The High Court has awarded brothers Michael Harrington and Anthony (known as Tony) Harrington €20,000 each for trespass after Gulland Property Finance Ltd appointed a receiver over their Cork properties without first holding the relevant security.
In a judgment delivered on 25 July 2018, Ms Justice Baker found Gulland had no entitlement to appoint Stephen Tennant as receiver in February 2016. The lender had not taken a transfer of the charge over the brothers’ lands until October 2016. The appointment was invalid, and Tennant had no authority to act as receiver during that period.
The court rejected the brothers’ claims that the receiver and Gulland had committed perjury or fraud, and refused their application to strike out the defence and counterclaim on those grounds. The judge accepted that Tennant did not know his evidence about the appointment was false when he swore it. She described the handling of the security documents as careless or “sloppy”, rather than deliberate deception.
The dispute concerned two loans originally advanced by Anglo Irish Bank and later transferred to Gulland. The brothers had continued making interest-only payments, an arrangement accepted by the earlier lenders over many years. Gulland demanded repayment of the combined balance, stated at the time as about €1.26 million including surcharge interest, and ultimately gave 24 hours to pay. The surcharge interest was waived at trial.
Justice Baker held that the demand letters were not validly served to require payment within three days, immediately or within 24 hours, in the circumstances of the long-running payment arrangement and the borrowers’ right to a reasonable opportunity to redeem the secured properties. She found the brothers were not in default on another basis, so Gulland’s counterclaim for the loan balance failed. The judgment does not prevent Gulland from seeking repayment through a suitable new demand, excluding surcharge interest; nor does it require the interest-only arrangement to continue indefinitely.
The brothers also sought damages over the departure of a tenant from one unit, but the court found the evidence did not establish that the receiver’s appointment caused the loss or that another tenant would have been available. The judge accepted evidence of distress but did not award damages for it, citing the rule that general damages for distress do not arise for breach of contract. The €20,000 each was awarded for trespass against Gulland alone.