Court of Appeal Decision: Bank of Ireland Mortgage Bank u.c. & Anor -v- Hade & Anor
Kane Tuohy LLP Solicitors represented Bank of Ireland Mortgage Bank and its Receiver in an appeal and cross-appeal to the Court of Appeal from the High Court in Bank of Ireland Mortgage Bank u.c. & Anor -v- Hade & Anor.
Date added
12.07.2023
Author
Hugh Kane
Summary of Issues on Appeal
1. Whether the Receiver had unlawfully taken possession of the properties (none of which were the principal private residence of the Defendants at the time of taking possession) and which were given by the Defendants to the Bank as security, by not having obtained a Circuit Court Order in advance of having taken possession.
2. Whether the decision of the High Court in granting exemplary damages against the Receiver was correct.
3. Whether the Bank was entitled to its costs for the judgment granted to it at summary stage by the High Court, which costs had been refused by the High Court.
Receiver and Unlawful Possession
The Court of Appeal noted that Section 97 of the Land and Conveyancing Law Reform Act 2009 in respect of taking possession of mortgaged properties applies only to mortgagees, and that no other section within that Act requires a receiver to obtain a court order prior to taking possession of the secured property over which a receiver has been appointed. The Court of Appeal found that there was no obligation to obtain an Order for Possession prior to taking possession and as such, the Receiver was not a trespasser.
Exemplary Damages Overturned
The Court of Appeal held that the High Court had erred in holding that the Receiver was a trespasser. The Court held that the receiver did not require an Order for Possession from the Circuit Court before taking possession of the properties and the taking of possession was lawful. Therefore, the Court of Appeal held that the Receiver taking possession of the Properties could not attract an award of exemplary damages.
The Court held that the High Court also failed to afford the Receiver fair procedures in that he was never on notice of any such claim for exemplary damages and did not have the opportunity to adduce relevant evidence or advance any submissions on his behalf or address the level of any exemplary damages which the High Court might award.
Furthermore, notwithstanding the fact that the Receiver accepted that he failed to obtain Orders for Sale in advance of selling 3 of the Properties, the Court of Appeal held that this conduct was not of such “moral turpitude or so egregious as to warrant the Court marking its disapproval by awarding exemplary damages” in selling the properties without the required orders for sale.
Accordingly, the Court overturned the award of exemplary damages and allowed the appeal of the Receiver.
Bank's Appeal for Costs
The Court of Appeal noted that: -
· The Bank was entirely successful in the summary proceedings;
· The Defendants had advanced no reason as to why the Bank ought not to recover its costs;
· The usual approach that costs should follow the event should be applied and there appeared to be a conflation of the position of the Bank with the Receiver.
Accordingly, the Court of Appeal allowed the Bank’s appeal and awarded the Bank its costs, of both the Summary and Plenary Proceedings.
A link to the High Court’s Judgments can be found here:
A link to the Court of Appeal’s Judgment can be found here:
https://courts.ie/acc/alfresco/eb908f44-6e65-4f93-b2b4-5d4d612334c1/2023_IECA_292.pdf/pdf#view=fitH
For further information in relation to this Judgment, or related issues, please contact Hugh Kane, Partner, or any member of the Commercial Litigation Team.