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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Halpin & Ors v Everyday Finance DAC & Ors, Stairway Property Company Ltd v Halpin & Ors (Approved) [2025] IEHC 201 (08 April 2025) URL: https://www.bailii.org/ie/cases/IEHC/2025/2025IEHC201.html Cite as: [2025] IEHC 201 |
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THE HIGH COURT
[2025] IEHC 201
Record Number 2023 4748 P
Plaintiffs
PATRICK HALPIN, ANN KEANE, ELEKTRON HOLDINGS LIMITED
-and-
Defendants
EVERYDAY FINANCE DAC, STAIRWAY PROPERTY COMPANY LIMITED, THE ATTORNEY GENERAL AND IRELAND
Record no. 2023 5300 P
STAIRWAY PROPERTY COMPANY LIMITED
Between:
Plaintiff
- and
PATRICK HALPIN, ANN KEANE, ELEKTRON HOLDINGS LIMITED (IN RECEIVERSHIP) AND MADISON MANOR LIMITED
Defendants
JUDGMENT of Ms Justice Nessa Cahill delivered on 8 April 2025
Introduction
1. This judgment concerns two cases which were heard together in November and December 2024 ("the Proceedings"). They both concern, in broad terms, the ownership and occupation of a property at Park Avenue, Sandymount in Dublin 4 known as "Aberdeen Lodge" which consists of a sixteen-bedroom guesthouse and private residential accommodation ("Aberdeen Lodge" or "the Property").
2. The first case is a constitutional challenge to sections 19(1) and 19(21) of the Conveyancing Act 1881 ("the Act of 1881") which was issued on 28 September 2023 in which the Plaintiffs seek various orders challenging, and arising from the challenge to, the constitutionality of those provisions ("the Constitutional Challenge"). In broad terms, the Plaintiffs in the Constitutional Challenge ("the Constitutional Plaintiffs") claim that the power to sell a family home without court control or notice or engagement with the family residing in the Property is unconstitutional (among other claims). This challenge is made arising from the fact that the Property was sold by the entity then-entitled to the mortgage over it, Everyday Finance DAC ("Everyday"), to Stairway Property Company Limited ("Stairway") without such engagement with the Constitutional Plaintiffs or court oversight. Additional claims are also made in those proceedings, including a claim of a right to a licence, right to reside, life estate or other equitable interest in the Property ("the Licence Claim").
3. The second case is an application for possession of Aberdeen Lodge, which issued on 2 November 2023, some five weeks after the Constitutional Challenge ("the Possession Proceedings"). In these proceedings, Stairway seeks various orders intended to secure possession of the Property and related matters. The Defendants to those Proceedings, the Constitutional Plaintiffs together with another entity, Madison Manor Limited ("Madison") (referred to together in this Judgment as "the Halpin Defendants"), issued a counterclaim against Everyday challenging the manner in which the Property was sold and seeking an order setting aside that sale.
4. The Proceedings were heard together between 26 November 2024 and 6 December 2014 and three witnesses gave evidence: Mr Halpin, Mr Gareth Keogh (for Everyday); and Mr Brian Egan (for Stairway).
5. The following are addressed in this Judgment:
Relevant facts
Introductory Matters
Power of Sale
Constitutional Challenge
Preliminary objections
Henderson v. Henderson
Locus Standi
Futility objection
Frivolous and vexatious objection
Estoppel
Provisions of the Constitution and ECHR Relied Upon
Presumption of Constitutionality
Article 40.5
Article 8, ECHR
"Housing Loan"
Doctrine of Proportionality
The Licence Claim
Preliminary objections
Henderson v. Henderson
Estoppel as a defence
Evidence concerning the Licence Claim
Additional submissions regarding the Licence Claim
Reliance on estoppel by the Constitutional Plaintiffs
Possession Proceedings
Pleadings
Issues in the Possession Proceedings
Interests of Mr Ryan
Relevance of the Receiver Possession Order
Proportionality
Obligation to obtain the best price
Other Claims Advanced
Obligation to act reasonably
Public policy, common good
Conclusions
Relevant Facts
6. This section of the Judgment summarises facts which are not in dispute or, where they are, to identify that factual contest.
Acquisition and occupation of the Property
7. According to the case as pleaded by the Constitutional Plaintiffs, Elektron Holdings Limited (the third Plaintiff in the Constitutional Challenge and third Defendant in the Possession Proceedings, "Elektron") acquired the Property in 1989.
8. Elektron was solely owned by Mr Halpin and was then owned by Ms Keane from 2012 / 2014 (there is some ambiguity in the pleadings in this respect) until August 2021 when the shares were transferred to Madison Manor Limited (the fourth Defendant in the Possession Proceedings, "Madison").
9. Madison, the entity which carries on the hotel business at the Property, is solely owned by Ms Keane. She is also its director and Mr Halpin is its company secretary.
10. Mr Halpin has occupied the Property since 1990, when he was married to his first wife and resided there with her and their children. Ms Keane has resided there with him since 1997. Their two children (ages 11 and 17) reside there also. Mr Halpin and Ms Keane got married a week before the hearing of the Proceedings. It is not in dispute that the Property is the principal primary residence of the family (although it is denied that they are lawfully in occupation).
The Loans and Mortgages
11. Between 1998 and 2009, Elektron (and Crossplan Investment Limited, another company owned and/or controlled by Mr Halpin and Ms Keane) took out a series of eleven loans with Irish National Building Society ("INBS") ("the Loans"), which amounted to c 25 million.
12. The Loans were secured by mortgages on the Property ("the Mortgages"). This was done by the conveyance of the fee simple to INBS subject to Elektron's equity of redemption.
13. The Loans and Mortgages were transferred from INBS to Anglo Irish Bank Corporation plc (which later became Irish Bank Resolution Corporation, "IBRC") and the liquidators of IBRC then sold them to Kenmare Property Finance Limited ("Kenmare"), on 23 May 2014.
14. Kenmare sold the Mortgages to Pepper Finance (Ireland) DAC ("Pepper"), on 11 September 2020. Pepper then entered a global deed of transfer with Everyday Finance DAC ("Everyday") on 19 May 2023, which included the transfer of the Mortgages.
15. There was evidence and submissions during the hearing before me about the background to, and purpose of, the Loans and about investments in, and sales of, other properties.
16. This history and background have been addressed comprehensively in the judgments delivered in the Prior Litigation. Save to the extent that it is directly relevant to the issues I have to decide, this background is not re-visited or repeated in this Judgment.
Sale to Stairway
17. On 11 September 2023, Everyday conveyed the Property without vacant possession to Stairway Property Company Limited ("Stairway"), relying on the power of sale contained in section 19 of the Conveyancing Act 1881 ("the Act of 1881").
18. On 12 September 2023, Stairway's solicitors wrote to Mr Halpin, Ms Keane, Madison and the occupants of Aberdeen Lodge notifying them that Stairway had acquired the freehold interest in the Property and calling on them to immediately undertake to vacate the Property within 14 days.
19. No response was received and the Property was not vacated.
20. Further letters were sent on 29 September 2023 and 5 October 2023, calling on them to vacate the Property.
21. Mr Halpin, Ms Keane, their children, and Madison remain in occupation of Aberdeen Lodge.
Prior Litigation
22. All parties place emphasis, for different reasons, on the history of litigation surrounding the Property, which includes eleven reserved judgments of the Superior Courts in the period from 2013 to 2022 ("the Prior Litigation"). The following summary is based on the case pleaded in the Statement of Claim in the Constitutional Challenge (save where otherwise indicated).
23. A receiver was appointed on 17 February 2012 by the then-holder of the security, IBRC ("the Receiver"). The Receiver issued two sets of proceedings: proceedings seeking directions pursuant to section 316 of the Companies Act 1963 to determine the right of Mr Halpin and Ms Keane to withhold possession of the Property ("the Section 316 Proceedings") and a separate special summons seeking possession of the Property ("the Receiver Possession Proceedings"). The Receiver was successful in both. Peart J. granted an order of possession on 17 December 2013, which was upheld by the Supreme Court on 11 March 2016 ("the Receiver Possession Order"). The Constitutional Plaintiffs assert that the Possession Order lapsed in May 2022 (a plea which is not admitted by Everyday or Stairway and Stairway further does not admit that the Order needed to be renewed or that this plea is otherwise relevant to Stairway's acquisition of the Property).
24. On 29 November 2012, Elektron issued proceedings against the Receiver, IBRC, and the State, seeking a declaration that the appointment of the Receiver was invalid, which proceedings were discontinued by Elektron on 19 December 2012 ("the Discontinued Proceedings").
25. Ms Keane and Elektron issued proceedings against the Receiver and Kenmare in July 2015, challenging the appointment of the Receiver ("the Dismissed Proceedings"). These proceedings were dismissed by the High Court on 25 July 2016 as a collateral attack on prior Court orders, a decision which was upheld by the Court of Appeal in a judgment delivered on 9 May 2018.
26. On 14 October 2016, the Receiver issued proceedings for attachment and committal against Mr Halpin and Ms Keane, which proceedings were ultimately adjourned with liberty to re-enter. Everyday asserts that the reason for this was Mr Halpin's ill health. The position advanced by the Constitutional Plaintiffs in their written submissions in the Constitutional Challenge is that the motion for contempt was adjourned on the basis of ongoing payments being made by Mr Halpin and Ms Keane and, it is said, no further demand to gain possession was made by the Receiver. A formal deed of discharge of the Receiver issued on 16 February 2024.
27. Separately, Kenmare petitioned for an order of bankruptcy as against Mr Halpin. This petition was adjourned repeatedly. According to Everyday's Defence, this was owing to Mr Halpin's ill health, and Covid, and the petition was ultimately struck out on 4 December 2023, after Everyday acquired the Loans.
28. In addition, IBRC obtained judgment against Mr Halpin in the amounts of 20,000,000 and 6,338,369 on 4 October 2012 and 7 November 2013 respectively on the basis of his guarantee of the debts of a separate company, Crossplan Investment Limited ("Crossplan"). This was reduced to 2,404,866 owing to sales achieved by the Receiver.
29. Everyday in its Defence pleads that Mr Halpin issued personal insolvency proceedings in 2018, in which he initially claimed that he had an ownership interest of 0.01% in the Property, a claim that he later abandoned. In its Defence, Stairway refers to the finding by McDonald J. that "no case was made that Mr Halpin had any ownership interest in Aberdeen Lodge" (In the matter of the Personal Insolvency Acts and in the matter of Patrick Halpin (a debtor) [2019] IEHC 87).
30. A further set of proceedings which - broadly speaking - concerned Aberdeen Lodge, was a District Court criminal process, which was commenced on foot of a complaint made by Mr Halpin that two IBRC employees had committed the offence of dishonesty contrary to section 6 of the Criminal Justice (Theft and Fraud Offences) Act 2001. The Supreme Court found these proceedings to be an abuse of process by Mr Halpin.
31. The High Court (Twomey J.) in the Dismissed Proceedings found that,
"the fact that Mr Halpin has been found to have abused process in relation to the same borrowings and the appointment of the same receiver to the same property is relevant to a claim of abuse of process in relation to, essentially, the same dispute against Elektron since he controls that company and against Ms Keane, since he is her partner." (Elektron v. Kenmare Property Finance Limited [2016] IEHC 438 Ά15, although the Court of Appeal (Finlay Geoghegan J.), in upholding that judgment, did not take those previous findings of abuse of process into account ([2018] IECA 131).
The Stay
32. By order dated 17 October 2013, the High Court (Peart J.) granted a stay on the taking of possession in the Receiver Possession Proceedings until 1 February 2014, with liberty to apply to extend that stay.
33. By order dated 11 July 2014, the Supreme Court extended the stay on the execution of the Receiver Possession Order until the determination of that appeal.
34. Following the dismissal of that appeal, the Supreme Court ordered on 8 April 2016 that the stay would continue to 6 May 2016.
