The Supreme Court has dismissed Tim Sheahan’s appeal against orders allowing receiver Brian McEnery to take possession of a retail garage and service station in Glenbeigh, Co Kerry. The court held that Ulster Bank’s power to appoint a receiver under the mortgage survived the repeal of relevant provisions of the Conveyancing and Law of Property Act 1881.
In a judgment delivered by Justice Elizabeth Dunne on 30 July 2019, the court found that the 2009 Land and Conveyancing Law Reform Act had not removed a receiver-appointment right that formed part of the mortgage terms when the agreement was made. The appeal challenged a 2012 High Court judgment by Justice Feeney, which declared the bank’s right unaffected and ordered Sheahan to deliver possession to McEnery.
Sheahan entered into a mortgage debenture with the bank in October 2007 over the garage and service station. The judgment said the agreement provided continuing security for his present and future indebtedness. In December 2010, the bank issued facilities including two €20,000 overdrafts, a €230,958 demand loan and a €1,484,994 committed loan, alongside three smaller bond facilities.
The bank demanded repayment on 11 April 2011 of €1,833,671.67, plus interest amounts of €9,000 and €25,000.17. After no payment was received, it appointed McEnery as receiver the following day. The bank’s charge had not yet been registered when the receiver was appointed, but its registration application had been made in June 2009 and registration was completed in August 2011. The High Court treated registration as effective from the application date.
McEnery’s attempt to take possession was refused. He obtained an interim possession order on 15 April 2011 and an interlocutory order on 29 April, after giving an undertaking as to damages. The High Court later made the orders challenged in the appeal.
The Supreme Court said section 19(1)(iii) of the 1881 Act gave a mortgagee a power to appoint a receiver as if it had been expressly included in the mortgage deed. That right existed when the 2007 mortgage was made, and the 2009 Act did not expressly remove it. The court also saw no reason to disagree with the High Court’s view that the demand was not precipitous: evidence there had been extensive discussions and negotiations before the demand and appointment.
The Supreme Court therefore dismissed the appeal, leaving the High Court’s declaration and possession order in place.