The High Court dismissed proceedings brought by Thomas Kearney challenging the appointment and authority of a receiver over the Sleepzone hostel property in Galway. It also ordered that two lis pendens registered in connection with the case be vacated and barred Mr Kearney from bringing further proceedings challenging the receivership without the court’s leave.
In a judgment delivered on 4 May 2018, Mr Justice Brian McGovern said the claims repeated issues raised in earlier proceedings, dismissed in 2014, or raised points that could have been made in that case. Applying the rule in Henderson v Henderson, he held that Mr Kearney could not bring those challenges in a later action.
The defendants, Bank of Scotland plc and receiver Patrick Horkan, had sought dismissal under the Rules of the Superior Courts and the court’s inherent jurisdiction. They also sought removal of the lis pendens and an order requiring Mr Kearney to obtain leave before bringing further proceedings concerning the loan facility or mortgage and charge.
Mr Kearney argued, among other things, that the charge had not been registered in the name of Bank of Scotland (Ireland) Limited before the bank appointed the receiver, and that the appointment did not comply with the mortgage terms. The judge said a Supreme Court ruling in Kavanagh v McLaughlin established that the bank’s contractual power to appoint a receiver was not prevented by the registration point. He also found that the other challenges either had been raised, or could have been raised, in the 2012 case.
The judgment records that the loans were secured against the hostel property. The bank transferred its security interest to Pentire Property Finance DAC in 2015, and Pentire was the registered holder of the charge. Pentire was not a party to the proceedings. The judge said the bank had no interest in the land, loan or security at the time of this case.
The judge dismissed the action under Order 19, rule 28 and under the court’s inherent jurisdiction, finding that it disclosed no reasonable cause of action and constituted an abuse of process. He ordered the lis pendens vacated under section 123 of the Land and Conveyancing Law Reform Act 2009, concluding that the proceedings were not being prosecuted bona fide.
The court also made an Isaac Wunder order. Mr Kearney must obtain leave before bringing further proceedings against the defendants or any other party challenging the receivership or the receiver’s authority over the secured property. The order is limited to those challenges; the judgment does not determine the precise amount, if any, owing to Pentire.