35. On 16 December 2016 an order was made by the Court of Appeal in the Dismissed Proceedings that there be a stay on the Receiver Possession Order on condition that Elektron and Ms Keane would pay 3500 per month until the determination of the appeal (being 1750 as to interest and 1750 in respect of capital on the Loans). This was made on consent.
36. Following the dismissal of the appeal in the Dismissed Proceedings, the Court of Appeal made an order on 6 June 2018 staying the Receiver Possession Order pending the determination of an application for leave to appeal to the Supreme Court and pending the determination of that appeal (if leave was granted). This was on condition that Ms Keane and Elektron pay to Kenmare and the Receiver the sum of 5,000 per month (being 3,500 in respect of capital and 1,750 in respect of interest) ("the Final Stay").
37. On the 15 February 2019, the Supreme Court refused leave to appeal in the Dismissed Proceedings.
38. The Final Stay expired on that date.
Family Home Declarations
39. On five separate occasions, Mr Halpin made a statutory declaration for the purposes of the Family Home Protection Act 1976 in which he declared that the Property was not a family home; that there was no lease, licence or similar agreement entitling any person to reside at the Property; and that the Property was not subject to any trust, licence or proprietary interest in favour of any person. These declarations were made by Mr Halpin on 14 February 2003, 21 December 2005, 22 December 2005, 8 February 2007 and 17 July 2009 ("the Family Home Declarations").
Key Facts
40. For the purpose of these proceedings, the key facts which are not in dispute are that:
(a) Elektron was the holder of the legal title to Aberdeen Lodge;
(b) Loans in the amount of 26 million were obtained by Elektron and Crossplan;
(c) A sum in excess of 31 million is now owed on foot of the Loans;
(d) Aberdeen Lodge was provided as security for those Loans;
(e) There is a lengthy history of default on the Loans;
(f) The Receiver was appointed on 17 September 2012;
(g) The Receiver Posseession Order was made by the High Court on 17 December 2013 and upheld by judgment of the Supreme Court of 11 March 2016;
(h) The Final Stay on the Receiver Possession Order expired on 15 February 2019;
(i) Mr Halpin, Ms Keane, their children, and Madison continue to occupy the Property;
(j) Monthly payments of different amounts (varying from 1,750 to 5,000 monthly) have been made to the different mortgagees for most of the period from December 2016 to September 2023 (other than a period during the Covid pandemic).
Introductory Matters
Issues to be decided
41. The scope of the issues that fell to be determined in these Proceedings was a question of some controversy between the parties at the hearing.
42. An issues list had been agreed in the Constitutional Challenge ("the Agreed Issues List") but the case presented at trial was not confined to or based on the list so identified. There was no list agreed in the Possession Proceedings. Accordingly, this judgment focuses on the issues that were in fact presented and argued at the hearing and is not based on any list of issues.
43. One specific objection raised by counsel for Everyday was that, during the hearing, the Constitutional Plaintiffs advanced a challenge to the validity of Everyday's power of sale and the validity of the demands for payment. The objection was that this case was not pleaded against Everyday and that it would be (and was) at odds with the Constitutional Challenge. The point is made that the evidence, submissions and proofs were directed to the case as pleaded rather than the case sought to be run at trial.
44. During the hearing, a consensus emerged that the right of Everyday to exercise the power of sale was not directly challenged as against Everyday; that no relief is sought against Everyday arising from any such assertion; and there was no onus on Everyday to demonstrate its right to exercise that power. The situation is different as regards Stairway: in the Possession Proceedings, Stairway bears the burden of demonstrating the right to possession, which includes demonstrating that Everyday had title to the security and validly transferred the Property to Stairway.
45. Accordingly, I will assess the power of sale on the basis it is part of Stairway's case to prove in the Possession Proceedings. The only issue directly pleaded against Everyday in the Possession Proceedings is the counter- claim challenging the manner in which the Property was sold to Stairway.
46. There were some additional objections to how the case was presented at trial on behalf of the Constitutional Plaintiffs. In particular, there was a repeated objection that the Constitutional Plaintiffs focussed heavily on the validity of the sale of the Property during the hearing, rather than the Constitutional Challenge, whereas the emphasis of the pre-trial preparation was on the Constitutional Challenge (which was issued first in time), with the Possession Proceedings being secondary only. This position is borne out by the written submissions of the Constitutional Plaintiffs which are entirely concerned with the Constitutional Challenge.
47. While there was a risk of litigation disadvantage to the Defendants arising from the approach taken, I am satisfied that this was addressed during the trial, by ensuring each party had a full opportunity to present their positions on each point made (including the invitation to Stairway to make opening oral submissions in the Possession Proceedings and the affording of rights of rejoinder where sought).
48. However, the manner in which the cases were presented has engendered a degree of confusion and incoherence as between the two Proceedings. This heightens the need to pay close attention to the cases actually pleaded and advanced by each party; to consider inconsistences where apparent; and to ensure that the burden is borne by the correct party in each instance. This is the approach I endeavour to take in this judgment.
Correct Sequence
49. A related point that arose concerned the correct sequence for addressing the various issues in the Proceedings. While there were some divergences between the parties, counsel for the Constitutional Plaintiffs ultimately agreed with counsel for the State that the correct sequence was to assess whether the power of sale was properly exercisable and properly exercised (thereby engaging the power in section 19), before determining the Constitutional Challenge, and finally Stairway's claim to possession.
50. I am satisfied that the Constitutional Challenge is necessarily predicated on Everyday having enjoyed and validly exercised a power to sell pursuant to section 19, and it would be impermissible to give a hypothetical determination as to the constitutionality of that provision if that was not the case. Accordingly, it must first be ascertained whether the power of sale provided for by section 19 was validly exercised before the Constitutional Challenge can be assessed. That is the approach I take in this judgment.
Terminology of "Family Home"
51. There was a question of nomenclature which divided some of the parties at the hearing. This stemmed from the use by the Constitutional Plaintiffs of the label "family home" (which term was capitalised in the pleadings) to describe the Property. It is pleaded in the Statement of Claim delivered in the Constitutional Challenge on 23 November 2023, when each of the Loans was obtained by Elektron, it was or ought to have been known that the Property was the family home of Mr Halpin and "over time" of Ms Keane and their children.
52. None of the Defendants deny their residence at the Property, but the legality of that residence is firmly in issue. Further, Stairway by its Defence, admits it was known they resided at the Property, but does not admit that the Property is a "family home" as a legal term of art, or that the protections of a family home are available.
53. There is no factual dispute that (a) Mr Halpin, Ms Keane and their children reside as a family in a part of the Property, (b) Elektron alone owned the Property at all material times (c) neither Mr Halpin nor Ms Keane ever owned an interest in the Property and (d) the Property consists of a commercial sixteen bedroom guesthouse business operated by another company, Madison, as well as a residence.
54. In light of these facts, there was no attempt by the Constitutional Plaintiffs to contend that the Property was a "family home" for the purposes of the Family Protection Act 1976 (as amended). That case would have been manifestly unfounded for several reasons, as well as being at odds with the Family Home Declarations. Indeed, questions of the residence of the family at the Property and the constitutional protection of the dwelling were raised and rejected as not necessary to the determination of the rights of the mortgagees in the Section 316 Proceedings (McCann v. Halpin [2013] IEHC 495 at Ά22, per Peart J.) and would now be firmly barred by the rule in Henderson v. Henderson [1843] 3 Hare 100.
55. Significantly, Peart J. also records that the Section 316 Proceedings as formulated did include questions about whether the Property was a family home and what impact this had on the powers of the Receiver but "they have abandoned their original contention that the property is a family home" (Ά28).
56. In these Proceedings, far from seeking to argue for any statutory significance to attach to the term, counsel for the Constitutional Plaintiffs contended in oral submissions that it was a matter of "logic" that the property was in fact a "family home", which is very different to asserting it fell within that designation as a matter of statute.
57. Given the foregoing, I do not need to decide Stairway's defence that an estoppel arises to prevent an argument that the Property was a "family home", as the Constitutional Plaintiffs simply do not seek to make that case, and for very good reasons.
58. This should not obscure the fact that the term "family home" has a particular statutory significance which is not applicable here and, consequently, in order to avoid any misapprehensions or confusion, I will refer to Aberdeen Lodge as "the Property" in this judgment. This is done on the understanding that the agreed facts are as summarised above and, in particular, that it is not in dispute that Mr Halpin, Ms Keane and their children do reside in a part of the Property as their home.
Power of Sale
59. Section 19 is the provision that is central to these Proceedings and, most particularly, section 19(1)(i):
"A mortgagee, where the mortgage is made by deed, shall, by virtue of this Act, have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further (namely):
(i) A power, when the mortgage money has become due, to sell, or to concur with any other person in selling, the mortgaged property, or any part thereof, either subject to prior charges, or not, and either together or in lots, by public auction or by private contract, subject to such conditions respecting title, or evidence of title, or other matter, as he (the mortgagee) thinks fit, with power to vary any contract for sale, and to buy in at an auction, or to rescind any contract for sale, and to re-sell, without being answerable for any loss occasioned thereby..."
60. Section 20 sets out the criteria for the exercise of the power of sale conferred by section 19:
"A mortgagee shall not exercise the power of sale conferred by this Act unless and until
(i) Notice requiring payment of the mortgage money has been served on the mortgagor or one of several mortgagors, and default has been made in payment of the mortgage money, or of part thereof, for three months after such service; or
(ii) Some interest under the mortgage is in arrear and unpaid for two months after becoming due; or
(iii.) There has been a breach of some provision contained in the mortgage deed or in this Act, and on the part of the mortgagor, or of some person concurring in making the mortgage, to be observed or performed, other than and besides a covenant for payment of the mortgage money or interest thereon."
Transfer of Title to Everyday
61. In order to obtain an order for possession of the Property, Stairway must demonstrate that it holds valid title to the Property. This in turn imposes the burden on Stairway to show that the Mortgages were validly transferred to Everyday and that Everyday validly transferred the Property to Stairway.
62. It is common case that, in light of the Prior Litigation (including the issue of the Dismissed Proceedings by Ms Keane and Elektron against Kenmare), there is, and can be, no dispute about the entry into or the validity of the Loans or Mortgages or the transfer of the Mortgages (via INBS, Anglo and IBRC) to Kenmare.
63. Nonetheless, each of the eleven deeds of Mortgage from the original deed of 9 October 1998 onwards, and the deeds of transfer of those mortgages from INBS to Anglo; from IBRC to Kenmare; from Kenmare to Pepper; from Pepper to Everyday; and from Everyday to Stairway were opened by counsel for Stairway and the transfer of the relevant interests was evidenced.
64. The only aspects of the chain of title that have not been the subject of the Prior Litigation are the transfers of the Mortgages from Kenmare to Pepper on 7 August 2020; from Pepper to Everyday on 19 May 2023; and from Everyday to Stairway on 11 September 2023. These are the links in the chain of title that now require specific attention.
65. For completeness, it is important to note some relevant provisions of the original Mortgage. For example, the Mortgage entered between Elektron and INBS on 17 July 2009 provides that all monies secured become immediately payable if demand in writing is made for payment of the monies secured or if there is default for seven days in the payment of any interest owed (clause 6). It also provides that INBS may transfer or assign the benefit of the mortgage without notice to the mortgagor and that, in the event of such transfer or assignment, all rights of INBS that are assigned shall be exercisable by the transferee (clause 36(1)(a)).
66. Turning then to the deeds I need to assess, the deed of conveyance and assignment from Kenmare to Pepper of 7 August 2020 was fully opened to me, without any redactions, as was the deed of confirmation of 11 September 2020 (rectifying the schedule to the former to ensure it met the requirements of the Property Registration Authority). It was demonstrated that the same eleven mortgages with the same eleven serial codes which were the subject of the original mortgages were included in that transfer to Pepper.
