The High Court continued an interlocutory injunction preventing the marketing or sale of Patrick Farrell’s property at Belmont, Drumsna, Co. Leitrim, and restraining interference with his possession of it. The court also continued an order requiring the defendants to vacate the property. It did not decide whether the mortgage was ultimately enforceable and reserved final orders and costs for further hearing.
The injunction had first been granted on 18 May 2018, pending further interlocutory or final order. In a judgment delivered on 18 December 2018, Ms Justice Pilkington considered whether it should remain in place while the dispute proceeded.
The dispute concerned a mortgage executed by Mr Farrell in favour of Ulster Bank in 2003, and his later personal guarantee for up to €2 million in connection with loans to Pat Farrell Builders Drumsna Limited. Promontoria (Aran) Limited, which the judgment also calls PAL, demanded €1.76 million under the guarantee in 2016. In 2017, it sought possession of the property under the 2003 mortgage. Ken Fennell was identified in the judgment as the receiver.
The defendants argued that the registered mortgage secured all sums due, that the debt had been called in and that the receiver was validly appointed. They said there was no serious issue to try. The judge accepted the mortgage was an “all sums” mortgage and the receiver’s appointment was valid, but found a serious issue remained over whether the charge could be enforced in the circumstances.
The judge focused on Ulster Bank’s letters about the original €95,000 overdraft, including a 2004 letter saying a formal release would issue, and on the wording of the company loan offers in 2005 and 2008. Those offers referred to Mr Farrell’s home deeds as collateral, while his solicitor’s affidavit said the title deeds were not lodged with the bank until 2009. The judge said it was unclear from the documents that the 2003 mortgage was intended to secure the later facilities. She also identified a possible estoppel issue. These were questions for trial, not final findings on enforceability.
On damages and convenience, the judge accepted that Mr Farrell appeared to lack resources, but said the property was his family home and the only property in which he had an economic interest. A sale could not, in her view, be adequately compensated later. She concluded that the balance favoured maintaining the status quo and granted the injunction on the terms sought. The parties were to be heard on final orders and costs.