The High Court has dismissed an application by Joseph Delaney to prevent Allied Irish Bank and two receivers from trespassing on or selling a property at 82 JKL Street, Edenderry, Co Offaly.
Mr Justice Kevin Cross ruled on 4 February 2014 that Delaney had not established an entitlement to the lease on which he relied for the purposes of his injunction application. He also held that damages would be an adequate remedy if Delaney later succeeded in his substantive proceedings.
The judgment records that Delaney, who appeared in person, said he had agreed to a 24-year-and-nine-month lease from his former accountant, identified in the judgment as Mr G.K. The lease was signed on 12 December 2008. Delaney said he intended to establish a business at the premises and began work there in April 2009, but left after a bank manager told him the property was mortgaged to the bank.
The judgment says Delaney’s former wife had withdrawn nearly €400,000 from accounts in 2008, with his agreement, and paid the money to Mr G.K. The court described Delaney as having acted in good faith and as apparently having been grossly deceived by Mr G.K. It stressed, however, that the injunction hearing did not decide Delaney’s substantive claims against the bank or receivers.
The defendants argued that the lease could not bind them because the property was already subject to a mortgage and the bank had not given written consent to the lease. They also relied on an earlier High Court decision concerning leases granted without a mortgagee’s consent. Delaney argued that the bank was prevented from relying on its mortgage rights because of the bank manager’s assurances and other circumstances.
Cross J rejected those arguments for the purpose of the application. He said the manager’s offer to try to resolve the issue did not amount to an agreement or acknowledgement of title, and that the bank’s handling of payments into Mr G.K.’s rental accounts did not create an estoppel. The court also said it had not determined whether the bank allowed other mortgaged properties to be leased without consent.
The judge concluded that Delaney failed both the first and second tests for an injunction under the Campus Oil principles: he had not shown an entitlement to the lease against the defendants, and damages would be adequate if he ultimately proved his claims. The court dismissed the application. The substantive proceedings, including claims alleging negligence and breaches of duty, were not adjudicated in this decision.