67. The deed of assignment from Pepper to Everyday of 19 May 2023 was also opened comprehensively (the only redacted information being information in the schedule to the deed concerning mortgages with third parties which have no relevance to these Proceedings). I am satisfied that, on its face, it evidences the transfer of title to the eleven Mortgages to Everyday.
68. The deed from Everyday to Stairway of 11 September 2023 was similarly comprehensively opened and no redactions were made to the document as opened to me. By that deed, Everyday and Stairway agreed to the sale of the Property to Stairway for the sum of 1.8 millionF which included among the documents schedule, copies of the letters of demand issued to Elektron in 2015 and 2017, as well as documents concerning the Prior Litigation. That deed on its face demonstrates the transfer of title to the Mortgages to Stairway.
69. In oral submissions, the Halpin Defendants raise several grounds of defence and challenges to the validity of these transfers. Before considering these, it must be noted that the Constitutional Challenge rests on the power of sale having arisen and there are also several aspects of the cases presented by the Constitutional Plaintiffs which acknowledge and hinge on the transfer of title to the Mortgages. For example, it is pleaded in the Statement of Claim (Ά27) that Everyday "has conveyed the Family Home without orders of this Court"; reliance is placed on the payment of monies to the various mortgagees in the chain of title; in opening oral submissions on behalf of the Constitutional Plaintiffs, a list of the mortgagees through whom title was passed was given (from Anglo to IBRC, from IBRC to Kenmare, from Kenmare to Pepper, from Pepper to Everyday); reliance is also placed on attempts to negotiate with Pepper for the sale of the Property; and it is asserted that Everyday should have engaged with the Constitutional Plaintiffs in relation to the sale of the Property.
70. None of these positions is consistent or reconcilable with a view that the transfer to the Mortgages did not pass to Everyday following the chain of transfers identified in the Possession Proceedings. Indeed, prior to the hearing, no specific ground of challenge to the power of sale had been particularised in the defence to the Possession Proceedings or addressed in written submissions. All that is pleaded in that defence is that the Constitutional Challenge provides a defence to the Possession Proceedings, and there are then bare denials of the validity of the transfers from Kenmare to Pepper and from Pepper to Everyday (the transfer to Kenmare was not challenged).
71. Despite this, certain new points are made in oral submissions on behalf of the Constitutional Plaintiffs challenging the adequacy of the proof of the transfers. Given the lack of any advance notification of the nature of these challenges, I have a misgiving about the propriety of their being raised in this manner. Counsel for the Constitutional Plaintiffs contends that the bald denials in the defence in the Possession Proceedings were sufficient and that it was the decision of Stairway not to seek particulars that is responsible for these matters being raised for the first time at the hearing.
72. I do not agree. If the Halpin Defendants intended to raise specific, technical grounds of defence to the Possession Proceedings (as distinct from relying on the Constitutional Challenge), these challenges could and should have been pleaded or, at a minimum, should have been addressed in written submissions. The fact that there was no prior disclosure or notification of the grounds raised at the hearing to challenge Everyday's power of sale and the validity of the transfer to Stairway (other than the Constitutional Challenge) is less than ideal, but I will nonetheless deal with the objections made as succinctly as possible.
73. First, a dispute was raised about whether documents relied upon were business records for the purpose of the Civil Law (Miscellaneous Provisions) Act 2020 ("the Act of 2020") and, if they were, it was said that that "doesn't mean that the court has to accept everything that is in them" (day 5, page 63). Counsel for Stairway pointed out that the documents relied upon are documents evidencing the transfer of the security (which is what is relevant to these Proceedings), which are business records within the meaning of section 13 of the Act of 2020, and, according to that provision, are "presumed to be admissible as evidence of the truth of the fact or facts asserted". No dispute was raised about this in reply by the Constitutional Plaintiffs, and no reason was advanced as to why section 13 does not apply. In short, there was no basis presented in advance of, or during, the hearing to rebut the presumption that the deeds relied upon and opened to me are admissible as evidence of the truth of the facts stated in them and I proceed on the basis that the presumption enshrined in section 13 does apply here.
74. Second, a complaint was made repeatedly on behalf of the Halpin Defendants at the hearing about what were said to be "heavily redacted documents" and an "extraordinary" level of redaction. However, there is no indication of why or how the redactions were asserted to be material.
75. In fact, the relevant deeds of transfer were opened comprehensively to me and the operative parts of the documents were not redacted. Taking the three deeds that needed to be specifically assessed, the deeds of transfer of the mortgages from Kenmare to Pepper and of the Property from Everyday to Stairway were opened to me without redactions. In the global deed of transfer from Pepper to Everyday, the only information redacted was information identifying third parties' mortgages. Counsel for the Halpin Defendants refer to pages and pages of redactions, but with no acknowledgment that the redactions only conceal information about third party mortgages. There was no plausible basis to assert that the redactions were excessive or prevented the demonstration of the transfers of title to the Mortgages. There was no merit whatsoever to this complaint.
76. Third, in closing replying submissions a new technical point was raised by the Halpin Defendants for the first time. This was a complaint that a power of attorney conferring authority on Mr Keogh to act on behalf of Everyday appeared to have expired. This objection, and the document on which it was based, were first raised in replying submissions on the afternoon of the final day of the hearing. Neither had been referred to previously in the pleadings or written or oral submissions and no evidence was led directed to this question, which I find to have been improperly and impermissibly raised, with no prior notice to Stairway. In any event, I find the point to be lacking in merit, as the material document relied upon by Stairway was the deed of conveyance by Everyday and there was no basis or need to doubt the authority of the signatory to same (the same individual who gave evidence on behalf of Everyday at the hearing).
77. Fourth, the Constitutional Plaintiffs raised an issue about a transfer from Everyday to Stairway of 11 September 2023 not being executed on behalf of Stairway. This was raised during the cross-examination of Mr Egan, who gave evidence that he was never asked to execute the deed of conveyance in question. Counsel for the Defendants attached some weight to this matter in challenging the proofs on which Stairway relied and went further, asserting that the non-disclosure of this fact to the Court during an application for short service of an injunction application was a "significant point" (day 5, page 73) and a "significant omission" (day 5, page 75).
78. The relevance of the deed not having been executed was rejected by Stairway in replying submissions. The authority relied upon was the judgment of the Supreme Court (Clarke J.) in Dunnes Stores v. Camiveo [2015] 2 IR 698 ("Camiveo"). There, the deed of assurance by which Camiveo had acquired the leasehold interest in the relevant properties was executed by the vendor but not by Camiveo. There was no dispute that the monies were paid to the vendor. The tenant (Dunnes Stores) argued that, owing to the non-execution of the deed, Camiveo was not entitled to an interest in the leases in question or to collect the rent and service charges to which the proceedings related. The key dispute in this respect was whether the non-execution of the deed by Camiveo precluded the transfer of title to Camiveo such that it could not enforce its rights under the leases. Clarke J (Laffoy and Charleton JJ. concurring) held:
"[17] The legal position is, in my judgment, well settled and is simply and authoritatively stated in the leading text book, Norton, A Treatise on Deeds (2nd ed., Sweet & Maxwell, 1928) at p. 26, where the author says that "[t]hough execution of a deed is necessary to bind the grantor, yet a party who takes the benefit of a deed is bound by it though he does not execute it".
[18] For the purposes of this case, there seems to me to be two important aspects to that clear principle. First, in the ordinary way, a deed does not have to be executed by the grantee in order that it take effect in the grantee's favour. A deed executed by the grantor (the vendor in the case of an ordinary purchase transaction) will transfer the interest of that party once it is executed by the party concerned and irrespective of whether it has been executed by the party to whom that interest is to be transferred.
...
[20] ... the second aspect of the principle identified in Norton, A Treatise on Deeds (2nd ed., Sweet & Maxwell, 1928) seems to me to be conclusive. It is clear that a party who purports to take the benefit under a deed will be bound by the terms of that deed even if they have not executed it. That is but an example of the general rule of law which does not permit a party to approbate and reprobate the same transaction. A party cannot have the benefit of a deed while at the same time disavowing its obligations under the same deed.
...
[22] This is a classic example of the working of that general principle in action. Camiveo has paid the money, the vendor accepts that it has divested itself of all of its interests in the property, Camiveo has not executed the deed of assurance but has acted as owner by attempting to collect rents. Camiveo has, therefore, clearly and beyond any dispute, acted in a manner consistent only with it taking the benefit of the deed and is, therefore, in accordance with the principle identified in Norton, A Treatise on Deeds (2nd ed., Sweet & Maxwell, 1928) at p. 26, "bound by it though he does not execute it"."
79. Clarke J concluded that the trial judge (Hogan J.) "was completely correct to take the view that there was no merit whatsoever in the execution point and to refuse leave to defend on that basis" (Ά24). This authority is unequivocal and is directly relevant here.
80. In reply, counsel for the Halpin Defendants did not abandon the objection based on the non-execution of the transfer deed, while advancing no substantive response to Stairway's submissions. A different approach could - and I think should - have been taken, given the clarity of the judgment of the Supreme Court in Camiveo. However, as the objection has been maintained, I determine the issue succinctly and without hesitation by noting, as Clarke J. did in Camiveo, that there is no merit whatsoever to it.
81. I also reject the asserted culpable non-disclosure of the fact that the deed of transfer was not executed. I do not share the view of the Halpin Defendants as to the significance of the application for short service of the injunction application or its effect. On this particular point, I do not accept that there was material non-disclosure; or that any culpability attaches to Stairway. I have been given no basis to understand the outcome of that application would have been different depending on whether the Court was informed that the deed was not executed by Stairway, particularly given the clarity of the law as expounded in Camiveo. This allegation of a breach of the obligation of good faith was unwarranted.
82. Fifth, counsel for the Halpin Defendants made a point about the Property having been determined to be subject to a residential rate of stamp duty and linked this with the asserted deficiencies in the demonstration of the power of sale. The stamp duty adjudication appears to be relied upon as evidence that the Property is occupied as a home by Mr Halpin and Ms Keane and it also seems to be contended that the applicable stamp duty gave rise to, or heightened, an obligation on Everyday or Stairway to have regard to the interests of the individual occupants of the Property.
83. I do not see any merit to these points. It is not disputed that Mr Halpin and Ms Keane do in fact reside at the Property (albeit the position of Stairway and Everyday is that they do so as trespassers). It is equally not in dispute that a commercial business is operated from the Property. The proportion of the Property or its value which is attributable to each use has not featured as an issue I have to decide in these Proceedings. How the Property is treated for stamp duty purposes is irrelevant to the rights of ownership and possession, which are the issues properly before me. These points are not well made and are rejected.
84. A final, general, point made on behalf of the Halpin Defendants was that there were trusts and beneficial interests and the relevant documents to show the transfer of that title was not before the Court. There were two categories of objections made in this respect. First, there are specific questions raised about Stairway's title to the Property and the beneficial interest of Mr Ryan in the context of the Possession Proceedings. These questions concern Stairway's application for possession, not Everyday's power of sale. As such, those matters will be addressed under the discrete heading of the Possession Proceedings later in this Judgment.
85. The second objection concerns the fact that the beneficial ownership of the Property was vested in an entity known as "LCM Partners" ("LCM") rather than in Everyday; the absence of any documentation or evidence in this respect; and the asserted non-disclosure of this fact.
86. Counsel for the Halpin Defendants raised the question of whether the legal title owner has the power to invoke section 19 and sell a property in reliance on that provision.
87. In reply, counsel for Stairway opened section 20 of the Act of 2009 which confers on trustees of land the full power to sell same:
"(1) Subject to
(a) the duties of a trustee, and
(b) any restrictions imposed by any statutory provision (including this Act) or the general law of trusts or by any instrument or court order relating to the land,
a trustee of land has the full power of an owner to convey or otherwise deal with it.
(2) The power of a trustee under subsection (1) includes the power to
(a) permit a beneficiary to occupy or otherwise use the land on such terms as the trustee thinks fit,
(b) sell the land and to re-invest the proceeds, in whole or in part, in the purchase of land, whether or not situated in the State, for such occupation or use."
