The High Court has rejected Francis Davey’s challenges to the authority of two receivers appointed over six mortgaged properties, finding that they remained lawfully appointed after the loans and securities were transferred to Promontoria (Aran) Limited.
In a judgment delivered on 16 May 2017, Ms Justice Murphy also found that Davey had obstructed the receivers by collecting and spending rent that should have been applied to his debt, and by resisting their efforts to collect rents and obtain tenancy information.
The receivers, Kieran Wallace and Mark Etherington, were appointed by Ulster Bank Ireland Limited in September 2013. The properties include premises in Dublin, Navan and Kilcock, Co Kildare. They sought permanent orders requiring Davey to account for rents, provide leases and tenant information, and stop interfering with rent collection.
Davey argued that an apparent defect in a May 2007 facility letter undermined later mortgages and the receivers’ appointments. The court accepted expert evidence that the letter’s signature page was a photocopy of the page from an earlier facility letter. But it made no finding on whether the May letter was valid: the receivers had not relied on it, and the court had not heard evidence from the bank on the issue. It held that any defect in that letter did not invalidate the mortgages, noting that the properties had already been agreed as security under an earlier facility arrangement and that the receivers’ appointments relied on later loan facilities.
The court also rejected Davey’s argument that the transfer to Promontoria required fresh appointments or proceedings. The receivers had been validly appointed by the registered mortgagee before the transfer, and a deed of novation allowed them to continue acting for the new mortgagee, the judge found.
On obstruction, the judgment records that Davey collected €65,680 in 2014 and €11,945 between January and 10 April 2015. The court said the evidence showed he had collected and spent at least €77,000 in rent. It was concerned that he had not shown he complied with an undertaking to direct tenants to pay the receivers, citing evidence that a tenant was paying neither side and that rent for one apartment had been waived.
The court also rejected a challenge to the description of Niles House in the mortgage deed, finding that the property had been identified and that the receivers’ evidence about it was unchallenged.
The judge concluded that the evidence appeared to entitle the receivers to the reliefs they sought, including a €77,625 judgment and orders concerning rent accounts, tenant notices, leases and enforcement information. The judgment did not make those final orders: it concluded by saying the court would hear from the parties as to what orders should now be made.