The High Court has restrained a receiver and a lender from proceeding with the sale of property securing a disputed loan, pending the final determination of the proceedings. The order is interlocutory: the court did not finally decide whether the receiver was validly appointed or whether the loans were in default.
The plaintiff sought declarations concerning the lender’s attempt to call in his loans and, in this application, asked the court to stop action under a deed appointing a receiver dated 20 January 2017. He sought to prevent a sale of the secured property and dealings with its tenants.
The loans originated with Ulster Bank and were transferred to the first defendant, Promontoria (Finn) Limited, in 2015. The plaintiff said the parties had operated for years on an interest-only repayment basis, with full repayment due in 2019. He argued that the lender could not rely on an alleged default dating from 2003 or call in the loans without proper grounds. The defendants disputed that account, said the loans were repayable on demand, and relied on the mortgage terms and the plaintiff’s alleged failure to meet them.
Justice Stewart found a fair issue to be tried over whether the Conveyancing Act 1881 required notice before a receiver could be appointed. The mortgage appeared to incorporate the Act’s restrictions, and the court noted that it did not contain the specific exclusion found in a mortgage considered in an earlier case.
The judge also found arguable issues over whether the loans could be called in on demand in the circumstances and whether the parties’ course of dealing with Ulster Bank gave rise to an estoppel affecting the alleged default. The court said the evidence did not include a complete account of the earlier discussions or documentation about the loans’ repayment history. It found that the plaintiff had continued making payments apart from a gap linked to confusion over the correct account after the loan transfer.
In considering whether damages could compensate the plaintiff if the property were sold, the judge said the case involved a possible interference with property rights alongside unresolved questions about the lender’s conduct and the asserted repayment arrangement. The plaintiff had given an undertaking to pay damages to the defendants if required, which the court accepted. It concluded that the balance of convenience favoured preventing the sale while the claims remained unresolved.
The court ordered the relief sought in the plaintiff’s notice of motion dated 15 February 2017, pending final determination of the proceedings. It did not make a final finding on the validity of the receiver’s appointment, the alleged default, or the plaintiff’s estoppel argument.