87. He also opened Wylie & Woods on Title (page 400, paragraph 6.65):
"The general rule is that equitable interests should be kept off the title, those interests which will not affect a bona fide purchaser for value of the legal estate without notice of the equities of equitable interests. Thus, where property is held by trustees on trust for beneficiaries, it is the former who have the legal title and with whom a purchaser is primarily concerned on a sale of the trust property."
88. I agree with Stairway and do not consider the fact that the beneficial interest in the Property was held by an entity other than Everyday to be relevant to the proof of the transfer of title to or from Everyday, or to the right of Everyday to exercise the power of sale. This right is provided for in section 20 of the Act of 2009. There is no basis to impugn the power of Everyday to exercise that power of sale and no such legal basis had been suggested by the Halpin Defendants.
89. Insofar as an allegation of a failure to disclose the existence of that beneficial interest is concerned, the judgment of Binchy J. in Pepper Finance Corporation v. Jenkins [2018] IEHC 485 disfavours that argument (this case is considered further below in the context of the Possession Proceedings). I do not believe that the fact that LCM held the beneficial title to the Mortgages is relevant to the question of whether Everyday had the power to sell the Property to Stairway. That power clearly arose from the possession of legal title.
Conclusion on the Transfer of Title
90. Having reviewed the documents relied upon by Stairway in the Possession Proceedings and having considered the submissions of the parties and each of the defences raised by the Halpin Defendants in the pleadings and submissions, I am satisfied that the transfer of title to the Mortgages from IBRC to Everyday (via Kenmare and Pepper) has been demonstrated and that Stairway has discharged the burden that it bears in this respect as the moving party in the Possession Proceedings.
91. The various objections and defences raised by the Defendants (primarily during the hearing) do not, individually or cumulatively, warrant any finding other than that Stairway has discharged the onus of showing that legal title to the Mortgages passed to Everyday and that Everyday did have a power to sell the Property as of 19 May 2023. The next question is whether the second criterion to invoke section 19 was met, namely whether there was a valid notice seeking payment on foot of the Loans.
Demand for Payment
92. It was asserted by the Constitutional Plaintiffs that there was not a valid demand, as the demands relied upon were issued in 2012, 2015 and 2017, and did not disclose the amount of the debt now outstanding. A late objection was also raised that the earlier demands were not proved or admissible.
93. This ground of defence is again sharply at odds with the premise of the Constitutional Challenge.
The Position of the Defendants
94. The Halpin Defendants deny that "lawful demands" have been made (Ά15). It is also pleaded that, in light of the communications and payments between the Defendants and the mortgagees, Everyday is estopped from exercising a power of sale, and "all the more" so given that Everyday exercised this power without warning and in reliance on a demand that was issued in February 2012 (Defence Ά20).
95. At hearing, this point was significantly expanded into a specific objection that Everyday could not rely on a demand or demands that was issued between 2012 and 2017. It was questioned whether it was "appropriate" for them to do so (day 5, page 49).
The Position of Stairway
96. As the party that bears the onus on this point, Stairway pointed to the judgments in the Section 316 Proceedings and contends that they conclusively determine the validity of the demand issued in 2012.
97. By way of Replies to Particulars, Stairway pleads that it was implicit in the Possession Order and the determination in the Section 316 Proceedings that a lawful demand had been made and that the mortgages were enforceable, inter alia, by sale.
98. Stairway's counsel opened the judgment of the Court of Appeal in Re Lodge Gaven Limited [2023] IECA 308. Binchy J (Donnelly and Noonan JJ. concurring) there rejected an argument (by Everyday) that a company's name needed to be restored to the register of companies in order to ensure that a letter demanding repayment of a loan could be issued. While the Court upheld the decision of the High Court to order the restoration of the company on other grounds, it did not accept there was a necessity to issue a new demand, as there had already been a demand by a predecessor in title to the mortgagee:
"Firstly, it is clear from the terms of the mortgage debenture that AIB was entitled to appoint a receiver if at any time any of the principal monies secured thereby became payable. The mortgage debenture further provides that the principal monies would become immediately payable in the event that the Company should make default for one calendar month in the payment of any interest secured thereby, or, in the event of AIB serving a demand in writing upon the Company for payment of all or any part of the monies owing on foot of or secured by the mortgage debenture. Everyday did not dispute that such a demand was served by AIB, and it seems to me that notwithstanding the antiquity of that demand, Everyday could rely upon it for the purposes of exercising the power of appointment of receiver. Moreover, it is apparent that the Company must be in default of making repayments of interest, which in turn automatically triggers the obligation to repay the principal monies and the entitlement to appoint a receiver, without any demand. It cannot therefore be said that the restoration of the Company to the register is necessary just so that Everyday can appoint a receiver. That entitlement subsists as matters stand." (Ά33).
Assessment of the Validity of the Demand
99. For the power of sale conferred by section 19 to be exercised, there must be (a) a notice requiring payment of mortgage monies must have been served on the mortgagor and (b) there must have been default in the payment of the monies for three months from the date of that notice.
100. This provision does not prescribe who must issue the notice; how long may lapse following the notice before the power of sale may be exercised; or impose any additional limitations or requirements before the exercise of the power of sale.
101. The position here is that it is not in dispute (and could not be disputed) that the loans were repayable on demand.
102. Three different demands (of which I am aware) have been issued. In the judgment of Peart J. in the Section 316 Proceedings ([2013] IEHC 495) the Court refers to a letter of demand that was sent by IBRC to Elektron and Crossplan on 15 February 2012 ("the 2012 Demand"). The Court dismissed the objection made by Mr Halpin and Ms Keane that the 2012 Demand could not be relied upon to appoint the Receiver. This decision was upheld by the Supreme Court by judgment dated 11 May 2016.
103. Accordingly, the 2012 Demand has been conclusively found by the Supreme Court to have been valid and effective. Specifically, Laffoy J. (Dunne and Charleton JJ. concurring) found that, once the deadline of 4pm on 17 February 2012 had passed, "the power to enforce the security is exercisable" (Ά38). That judgment also refers to the uncontested evidence that Elektron was not in a position to satisfy the 2012 Demand.
104. While the Receiver was appointed on foot of the 2012 Demand, this does not alter the fact that the Loans became payable and enforceable as of 4pm on 17 February 2012, and they remain outstanding. The Receiver attempted to obtain possession of the Property, but this was thwarted by the refusal of the Halpin Defendants to deliver up possession, despite the Receiver Possession Order that was made by the High Court on 17 December 2013 having been upheld by the Supreme Court. There is and can be no dispute on these points.
105. While counsel for the Defendants disputes that a valid demand has been served, including because it is not "appropriate" for an antiquated demand to be relied upon, and because the amounts in the demand are different to the amounts now owing, no authority was opened in support of this proposition. I do not see how this is relevant to the statutory requirement in section 20(i), which requires only that a notice has been issued to the mortgagor requiring payment and that same has not been satisfied within a period of three months.
106. The Defendants' contention is also at odds with the judgment of the Court of Appeal in Re Lodge Gaven Limited, which clearly countenances a letter of demand by one lender being relied upon in enforcement proceedings by a successor in title to that lender.
107. I do note that the 2012 Demand allowed two days for payment, rather than the three months envisaged by section 20(i). However, section 20(i) does not prescribe the content of the notice and requires only that the loan not be discharged within three months of the notice. Here, it is common case that the Loans were not repaid within three months of 15 February 2012.
108. I am satisfied that a notice was issued by IBRC on 15 February 2012; that payment was not made within three months of that date; and that the requirements of section 20(i) of the Act of 1881 are satisfied.
109. Reference was also made - principally by counsel for the Defendants - to letters of demand issued by Kenmare to Mr Halpin in 2015 and again in 2017 (but otherwise undated) each requiring payment of the sum of 23,933,503.09. These letters of demand were included in the documents schedule appended to the Memorandum of Agreement between Everyday and Stairway of 11 September 2023 (as was the documentation from the Prior Litigation, including the Receiver Possession Proceedings which were premised on the 2012 Demand).
110. By way of replies to particulars in the Possession Proceedings, Stairway pleads that the relevant demand for the purpose of section 19 was the 2012 Demand and this is the demand assessed here.
111. It does not appear from its pleadings that Stairway is relying on the additional demands issued by Kenmare in 2015 and 2017 to evidence its title for the purpose of the Possession Proceedings, so I base my judgment on the 2012 Demand. I would however note that these additional demands are relevant in demonstrating that further notice was furnished to Mr Halpin that the powers of enforcement were continuing to be asserted and payment was continuing to be demanded, the transfer of the security from IBRC to Kenmare, and the payment of monthly sums of money notwithstanding.
112. I would also note that, while this point was raised only in passing during the hearing, interest under the Loans is undoubtedly in arrears, and for a very substantial period of time. This would appear to suffice for the purposes of section 20(ii) (although, again, this was not the basis of Stairway's pleaded case and I do not base my decision on this point).
113. On the basis of these findings, I am satisfied that Everyday did have good title to the Property from 19 May 2023; that a valid demand was issued for the purpose of section 20(i); and that the statutory criteria for exercising the power of sale in section 19 were met.
114. Accordingly, Everyday did have the right to, and did validly, invoke section 19. The Constitutional Challenge to that provision is therefore a live issue.
Constitutional Challenge
Scope of the Challenge
115. There are several preliminary objections to the Constitutional Challenge. Before assessing these objections it is necessary to set out the contours of the pleaded case.
116. There are three broad categories of claim pleaded. First, there are a series of pleas challenging the constitutionality of section 19 of the Act of 1881 (this will be referred to in this Judgment as "the Constitutional Challenge"). It is specifically pleaded that the power of sale conferred by that provision is itself unlawful and repugnant to Articles 40.3.2, 40.5, 41.2, 42A and 43 of the Constitution, and is also unlawful insofar as it applies to a family home. This allegation is made on the ground that section 19 provides the security holder with an uncontrolled means of liquidating the family home without order or supervision of the Court and without warning and does not require an offer first be made to the family to purchase the family home. It is also claimed to be incompatible with the European Convention on Human Rights ("ECHR") and, in particular, Articles 6, 8, 13 and Protocol 1 thereof.
117. Second, there is a challenge to the constitutionality of a contractual power of sale ("the Contractual Constitutional Claim"). It is pleaded that, to the extent that reliance is placed on any power of sale contained in the underlying mortgage documentation, that power is unlawful and contrary to the provisions of the constitution insofar as it applies to a family home, on the grounds that Mr Halpin and Ms Keane were not party to the Loans; such an agreement would confer a right to sell the family home without warning, Court order, or first opportunity to the family to purchase it.
118. A third set of claims advanced in the Constitutional Challenge is that Mr Halpin and Ms Keane had a licence, life estate or other right of residence in the Property ("the Licence Claim"). It is pleaded that they acquired this interest and, in reliance on it, invested monies and paid outgoings (rates, insurance, taxation) in respect of the Property. It is pleaded that Stairway is estopped from revoking that alleged licence and that it would be inequitable for Stairway to be permitted to do so. It is said that Mr Halpin and Ms Keane could have matched the purchase price.
119. There are additional claims, such as that Everyday failed "in its duty to" Mr Halpin, Ms Keane and Elektron by not notifying them of the sale, not acting reasonably, and not offering the Property to the family to purchase. These claims overlap with elements of the counterclaim to the Possession Proceedings and they will be addressed together in the final section of this Judgment.
120. In this section, only the Constitutional Challenge is considered (the Contractual Constitutional Challenge falters at the first fence of preliminary objections as will be seen shortly).
121. The Licence Claim is quite distinct from the Constitutional Challenge and is addressed under a separate heading in this Judgment.
