the judgment to Promontoria. The appellant reiterated the arguments advanced before the High Court in contending that Promontoria had no entitlement to issue execution on foot of the Order. However, these matters had already been foreshadowed and in my view comprehensively deal with in light of the Order of Allen J. in proceedings [2018] IEHC 624, which are also considered and cited above, in which he states APPROVED – NO REDACTION NEEDED

“9. Shortly after the order of Abbott J., the defendant’s loans were assigned by Ulster Bank to Promontoria (Aran) Limited. There has been no formal application made on behalf of Promontoria (Aran) for leave to issue execution on foot of the order but the defendant has engaged in negotiations with Promontoria (Aran)’s agents and the defendant’s solicitors’ correspondence has recognised that the plaintiff’s solicitors were acting on behalf of both Ulster Bank DAC and Promontoria (Aran). Having so engaged for about a year and having secured a number of consent extensions of the stay and adjournments of the motion, the defendant, in an affidavit filed on 10th May, 2018 questioned the transfer and now makes the argument that since Ulster Bank DAC has transferred the defendant’s loan it cannot be heard to argue that it would be prejudiced by the further extension of the stay.

10. It seems to me that the defendant wants it both ways. He would have the court find that the transfer was effective to divest Ulster Bank of the loan but not to give rise to any rights on the part of Promontoria (Aran).

11. I propose to dispose of this argument by identifying Promontoria (Aran) as a person whose presence before the court may be necessary in order to enable the court to effectually adjudicate on the application and by making an order under O. 15, r. 13 joining Promontoria (Aran) Limited as a plaintiff.”

92. Although the joinder of Promontoria did not form part of the Order, all accepted that it ought to have been and that the addition of Promontoria as a plaintiff was operative and binding on both parties. That in my view disposes of any doubt surrounding the efficacy of the transfer to Promontoria and its entitlement to issue execution. This ground of appeal is accordingly refused.

Third Issue - The Sale of the Property

93. The argument regarding a sale of the property (which I again note is commercial property) which alleges a failure by the receivers to seek to obtain the best price reasonably practicable is in my view at best theoretical. On appeal the appellant criticises Cregan J. for preferring the receivers’ evidence as opposed to the arguments raised by the appellant. Having considered the issues of both parties carefully, in my view, it is clear that the trail judge was entitled to do so. APPROVED – NO REDACTION NEEDED

94. Having cited the relevant authorities (Holohan v. Friends Provident Century Life Office and Edenfell Holdings Ltd), and conscious of the obligation on the receivers to act as a reasonable person would have acted in selling the mortgagor’s property, Cregan J.

found nothing in the case to suggest that the receivers had not so acted.

95. It is clear that the receivers had instructed and obtained expert advice as to the valuation of the property and its proposed sale. There is nothing within the steps taken by the receivers that points to a serious question to be tried as regards the price that might be obtained for the sale of the property. This ground of appeal is also rejected.

96. I would only slightly disagree with Cregan J. to the extent he considered this ground as the most fundamental issue raised. In my view, no issue has been raised that suggested any inference that might be drawn as to the possibility of a sale at undervalue.

Fourth Issue - Balance of Convenience / Adequacy of Damages

97. The appellant argues that the balance of convenience criteria was incorrectly decided.

Cregan J. is criticised for his reliance upon the decision of this court in Ryan v Dengrove and also for his finding that damages are an adequate remedy.

98. On the facts of this case the appellant contends that the greatest risk of injustice lies in refusing the injunctive relief. He maintains that the respondents are protected given the value of the lands (even at its lowest estimate) in respect of any award of costs in favour of the respondents. He contends that damages are not an adequate remedy were it to transpire at trial that the lands could not be sold or were sold at an undervalue. In my view, neither scenario has been adequately advanced before this Court or indeed at all in such a manner that would persuade this Court that a serious question to be tried is posed by either issue for the reasons that have been set out within Cregan J.’s judgment.

99. The respondents and indeed the Court pointed out that whilst there had been information furnished as to Mr Harte’s assets, the same cannot be said in respect of his liabilities. It was also argued by the respondents that for the Court to accept an APPROVED – NO REDACTION NEEDED

undertaking as to damages from Mr. Harte was illusory where the judgment against him remained unsatisfied for such a lengthy period.

