The Court of Appeal has allowed Kieran McKenna’s appeal and granted an injunction preventing the completion of a sale of farmland at Killyshavin, Kilbrane, Co. Monaghan, pending the trial of his action. The court found a fair issue to be tried over whether the receiver’s appointment remained valid after the mortgage loan was transferred to Pepper Finance Corporation (Ireland) DAC.
The judgment, delivered by Ms Justice Faherty on 29 November 2024, does not decide whether the receiver’s appointment was invalid or whether the proposed sale contract was unlawful. Those questions remain for the full trial. The appeal concerned interlocutory relief, and the court’s conclusion was that McKenna had raised an arguable issue requiring examination at trial.
McKenna borrowed €220,000 from Irish Nationwide Building Society in 2004, secured by a mortgage over the lands. Shoreline Residential Ltd appointed Ken Fennell as receiver in September 2018. The loan and mortgage were transferred to Pepper in April 2019, and a deed novating the receiver’s appointment was executed in August 2019, stated to take effect from April. Fennell contracted to sell the lands to a third party for €120,000 in July 2021.
McKenna argued that the receiver’s appointment had to be novated at the same time as the loan transfer, and that the later deed could not retrospectively repair the gap. Pepper and Fennell disputed that position. They argued that the receiver’s appointment continued and that his duties, including accounting for proceeds, followed the mortgage to Pepper. The court said the arguments raised about the timing and effect of the novation had not been considered in the earlier Court of Appeal decision in *Healy v McGreal* and warranted examination at trial.
In weighing the application, the court acknowledged McKenna’s substantial delay and the existence of a sale contract. It also noted his weak undertaking to pay damages if he ultimately lost. But the court considered that his property rights could be affected if the sale completed and he later succeeded at trial. The underlying action was also well advanced, and the respondents had not produced evidence that the buyer was contemplating proceedings or that either the buyer or respondents would suffer specific prejudice from an injunction.
The Court of Appeal therefore concluded that delay was not a bar to relief and allowed the appeal. It proposed that McKenna receive his appeal costs, subject to any party notifying the Court of Appeal Office within 14 days that it sought a different costs order. The ruling does not determine the final claims in the plenary action.