Preliminary objections
Everyday
122. By its Defence, Everyday pleads that the Constitutional Challenge is an abuse of process and precluded by Henderson v. Henderson (1843) 3 Hare 100. It is specifically asserted that the Plaintiffs could have raised the issues sought to be ventilated now in the Section 316 Proceedings and/or in the Receiver Possession Proceedings. It is also objected that the constitutional protections of a family home cannot be asserted given that the equity of redemption was owned by Elektron and that there is no reasonable cause of action on this basis.
Stairway
123. Stairway makes the preliminary objection that the Constitutional Challenge is an abuse of process and should be struck out. This mirrors the preliminary objection of Everyday.
124. Stairway also make the preliminary objection that the claim is frivolous and vexatious and/or bound to fail. The basis for this objection is that Mr Halpin and Ms Keane have no interest in the Property, no right to occupy the Property, and no standing to make the claims sought to be advanced. It is also asserted that Elektron cannot rely on protections afforded to the family home and that the Plaintiffs are estopped from invoking equity, given the failure to comply with the Receiver Possession Order.
The State Defence
125. The State by its Defence makes four preliminary objections:
126. First, it is pleaded that, in the Prior Litigation, several admissions and determinations were made to the effect that Mr Halpin and Ms Keane do not own the Property and that none of the Plaintiffs have a right to possession of the Property and that the Plaintiffs consequently lack locus standi to bring the Constitutional Challenge particularly as it is based on the Property being a "family home". It is also pleaded that the Plaintiffs' claim infringes the principle of jus tertii, as the rights of a hypothetical third party are being invoked and championed. Estoppel is also asserted, based on the existence of the Receiver Possession Order.
127. Second, it is asserted that the orders sought (which would implicitly require the imposition of new restrictions) would amount to an impermissible form of judicial legislation and would contravene Article 15.2.1 and are bound to fail.
128. Third, it is pleaded that the claims are barred by the doctrine of estoppel and/or Henderson v. Henderson and/or are an abuse of process.
129. The fourth preliminary objection of the State is that the claim for damages pursuant to the European Convention on Human Rights is statute-barred and cannot confer a claim for damages related to legislation enacted in 1881.
Reply by the Constitutional Plaintiffs
130. Among the points pleaded in that Reply was that the impugned provisions of the Act of 1881 could not have been challenged in the Prior Litigation, as the power of sale was not invoked or at issue until 2023.
131. It is asserted that a challenge to the constitutionality of section 19 in the Prior Litigation would have involved making hypothetical arguments and, in addition, Everyday was not the owner of the security when the Section 316 Proceedings or the Receiver Possession Proceedings were commenced.
132.The preliminary objections will be addressed as follows:
a. Henderson v. Henderson
b. Locus Standi
c. Futility
d. Frivolous and vexatious
e. Estoppel
Henderson v. Henderson: Constitutional Challenge
133. The first point to consider is the contention by the Plaintiffs that Henderson v. Henderson cannot be invoked, as Everyday was not a party to the Prior Litigation. Everyday relies on Munnelly v. Hassett [2023] IESC 29 in which O'Donnell C.J. confirmed that persons who were not party to the earlier proceedings, can nonetheless invoke the rule in Henderson v. Henderson.
134. In Munnelly v. Hassett, it is recognised that "the principle is not limited to the protection of parties but is also rooted in the need to protect the Court process" (para 44). O'Donnell C.J. referred to the judgment of Finlay Geoghegan J. in Vico Limited v. Bank of Ireland [2016] IECA 273, in which the test applied was whether the parties to the earlier proceedings were sufficiently identified with the parties now asserting an abuse of process. Having considered that judgment, O'Donnell C.J. concluded,
"Applying the test of 'privity of interest' or 'sufficient degree of identity' and even a more demanding standard of 'alter ego', it seems to me that this is a classic case where a party to current proceedings is entitled to rely on the fact that a claim could have been brought in earlier proceedings, even if the moving party was not a party to the earlier set of proceedings." (para 50)
135. In Munnelly itself, the Court found that there was "an unusual degree of identity" as the conduct of the defendant was alleged to be the conduct of the company in the previous litigation and this was found to be "more than sufficient to render it just" that she would be entitled to rely on the existence of the earlier proceedings to invoke the rule in Henderson v. Henderson.
136. The judgment in Munnelly is undoubtedly important here. The point emphasised by the Defendants is the recognition that there is no absolute requirement that the parties invoking Henderson v. Henderson were parties to the previous litigation. This cannot be contested as a legal proposition.
137. However, there are several notes of caution in the judgment of O'Donnell C.J., including the observation that "it is also logical that a court will scrutinise more carefully a claim to dismiss proceedings if brought by a party who has never been involved in the earlier proceedings..." (Ά45). O'Donnell C.J. also emphasised the "flexibility of the rule" referring to the fact that it "involved the dismissal in advance of a hearing of a claim that has never previously been advanced, heard or adjudicated upon." (Ά51). Notably, he then states,
"These considerations apply perhaps with greater force where the claim is one against a party who has never previously been sued by the plaintiff. It is also the case as observed by Hardiman J. in AA v. the Medical Council that the principle may have to be applied even more flexibly in the field of public law where broader considerations may apply." (Ά51)
138. On the basis of Munnelly, it is necessary to scrutinise carefully both the assertion that the claims in the Constitutional Challenge could - and, separately, should - have been raised in the Prior Litigation and the claim that the Defendants to the Constitutional Challenge are entitled to invoke Henderson v. Henderson against the Constitutional Plaintiffs (not having been parties to the Prior Litigation). Even if those criteria are met, it falls to the Court to consider whether the second proceedings should be dismissed, given the issues at stake have not been determined on their merits. As emphasised in Munnelly, the Court has "a degree of latitude in that regard" and may well decide not to dismiss proceedings despite a finding that Henderson v Henderson is applicable (para 51). Particular latitude may be warranted when a question of public law arises.
139. Applying that guidance here, I consider that, in line with Munnelly, there is a sufficient nexus and identity of interests between the Receiver/IBRC and Everyday/Stairway to engage Henderson v. Henderson, given the chain of title as between them. Indeed, the High Court has already determined in the Dismissed Proceedings that there is sufficient identity between IBRC and Kenmare to engage the rule in Henderson v. Henderson ([2016] IEHC 438 Ά22, as upheld by the Court of Appeal at [2018] IECA 131). The same analysis must be squarely applicable here.
140. Applying Henderson v. Henderson to the Constitutional Challenge, it does seem very difficult to envisage how a challenge to the constitutionality of section 19 could have been included in earlier proceedings whether by way of counterclaim to the proceedings brought by the Receiver (who was appointed pursuant to a contractual agreement between the parties and not pursuant to section 19) or in the proceedings challenging the appointment of the Receiver or otherwise.
141. At that time, the question was possession by the Receiver on foot of provisions of the Mortgages, which included a contractual power of sale. There was no suggestion of section 19 being invoked. The first test for the application of Henderson v. Henderson - whether the issue opposed could have been raised in the earlier proceedings (see Munnelly Ά21) - does not therefore appear to me to be met. I find the submission of counsel for the Constitutional Plaintiffs, that the constitutional challenge would have been challenged as a request for an advisory opinion on hypothetical facts if sought to be raised in the Prior Litigation, to be persuasive in this respect.
142. There is some reliance (particularly by Stairway) on a more nebulous abuse of process ground to dismiss the Constitutional Challenge. Stairway, in its written submissions, refers to Oman v. Oman [2019] IECA 269, among other authorities, to support this objection. Some of the statements of the Court of Appeal in that case do undoubtedly resonate with the facts before me and there are similarities in terms of the litany of litigation seeking to avoid the consequences of possession orders. However, there is an important point of contrast, which is that the Court in Oman rejected the credibility and stateability of the new challenges sought to be made, and the justifications for not bringing them in the previous possession proceedings. The same findings simply cannot be made here, primarily because, as already found, it is very difficult to conceive of the Section 19 Claim in the Constitutional Challenge having been brought forward in the Prior Proceedings.
143. The rule in Henderson v. Henderson does not preclude the pursuit of the Constitutional Challenge. Indeed, counsel for the State acknowledged the merit of the Constitutional Plaintiffs' position in this specific respect.
Henderson v. Henderson: Contractual Constitutional Claim
144. The second claim is the Contractual Constitutional Claim. The first point that must be noted is that Everyday did not deploy a contractual power of sale and this is an impermissible request for an advisory opinion on a question of constitutional law.
145. A further flaw is that the contractual powers of the mortgagees and the powers of the Receiver (which evidently included the power of sale) were clearly and directly at issue in the Section 316 and the Receiver Possession Proceedings.
146. It is also said that constitutional claims were part of the Discontinued Proceedings and that the decision to issue and then abandon those proceedings and now to revive arguments that could have been progressed then is characteristic of the type of abuse and attempted re-litigation which should not be permitted. I agree.
147. If the Constitutional Plaintiffs wished to pursue a constitutional challenge to any contractual provisions or the powers they conferred on the mortgagees, or advance some challenge to the powers conferred by the Mortgage contracts, they could have done so in the Receiver Possession Proceedings or the Section 316 Proceedings (or indeed in the Discontinued Proceedings). At that time, the contractual power of sale (by the receiver) was at issue and it would have been the correct time to agitate any challenge to that power.
148. Having chosen not to advance such claims then, the rule in Henderson v. Henderson applies and prevents any attempt to litigate these questions now. While there is of course room for flexibility in the application of that rule, I do not regard this case as one in which there should be any latitude, given the long history of litigation to date and the fact that this is not the first time that some of the same parties have been found to have engaged in an abuse of process of this nature. This aspect of the Constitutional Challenge is accordingly struck out.
Separate Henderson v. Henderson challenge
149. There is another, quite distinct, Henderson v. Henderson objection raised by Everyday. This is the objection that the challenge to the power of sale in the Possession Proceedings could and should have been included in the Constitutional Challenge.
150. In response to this, it is said on behalf of the Constitutional Plaintiffs that there could have been a consolidated action raising all of these issues but that it is not material that this was not done.
151. I do not consider this objection to be well-founded in the circumstances of these Proceedings. The primary reason is that the rationale of the rule in Henderson v. Henderson is to prevent parties (and the Court system) facing successive proceedings and claims which could and should all have been brought forward in one legal proceeding together, and to prevent the finality of legal proceedings being undermined and prejudice being suffered by litigants and the administration of justice. This rationale is not strictly engaged by Everyday's objection, as the two Proceedings were case managed and heard together, so the risks of successive proceeding and hearings, of jeopardy to the finality of proceedings; or of prejudice to parties and the administration of justice do not arise.
152. There is also an important question of timing here: the Possession Proceedings were issued just five weeks after the Constitutional Challenge and the pleadings in the latter had only closed a matter of weeks before the defence and counterclaim to the Possession Proceedings was delivered. This complicates any assessment as to what could or should have been included in the Constitutional Challenge: the cases were then progressing and being managed together and it would be quite a technical and rigid approach to say that the challenges raised in the Possession Proceedings cannot now be maintained as they should have been pleaded in the Constitutional Challenge. For this reason, I cannot find that the challenges alleged to be abusive "should" have been pleaded in the Constitutional Challenge, given they were soon thereafter pleaded in the related Possession Proceedings and the two progressed together, and the rule in Henderson v. Henderson does not properly apply.
153. Even if the criteria for the application of Henderson v. Henderson are met (and I do not consider that they are), the next step would be to decide whether and how to apply that rule, adopting the necessary flexibility of approach. O'Donnell C.J. in Munnelly observes "the modern restatements of the application of the rule in Henderson v. Henderson have all emphasised the flexibility of the rule and counsel against either a mechanical or overly rigid application of the rule" (para 51)). Given the proximity in time between the two Proceedings and the fact that they were managed and heard together, I consider that the application of the rule in Henderson v. Henderson as between them would involve an element of rigorous technicality and I do not consider that to be appropriate in the specific circumstances of this case.
Locus Standi
154. The locus standi of the Constitutional Plaintiffs to attack the constitutionality of section 19 was challenged by Everyday and Stairway.