100. The appellant appears to take the view that the learned Trial Judge gave too much weight to the fact that a judgment remains outstanding when he should have had regard to the significant value of the assets and the fact that the appellant has already discharged certain sums to reduce his indebtedness in this and other proceedings.

Whilst the latter point is correct, nevertheless the appointment of Promontoria and the receivers gives them a statutory right and indeed a duty to seek to realise these assets for the benefit of the creditors. In my view, in such circumstances, it would be unfair to require them to await the outcome of the plenary hearing.

101. As the respondents point out within their submissions; based upon the evidence before the High Court, this is a commercial property where there appears to be no dispute between the parties as to the merit of selling the property, but rather a claim made by the appellant as to the price that might be achieved for it. As such it would appear axiomatic that on the facts of this case the appellant’s potential concerns in this regard can be properly assuaged by the fact that damages would in such circumstances be an adequate and indeed proper remedy available to the appellant were the property to be sold at an undervalue.

102. However, I note that on the basis of the evidence before the High Court there was no suggestion that a sale at undervalue was about to occur.

103. In considering the issue of the undertaking as to damages the appellant contends that a strict analysis of his undertaking would disclose it was more than sufficient to protect any loss accruing to the respondents. This was not the finding of the High Court judge who, in my view, meticulously considered all of the figures in arriving at his

conclusion. I also agree with Cregan J.’s assessment where he pointed out where a party has failed to satisfy an outstanding court judgment for a very significant debt an undertaking as to damages is without substance. APPROVED – NO REDACTION NEEDED

104. In my view, as set out above, Cregan J. meticulously examined all of the various criteria advanced by Mr. Harte before the High Court and his careful analysis of the facts and case law led him to the conclusion that it was correct and proper to make an order dismissing the application for interlocutory injunctive relief. I agree with the findings of Cregan J.

105. The interest point that I referred to above was raised by the appellant for the first time on appeal. He contended there has been significant overcharging and accordingly the amount to be repaid is significantly less. He claimed the indebtedness figure would be far lower were the correct interest rate applied to the debt, and that this would reduce his liability to Promontoria a figure which would be adequately accommodated within even the most pessimistic valuation of the property. None of this was argued before the High Court within the affidavits and the judgment itself. As Cregan J. records at para. 93 of the judgment, the appellant’s indebtedness is in the order of €800,000. It is to be recalled that in the summary summons proceedings judgment was obtained in the sum of €1,801,491.82 on 5 March 2015 after a hearing of five days. It is simply not open to the appellant, at this remove, to now seek to contest the figures based on a dispute as to the interest rate which has been charged.

Conclusion

106. It is difficult to escape the conclusion that the outcome of the present application lies on the one hand in Promontoria wishing to conduct the sale of the property, whilst on the other hand, Mr. Harte seeks to do so, presumably wishing to maintain some form of leverage in respect of his ongoing indebtedness.

107. However, the entitlements of the receivers arise from the documentation that has been examined before the High Court and on appeal. They have a right of sale, and it is for Mr. Harte, in seeking equitable reliefs, to satisfy a court of his entitlement to restrain them from exercising those powers. His arguments have failed to persuade Cregan J. and this Court, that he is entitled to such reliefs. The receivers are entitled to exercise their power of sale, and it is for Mr. Harte to pursue such other matters as he may be advised within his plenary application. APPROVED – NO REDACTION NEEDED

108. For the reasons set out above this Court dismisses the appeal and upholds the judgment of the High Court.

Costs

109. As this Appeal is dismissed, the remaining issue is one of costs. The indicative view of this Court is that as the appellant has been unsuccessful in his appeal then pursuant to RSC O. 99 and s.169 of the Legal Services Regulation Act 2015 on the facts of this case costs must follow the event. That event is the fact that this appellant has not succeeded in his appeal and in such circumstances must pay the respondents’ costs with such costs to be adjudicated in default of agreement.

110. Should the parties seek to contend for an alternative Order as to costs then the Court will permit short written submissions by the appellant (not more than 1,500 words)

to be delivered no later than 14 days after the date of the delivery of this judgment. Should the respondent wish to respond to the submission they may do so by written submissions (not more than 1,500 words) within 14 days thereafter.

As this judgment is being delivered electronically Costello P. and Faherty J. have authorised me to record their agreement with it.