The High Court has ruled that Patrick Horkan was validly appointed receiver over property secured by Thomas Kearney’s mortgage, and refused Mr Kearney’s application to raise a new challenge to a later transfer of the receiver’s appointment.
Mr Justice Brian O’Moore delivered the judgment on 4 November 2022. The Court of Appeal had remitted one question to the High Court: whether Mr Horkan’s 2012 appointment as “Receiver” was valid under a mortgage clause providing for the appointment of a “receiver and manager”.
Mr Kearney argued that the appointment was invalid because the deed named Mr Horkan as receiver, without adding “and manager”. The court considered a 2021 Court of Appeal decision, Fennell v Corrigan, which held that an appointment could be effective where the deed conferred management powers, even if it described the appointee as receiver. Mr Justice O’Moore found the mortgage and appointment deed in Mr Kearney’s case materially similar. He concluded that the appointment conferred management powers and was valid under the mortgage. The Special Case was therefore answered against Mr Kearney and in favour of Bank of Scotland plc and Mr Horkan.
The judge separately refused Mr Kearney’s motion to vary an Isaac Wunder order made by the Court of Appeal. That order restricted him from bringing proceedings challenging specified matters, including the bank’s title to the charge and the receiver’s appointment, subject to the question remitted to the High Court.
Mr Kearney sought permission to argue that a 2020 deed transferring the receiver’s appointment from Pentire Property Finance to Pepper Finance was invalid under a mortgage clause requiring written agreement to amend, supplement or novate the mortgage. The judge said the clause did not prevent the transfer of interests in the separate receiver appointment agreements. He also noted that Pentire and Pepper were not parties to Mr Kearney’s application, although the proposed challenge could affect their interests.
The judge further held that the new argument should not be allowed under the principles in Henderson v Henderson. Mr Kearney had challenged the receiver’s position in earlier proceedings but had not raised this ground. The court described the proposed claim as bound to fail, frivolous and vexatious, and an abuse of process. The motion to vary the order was refused.