155. The position advanced by Everyday is that there is a contractual power of sale under the Mortgages (via the appointment of a receiver) and that the Property is liable to be sold by that mechanism or by the exercise of the inherent power of sale of the mortgagee, even if section 19 was not availed of. It is said that the invalidation of section 19 would not therefore avail the Constitutional Plaintiffs and that they lack standing to challenge the provision for that reason. The proposition is that the interests of the Constitutional Plaintiffs are not affected by the alleged unconstitutionality, as the same result (ie the sale of the Property) could be arrived at by another means.
156. Everyday rely on Grace v. Ireland [2007] IEHC 90, [2007] 2 ILRM 283 for this proposition, particularly the following passage from the judgment of Laffoy J.:
"In applying the primary rule as to locus standi, as enunciated by Henchy J. in Cahill v. Sutton, to this case the question which arises is whether the plaintiff can assert that his interest has been adversely affected by the requirement in s. 85(4) that provision be made for the expenses, fees and costs during the bankruptcy, as well as preferential payments, before his entitlement to a discharge arises on the basis that the bankruptcy has subsisted for twelve years. It seems to me that the answer to that question depends upon whether he has established that, if that requirement were excised, he would be entitled to a discharge. While the plaintiff's bankruptcy has subsisted for in excess of twelve years, there are other conditions to be complied with before an entitlement to a discharge would arise. I have already adverted to the fact that one condition, the precondition that the plaintiff's estate has been fully realised, is of relevance in the context of mootness. I consider that, irrespective of the views of the parties that the conduct of the Official Assignee in prosecuting the proceedings to set aside the transfer by the plaintiff of his house and farm to Mrs. Grace and his daughter is irrelevant, the pendency of those proceedings is of relevance to the issue of the plaintiff's locus standi, because their mere existence, prima facie, excludes the conclusion that the plaintiff's estate has been fully realised. The plaintiff, on whom the burden of showing that he has standing rests, has not discharged the onus of establishing that a precondition to his entitlement to a discharge has arisen. Therefore, to adopt the words of Henchy J. in Cahill v. Sutton, his case 'has the insubstantiality of a pure hypothesis'."
157. The issue in that case was that the plaintiff wished to challenge the constitutionality of section 85(4) of the Bankruptcy Act 1988, which provided that a bankrupt person whose estate has been fully realised can be discharged when provision has been made for the costs and expenses of the bankruptcy. The plaintiff's estate was not yet fully realised and Laffoy J. found that, as that criterion to invoke section 85(4) was not satisfied, the plaintiff was not impacted by the operation of the provision and lacked the requisite standing to challenge its constitutionality. The Court also found that the plaintiff could have sought his discharge from bankruptcy by another means which would not require reliance on section 85(4).
158. The situation here is markedly different. Section 19 has in fact been invoked by Everyday as a basis for selling the Property and it is this action which gives rise to the Constitutional Challenge. It is not a situation in which the Defendants to the Constitutional Challenge deny that section 19 was applicable or invoked. The opposite is the case. Furthermore, there can be no question of the Constitutional Plaintiffs electing a different mechanism for the sale of the Property: the sale has already taken place and the Plaintiffs have and had no choice with regard to the invocation of section 19.
159. The point made by Everyday (that, if section 19 is struck down, then Everyday could seek to sell the Property pursuant to the Mortgages and the Plaintiffs would not then be affected by section 19) may be correct, but that does not mean that the Constitutional Plaintiffs are not currently affected by the operation of section 19 (if they otherwise have standing) or that they would not benefit from a finding that that provision is invalid and could not be invoked by Everyday. I consider that a finding that the Constitutional Plaintiffs lack standing on this basis would extend the decision in Grace v. Ireland beyond its proper parameters. It would also have the effect of immunising section 19 from challenge in any case in which there is a contractual power of sale, as the mortgagee / seller could invoke section 19 and then point to the existence of that parallel contractual power to protect that provision from scrutiny. I do not consider that to be a sound basis on which to prevent the Constitutional Challenge from proceeding.
160. Stairway advances a fundamentally different objection as to standing. What is said by Stairway is that Mr Halpin and Ms Keane have no proprietary right or interest in the Property; are not parties to the Mortgages; and lack standing for these reasons to challenge the validity of the sale and the constitutionality of section 19. It is also said that Elektron, the owner of the Property and party to the Mortgages, cannot invoke the constitutional guarantees afforded to individuals or families by the Constitution.
161. The starting point must be to assess whether the interests of the Plaintiffs are, or are in danger of being, "adversely affected" by the operation of section 19, within the meaning of Cahill v. Sutton [1980] IR 269.
162. I do not consider that it is correct to find as a preliminary matter that none of the Constitutional Plaintiffs have standing to challenge section 19. Leaving to one side any consideration of the merits of the Challenge, it is difficult to see how it could be determined that the Constitutional Plaintiffs are not adversely affected by the operation of section 19. It is the provision which Everyday relied on to sell the Property, which then in turn paved the way for Stairway to seek possession, and led to the notice of eviction being issued to Mr Halpin and Ms Keane.
163. Indeed, it is notable that the State acknowledged in oral submissions - helpfully and correctly in my view - that it is difficult to say the Constitutional Plaintiffs do not have standing to challenge the statutory provision relied upon to sell the Property.
164. There is a related, but distinct, question about the scope of the constitutional challenge that can be brought by the Constitutional Plaintiffs. This was the point that the State emphasised and involved more focus on the doctrine of jus tertii rather than the requirement of locus standi. Reliance is placed on the judgment of O'Donnell J. (as he then was) in Mohan v. Ireland [2019] IESC 18, [2021] 1 IR 293 and on the judgment of Donnelly J. in McCann v. A [2015] IEHC 366.
165. The following passage from Mohan v. Ireland was opened to me:
"[10] Locus standi is often invoked in the case law, but as the authors of Hogan, White, Kenny and Walsh, Kelly: The Irish Constitution (5th ed., Bloomsbury Professional, 2018) have observed, it is neither precisely nor fully developed. It is often encountered alongside the rule against jus tertii, i.e., the rule against advancing claims based on the rights of others to which locus standi is closely related. They are, however, conceptually distinct. Cahill v. Sutton[1980] I.R. 269, which remains the most developed discussion of locus standi in Irish law, neatly illustrates the distinction, since it is, itself, a case decided on the jus tertii rule. The interest of the plaintiff, Mrs. Cahill, in advancing litigation to recover compensation for personal injuries, was undoubtedly adversely affected by the operation of the Statute of Limitations 1957 ("the 1957 Act"), since her claim was barred by the terms of the statute. Accordingly, she certainly had locus standi to challenge the Act. However, what she could not do was advance arguments on a hypothetical basis which did not arise from the facts of her case. In particular, she could not advance arguments as to the possibility of the unfairness of an absolute time bar contained in the 1957 Act for a claimant who might not know of the possibility of a cause of action before the expiry of the limitation period, in circumstances where, in her case, she was admittedly aware of the possibility of a claim at all stages after the accident. Thus, she was prevented by the jus tertii rule from asserting such arguments in her case, and since that was the only basis upon which she argued the statute was repugnant to the Constitution, her claim failed."
166. I think the approach of the State on this point is correct and it is the one I propose to adopt. It ensures that the case each Plaintiff can make is limited and defined by the nature of their interest in the Property and the applicable facts. It is crucially important to distinguish between the position and claims of each Plaintiff.
Locus Standi: Position of Mr Halpin and Ms Keane
167.The constitutional rights that may be asserted by Mr Halpin and Ms Keane can only relate to the occupation of the Property that is owned by a separate person. They cannot invoke rights based on ownership (neither of them having any ownership interest in the Property).
168. As will be apparent when the substance of the Constitutional Challenge is addressed, what this means is that Mr Halpin and Ms Keane (and their children) can in principle rely on Article 40.5 and Article 8, as it is accepted by all parties that they reside at the Property as a family (and it is for that reason that they have not been refused locus standi). However, they cannot rely on those provisions to protect the ownership interests of a different person who has no right to such protection. That would run directly contrary to the doctrine of jus tertii.
169. The only case Mr Halpin and Ms Keane can make under Article 40.5 or Article 8 is one based on their residence at the Property.
Locus Standi: Position of Elektron
170. The fact that Elektron, the former owner of the Property, is a limited liability company which does not occupy or trade from the Property is highly material to the nature of the constitutional challenge that can be mounted on its behalf. It is self-evident that Elektron cannot assert a right based on residence, occupation, or personal or family rights.
171. This separation between ownership and occupation is owing to a conscious and deliberate decision by Mr Halpin that the Property would be acquired and owned by a limited liability company, with all of the attendant advantages of that corporate structure. This was addressed in Mr Halpin's evidence when he discussed the acquisition of Aberdeen Lodge:
"A. It was bought in a company name, but -- it was bought in a company name, a company that I had set up for another completely different reason to do with my work abroad, which was never utilised for that. But that company was there, it was just utilised to buy the property. In those days, it was thought that - the advice was that if you intend doing any kind of business at all, you shouldn't do it through your own name, you should do it through a -- you know, there should be a company. But it was a family company. There was nothing, you know, there was nothing formal about this.
Q. And what did you understand that advice to mean? Why should you do it through a company?
A. Because, I suppose, one thing about it, it would be better from a point of view of doing any business through there because there would be some, I suppose, some more protection through a company." (day 2, page 6)
172. Having made that choice and maintained and benefitted from that structure since 1987, Mr Halpin (or the other Constitutional Plaintiffs to the extent applicable) cannot seek to avoid its implications. The Property was at all times solely owned by a limited liability company, Elektron, and was never owned by Mr Halpin or Ms Keane.
173. While the State acknowledged at the hearing that a company may in certain circumstances be permitted to invoke Article 8 (citing Sociιtι Colas Est v France, Application No. 37971/97, (2004) 39 EHRR 17), this is premised on the property in question being a place of business or registered office. Elektron falls squarely outside its scope, as it does not occupy the Property as a business, a registered office, a branch, place of incorporation or otherwise.
174. The position is even more challenging for Elektron under Article 40.5 which was interpreted in DPP v. O'Brien [2012] IECCA 68 at Ά17 as being allied with other constitutional guarantees afforded to the individual. Elektron simply cannot assert any entitlement to rely on Article 40.5, being a limited liability company which does not occupy the Property.
175. The decision that Elektron would own but not occupy the Property was a choice made by Mr Halpin, and the separate personality and status of limited liability companies cannot be deployed and abandoned at will. Elektron cannot seek to make a case under Article 8 or Article 40.5 based on its own interests or the interests of any other person.
Futility Objection
176. The State Defendants and Stairway contend that the terms of the Act of 1881 are incorporated into the Mortgage Deed and that, regardless of whether it is found to be unconstitutional, the same powers arise under that contract. The following observation by Dunne J in McEnery v. Sheahan [2019] IESC 64 (Ά18) was emphasised:
"if the Oireachtas intended that the powers conferred by the Act of 1881 were no longer to be incorporated as part of the terms of the mortgage deed as a result of the repeal of the Act of 1881, one would have expected that such intention would have been clearly expressed in the Act of 2009."
177. The judgment of Dunne J. addressed the question of whether the provisions of the Act of 1881 (as incorporated into a mortgage deed) could confer a power of sale that was exercisable during the period between the repeal of sections 15 to 24 of the Act of 1881 and their re-introduction by the Act of 2013. The Court of Appeal found that the power subsisted by virtue of the contractual provisions agreed by the parties; that the Act of 1881 had created an implied contractual right; and that the repeal of the provisions of the Act of 1881 did not alter this bargain between the parties.
178. The point made by Stairway and the State Defendants is that the invalidation of section 19 would not alter the outcome or affect the interests of the Constitutional Plaintiffs: the power would exist as an implied term of the contract and the Court would have to strike down the incorporation of the power of sale (via the provisions of the Act of 1881) into the contract as well as striking down section 19 itself to achieve the end sought by the Plaintiffs.
179. This gives rise to yet another tangle in the web of these Proceedings: I have already found that there can be no challenge to the constitutionality of the express contractual power of sale in the Mortgages, as that attack is not a live one and it is moreover barred by the rule in Henderson v. Henderson, as it could and should have been included in the Prior Litigation (when it was a live issue).
180. Insofar as the question of the contractual incorporation of the Act of 1881 is concerned, the Plaintiffs do plead a general challenge to "any power of sale contained in the mortgage documentation", but there is nothing by way of pleadings, particulars or submissions to suggest that this includes a challenge to the provisions of the Act of 1881 as incorporated into that contract. Further, any such challenge would stumble on the same hurdles that blocked the attempted challenge to the express contractual power.
181. Assuming any "implied" contractual power of sale (via the incorporation of the Act of 1881) is not challenged, the question that appears to be posed by Stairway and the State Defendants is whether it is futile for the Plaintiffs' challenge to the constitutionality of section 19 alone to proceed, in circumstances where that same power would survive was an implied term of the contract.
182. This resembles the locus standi objection raised by Everyday and, for the same reasons that objection failed, so too must this point made by its co-defendants. In brief: the issue before the Court is the constitutionality of section 19, which was the provision invoked by Everyday to sell the Property. The fact that alternative mechanisms may have been available to Everyday to sell the Property does not answer the fact that section 19 was invoked and this is what is sought to be challenged. The possibility that Everyday could have availed of other mechanisms towards the same end does not answer the case that is made.
183. Insofar as Stairway contends that, if section 19 is invalidated, this would not necessarily preclude reliance on that provision as incorporated into the contract in the future, that is a question that may well require deeper analysis if and when a concrete set of facts so warrants. This was not the question addressed in McEnery v. Sheahan and it is not a live question on the facts before me. I am certainly not satisfied to proceed on an assumption that, if section 19 was declared to be invalid, it could nonetheless be deployed on the basis of the contract between the parties. The authority relied upon, McEnery v. Sheahan, does not go that far and I do not propose to either.
184. While I do not find this preliminary objection to be well-founded, it is important to note that, according to sections 19(2) and 19(3) respectively, the power of sale conferred by section 19(1) "may be varied or extended by the mortgage deed" and that section 19 "applies only if and as far as a contrary intention is not expressed in the mortgage deed, and shall have effect subject to the terms of the mortgage deed and to the provisions therein contained." The power of sale conferred by section 19 is therefore a power which contracting parties are free to vary, extend or disapply.
Frivolous and vexatious objection
185. The third issue in the Agreed Issues List was whether these proceedings are frivolous, vexatious and/or bound to fail, arising out of the fact that the Court does not have power to write into legislation the limitations on the statutory power of sale advocated for by the Plaintiffs.
186. It is of course the case that this Court cannot and would not attempt to legislate, but the Court can determine a provision of legislation to be unconstitutional, and one possible ground for doing so would be a failure to provide for certain procedural protections. That is theoretically possible and permissible and I do not believe it provides a reason to strike out the Proceedings. The reliefs sought include a declaration that the conveyance of the Property was unlawful and a prayer for damages. If section 19 is simply found and declared to be invalid, such reliefs could conceivably be pursued by the Constitutional Plaintiffs.
187. One ground on which the State Defendants advance this objection is that the impugned legislation was introduced in 1881 and that that tests and standards sought to be imposed were then unknown to the law. I do not consider this to be persuasive, particularly given the emphasis placed by the Defendants on the re-enactment of sections 15 to 24 in 2013 (and the consequent enjoyment of the presumption of constitutionality). There is a contradiction between relying on the original provenance of the Act to defeat the claims, while also relying on its more recent revival to benefit from the presumption of constitutionality.
188. I do not believe that judicial law-making is the only (or a) possible outcome of these Proceedings, if successful, and I find this objection to be unmeritorious. Mindful of the high bar that must be satisfied before I could decide to strike these Proceedings out as bound to fail, or for being frivolous or vexatious, I am not satisfied this threshold has been met and refuse to so decide.
Estoppel
189. The State contends that the Constitutional Plaintiffs are estopped from maintaining a claim based on the right to the protection of a Court order, having flagrantly disregarded the Possession Orders made by the High Court and upheld by the Supreme Court.
190. I can understand the logic of this position and it does seem incongruous for the Constitutional Plaintiffs to attach heavy weight to the asserted need for a court assessment and determination of their rights with regard to the Property, given their failure to honour the outcome of the Prior Litigation or comply with the Receiver Possession Orders.
191. However, to preliminarily bar a party from advancing a constitutional challenge would be a significant matter (particularly when it has been determined that the challenge is not otherwise barred by the doctrine of res judicata or the rule in Henderson v. Henderson). No authority was opened to me which suggests that a party can be prevented from advancing a constitutional challenge owing to an estoppel arising from prior litigation in such circumstances. I do not consider this point to be a valid one and, in any event, I do not believe that the history of these Proceedings does in fact give rise to an estoppel to preclude the arguments advanced in the Constitutional Challenge.
192. This does not mean that the prior non-compliance by the Constitutional Plaintiffs with Court orders is not relevant to these Proceedings, but rather that it falls to be weighed as an important part of the factual context of the claims and grounds advanced (particularly those involving considerations of equity and public policy).
Provisions of the Constitution and ECHR Relied Upon
193. The Constitutional Plaintiffs assert in the Plenary Summons that the power of sale conferred by section 19 is repugnant to Articles 40.3.2, 40.5, 41.2, 42A and 43 of the Constitution. It is also claimed to be incompatible with the ECHR and, in particular, Articles 6, 8, 13 and Protocol 1 thereof.
194. It was striking that, throughout the submissions made on behalf of the Constitutional Plaintiffs at the hearing of these Proceedings, relatively limited attention was paid to the Constitutional Challenge and the only provision of the Constitution that was referenced in written or oral submissions was Article 40.5 and only Article 8 of the ECHR was alluded to.
195. There was simply no attempt to address or explain how section 19 was asserted to be repugnant to Articles 40.3.2, 41.2, 42A or 43, or to Articles 6, 13 and Protocol 1 to the ECHR and no attempt to discharge any burden of proof with regard to those provisions. I do not therefore consider these provisions of the Constitution or the Convention further.
Presumption of constitutionality
196. There was a dispute about whether the impugned provisions of the Act of 1881 enjoy the presumption of constitutionality. The position of the Constitutional Plaintiffs in their written submissions was that, as the Act pre-dated the Constitution, it did benefit from that presumption. In closing oral submissions the merit of the contrary argument was acknowledged by counsel for the Constitutional Plaintiffs and it was then contended that this may not be material to the Constitutional Challenge.
197. I disagree, primarily because the presumption determines where the onus lies in the Constitutional Challenge.
198. Turning then to the question of whether the presumption does apply to the impugned provisions of the Act of 1881, sections 15 to 24 of the Act of 1881 were repealed by section 8(3) and Schedule 2, Part 4, of the Land and Conveyancing Law Reform Act 2009 ("the Act of 2009") with effect from 1 December 2009. The Land and Conveyancing Law Reform Act 2013 ("the Act of 2013") was then introduced, section 1 of which apples to a mortgage created before 1 December 2009 (which includes the Mortgages here) and provides that the statutory provisions that were repealed by section 8(3) and Schedule 2 of the Act of 2009 apply and may be invoked by any person as if not repealed.
199. The judgment of the Supreme Court in ESB v. Gormley [1985] IR 129 was relied upon by the Defendants to the Constitutional Challenge. There, Finlay C.J. considered the effect of the re-enactment of pre-1937 statutes and confirmed the established principle that,
"Where Acts passed since the coming into force of the Constitution expressly re-enact pre-Constitution statutes, this Court has decided on a number of occasions that such re-enactment gives to them the status of having been passed since the coming into force of the Constitution, thus applying the presumption to them."
200. Given that sections 15 to 24 of the Act of 1881 had been repealed and were then re-applied by the Act of 2013 to mortgages entered before 2009, I consider that the presumption of constitutionality does apply to sections 19 to 21 of the Act of 1881 and proceed on that basis.
Article 40.5
201. Article 40.5 provides, "The dwelling of every citizen is inviolable and shall not be forcibly entered save in accordance with law."
202. The following points about this provision are not and cannot be disputed.
1. First, Article 40.5 is not premised on ownership of property and can be invoked by a person who does not hold a title (legal or beneficial) to the property in question. The key question is residence at, or occupation of, a "dwelling".
2. Second, a person occupying a dwelling, even with a "dubious legal title" (DPP v. Lynch [2010] 1 IR 543, per Fennelly J.) can enjoy the protection of Article 40.5. Unlawful occupation does not in principle preclude the application of Article 40.5 (see Clare County Council v. McDonagh [2022] 1 IR 122 ("McDonagh") Ά72), although the protection afforded to trespassers "will be greatly diluted" (McDonagh, Ά83).
3. Third, Article 40.5 is not confined to the criminal sphere or to forcible entry, although "the focus of the guarantee is primarily on the 'entry and search' power of investigating authorities" (Murray Ά119).
4. Fourth, the cases in which Article 40.5 has been applied concern physical interference (or a threat of physical interference) with the occupation or enjoyment of a dwelling. These include:
a. proceedings for possession as in Irish life & Permanent v. Duff [2013] 4 IR 96; Shay Murtagh Limited v. Cooke [2022] IEHC 436;
b. proceedings concerning threatened demolition of a property for breach of planning legislation as in Wicklow County Council v. Fortune [2013] IEHC 255;
c. applications concerning search warrants to search a dwelling, which arose in Damache v. DPP [2012] IESC 11, [2012] 2 IR 266 ("Damache") and in DPP v. Lynch [2010] 1 IR 543.
Parties' Positions
203. It is not in dispute (nor could it be) that an order for possession is entirely distinct from an order for sale. The Constitutional Plaintiffs emphasise in written submissions that "a court order allowing, for example, possession is not one of sale. The powers are distinct and have separate statutory bases" (Ά39). They refer to passages from the judgment of Macken J. in Dellway Investments Limited v. NAMA [2011] 4 IR 1 including the following:
"In a standard mortgage or charge there is always an express power of sale, and in any event such a power is permitted by the provisions of applicable legislation which I do not have to cite in the context of this general exposι. There is, however, no automatic entitlement in a bank/mortgagee to possession of the mortgaged premises, in the event of a default, or even when a financial institution decides to call in loans and exercise its power of sale. Therefore, without more, a mortgagee/bank seeking to sell, has no power to grant possession to a purchaser when closing a sale" (per Macken J. at Ά509).
204. The Constitutional Plaintiffs conclude in this respect that, "the power of sale is a different power from the power to appoint a receiver or the power of possession" (written submissions Ά44).
205. The position of each of the Defendants is that section 19 does not present a risk to the inviolability of the dwelling, it is not concerned with eviction or other interference with the occupation of the Property, and that Article 40.5 is simply not engaged here.
206. It is emphasised by the Defendants that
(a) the Receiver Possession Order has already been made and upheld by the Supreme Court and the Constitutional Plaintiffs had every opportunity to make each and every argument they wished in relation to the inviolability of the dwelling, in the context of those possession proceedings; and
(b) the separate Possession Proceedings now being decided further ensure that there is a judicial oversight and that a court order will be made before the occupation of the dwelling can be interfered with.
Article 40.5: Discussion
207. This case is about a power of sale. The provision challenged, section 19, provides such a power, and is not concerned with possession or occupation.
208. While counsel for the Constitutional Plaintiffs concedes they are attempting to "move the dial" and that the case they make would involve an extension of Article 40.5, no case was identified in which Article 40.5 was applied (or even invoked) in a case remotely analogous to the present one, in which the issue is the sale of a property by a commercial mortgagee (not its possession, search, demolition or other interference with its occupation) on foot of a mortgage agreement voluntarily entered by the non-occupying corporate owner of that Property.
209. The reason is simple: section 19 provides a power to sell a property, which, as the Constitutional Plaintiffs themselves emphasise, is entirely distinct from an order for possession.
210. This distinction between the power to sell the encumbered asset and the right to possession of same is of central importance to the Constitutional Challenge. Section 19 empowers a sale of property but does not legislate for obtaining possession of the property or otherwise provide for interference with, or invasion of, a person's possession, occupation or enjoyment of a dwelling such as could engage the application of Article 40.5. The Constitutional Plaintiffs failed to advance any answer to this fundamental and insuperable difficulty and do not engage in a meaningful way with these points.
211. Even if there could hypothetically be a situation in which section 19 could be invoked so as to have the effect of interfering directly with the occupation of a dwelling, this is not that case and the doctrine of jus tertii precludes any attempt by the Plaintiffs to rely on such a hypothesis.
212. The caution expressed by the Supreme Court (McKechnie J. in Meath Council Council v. Murray [2018] 1 IR 189 ("Murray")) regarding a general expansion of Article 40.5 is squarely applicable here:
"It is not the fear of far reach that concerns me; rather it is, first, the creation of that potential from a base which I do not think justifies it, and, secondly, from the factual context of the instant appeal, where the provision cannot possibly prevail over the countervailing factors which are present. As a result, I think the preferable course would be that any widespread expansion from the Article's traditional sphere of influence should be case driven and individually worked out."
213. The attempted reliance on Article 40.5 to challenge the power of sale in section 19 is fundamentally misconceived and would represent an unprecedented and unwarranted extension of the important constitutional protection provided by that provision and would overshadow its true and important purpose.
214. Indeed, what the Plaintiffs are asking this Court to do is to convert Article 40.5 into a radically new constitutional provision that prevents the sale of a commercially-owned property that is leveraged many times beyond its value, in order to protect asserted rights of other persons to occupy the property (despite such occupation not being affected by the sale).
215. I would respectfully adopt the concerns expressed by McKechnie J. in Murray that the interpretation of Article 40.5 being attempted here would convert it into a provision "of immense reach, with potential capacity to travel to destinations quite unknown."
216. As was pointed out at hearing, one repercussion of the case advanced here would be that a tenant could have the right to invoke Article 40.5 in order to prevent or impede the sale of a property by the landlord, even if the property was being sold with the tenants in situ. This would be a significant development, which would involve striking a wholly unprecedented balance as between the rights of the dweller under Article 40.5 and the rights of a property owner under Article 40.3.2Ί of the Constitution (which rights may be invoked by a company such as Everyday, as confirmed in Iarnrσd Ιireann v. Ireland [1996] 3 IR 321).
217. I am of course mindful of the imperative to interpret Article 40.5 of the Constitution harmoniously with the constitutional guarantee to vindicate property rights in Article 40.3.2Ί. As Henchy J. stated in Tormey v. Ireland [1985] IR 289 (SC) at page 296 "... where there are two provisions in apparent conflict with one another, there should be adopted, if possible, an interpretation which will give due and harmonious effect to both provisions." I accept the submission by Stairway (written submissions, Ά72) that
"The effect of finding section 19 of the 1881 Act to be repugnant to the Constitution would be to profoundly prejudice the rights of pre-2009 mortgagees and purchasers that have acquired valuable property interests on an understanding of the law premised upon the long standing application of the 1881 Act."
218. The Plaintiffs assert the interests of common good and public policy require this novel, expansive interpretation of Article 40.5 contended for, assertions which I find to be without authority or merit. While some of the cases opened to me do demonstrate situations in which significant and important questions of housing policy arise (such as McDonagh), even then Article 40.5 has not been expanded in the manner contended for here. Further, appeals to the common good and public interest ring hollow when the actual facts of this case, and its background (most particularly the Prior Litigation) are considered.
219. The Plaintiffs make repeated complaint about the want of judicial supervision or independent oversight, as a central plank of the Constitutional Challenge. This position is maintained without any real acknowledgement that (owing to the manner in which they chose to present the case) a sizable proportion of the seven-day hearing before me was taken up with challenges to the right of Everyday to exercise the power of sale and challenges to Stairway's application for possession (as part of their defence to the Possession Proceedings). Accordingly, there has been in the Possession Proceedings - yet again - extensive judicial oversight of the steps taken by the lenders, and the asserted rights of the Plaintiffs, with regard to the Property. It is somewhat surprising that a complaint of a want of judicial supervision is nonetheless persistently relied upon as a lynchpin of the Constitutional Challenge.
220. I consider that complaint to be manifestly unfounded on the facts, and on the basis of the hearing, before me.
221. I would also note that the choice of the Constitutional Plaintiffs to advance several different, technical grounds of defence in the Possession Proceedings, is not only at odds with the premise of the Constitutional Challenge (that the power of sale did arise and was exercised), but also undermines that Challenge, as it is precisely the form of recourse which the Plaintiffs in that Challenge allege to be unconstitutionally lacking.
222. There has therefore been a further comprehensive hearing regarding the requirements that must be met for section 19 to be invoked and an allegation of want of independent oversight, notice or foreseeability simply cannot be maintained.
223. It must also be recorded that the public policy and wider interest deployed by the Constitutional Plaintiffs hinge on the protection of the "family home". I have already addressed the use of this term in light of the Statutory Declarations which Mr Halpin made in order to secure the advance of very significant sums of money to companies owned and controlled by him and (laterally) Ms Keane. I have also addressed the choice made by Mr Halpin that the ownership of the Property would be held by Elektron in order to avail of the benefits of that limited liability corporate structure. These are choices made and distinguish this case sharply from the type of cases in which Article 40.5 has been applied to protect dwellers of residences from involuntary incursion.
224. I see no basis for the radical re-imagining of Article 40.5 that is attempted here either in the language of that provision or in the weighty body of judgments in which it has been interpreted and applied. The facts of this case fall outside of the scope, policy or objective of that provision.
225. In light of this finding, I do not consider it to be necessary - or therefore appropriate - to further analyse or determine questions discussed at the hearing as to the evolution of Article 40.5 or its application in the private law context. It is simply not applicable to a case about the sale of a property that is not occupied by the mortgagor, whatever the nuances of its application in cases that do involve possession.
226. Even if this were not so, the decision as to whether and to what extent section 19 applies is a matter the parties to a contract may decide and is not something necessarily imposed by the Legislature (according to sections 19(2) and 19(3)). This would have been a further issue to surmount in this Constitutional Challenge.
227. The Constitutional Plaintiffs have failed to rebut the presumption of constitutionality enjoyed by section 19. Indeed, even if that presumption did not apply, I would have no hesitation in dismissing the Constitutional Challenge as misconceived.
European Convention on Human Rights ("ECHR")
228. Article 8 of the ECHR was the only provision of the ECHR addressed by the Constitutional Plaintiffs:
"1 Everyone has the right to respect for his private and family life, his home and his correspondence.
2 There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
Position of the Parties
229. The Constitutional Plaintiffs refer in the written submissions to FJM v UK (Application no. 76202/16, 6 November 2018) and to McDonald v McDonald [2017] AC 273. Their position was that section 19 permits the sale of property without any Court order or any balancing of competing rights, that it was enacted long before the ECHR, and that there is no protection contained in legislation to protect persons such as the Constitutional Plaintiffs. It is said in the Constitutional Plaintiffs' written submissions (Ά79 to Ά85) that F.J.M can be distinguished on that basis.
230. The Defendants dispute that Article 8 has any relevance to the Constitutional Challenge. Emphasis is placed on the observation of McKechnie J in Meath County Council v Murray that "it is probable that the Convention does not add to what Article 40.5 of the Constitution ordains and therefore, apart from a limited reference to it, an in-depth analysis of the Convention is not required."
231. They further cite Hogan J in McDonagh "...the wording of article 8 would seem to encompass less than the corresponding provision contained in Article 40.5 and its respect for the "inviolability" of the dwelling" and the observations in the same judgment that the Convention does not have direct effect in Irish law and can only be relied upon to the extent specified in the 2003 Act (Stairway Written Submissions).
232. The following observation of Hogan J was also noted, "[59]A comparison of this case law shows that there is in fact strong overlap between the two provisions, albeit that there are some differences in emphasis and approach."
233. The Defendants' position is that it is unlikely that any protection claimed to arise from the Convention could be greater than that recognised under the Constitution.
234.A distinction is drawn with McDonald v. McDonald on the basis that it concerned eviction and the role of a supplier of a State-owned or socially-owned accommodation.
235. Stairway cite FJM v UK (Application no. 76202/16, 6 November 2018) in which the parents of a vulnerable adult bought her a house with mortgage finance but they fell into arrears, receivers were appointed and applied to court for a possession order. This was appealed to the UK Supreme Court and ultimately to the European Court of Human Rights, which held
"The principle that any person at risk of losing his or her home should in principle be able to have the proportionality of the measure determined by an independent tribunal in light of the relevant principles under Article 8 of the Convention (see paragraph 36 above) has primarily been applied in cases where applicants had been living in State-owned or socially-owned accommodation" (Ά37).
236. They further cite a passage from that judgment in which the European Court of Human Rights refers to the important distinction drawn in Vrzic v Croatia (application number 43777/13, 12 July 2016) between persons living in state-owned or "social-owned" flats and other private accommodation arrangements, and situations where person voluntarily entered into agreements in which they used their homes as collateral, and situations where there was no such voluntary action.
Article 8: Discussion
237. The purpose of the Constitutional Challenge is to invalidate section 19. Section 19 does not concern the taking of possession; neither do the actions of Everyday; and the challenge to Article 40.5 has failed on that ground.
238. Article 8 and Article 40.5 clearly overlap very substantially, and both are directed to the same policy of protection of the dwelling against incursion. It is also abundantly clear that the ECHR cases on which the Constitutional Plaintiffs seek to rely are, like the Article 40.5 cases cited, not analogous to this case. They are typically concerned with evictions from dwellings by public or quasi-public authorities.
239. This is exemplified well by the judgment of Hogan J. in Clare County Council v. McDonagh [2022] 2 IR 122, in which Hogan J. identified two "special and particular considerations" in that case, namely that it concerned "the rights of a vulnerable minority group" and the obligations of a housing authority towards that minority, who had no accommodation alternatives (per Hogan J. ΆΆ100, 102). No proper analogy lies with this case, as can be seen from the following extracts:
"[101]... A critical consideration here is that the present case concerns an application brought by a council in its role qua landowner and planning authority. Yet the council is also a housing authority which has specific statutory duties vis-ΰ-vis the defendants. It has arguably failed in its duty qua housing authority to offer suitable accommodation to the defendants, having regard in particular to Ms. McDonagh's medical needs. If, moreover, a mandatory interlocutory injunction were to be granted, it would mean, in effect, that the defendants would have nowhere to go without necessarily trespassing on the lands of another party.
[102] These are special and particular considerations which, it is important to stress, would not apply, for example, in the case of a private landowner seeking an injunction to restrain trespass. In that situation any article 8 ECHR issues would not in strictness even arise by way of possible defence as the litigation would then be between purely private bodies..."
240. The decision of the UK Supreme Court in McDonald v. McDonald similarly makes it plain that Article 8 has no role in litigation between private persons, as here:
"... public authorities are obliged to use their powers lawfully in accordance with the general principles of public law; it is open to a tenant to defend possession proceedings on the ground that the authority has acted unlawfully: see Wandsworth London Borough Council v Winder [1985] AC 461. As Lord Scott of Foscote pointed out in Doherty v Birmingham City Council (Secretary of State for Communities and Local Government intervening) [2009] AC 367, para 69, this concept of lawfulness has no application to a private landlord, who is entitled to recover possession of his property in accordance with the law for whatever reason he likes" (Ά64 per Lord Neuberger of Abbotsbury and Baroness Hale of Richmond).
241. That judgment also confirmed that private landlords are "not obliged to act compatibly with the Convention rights" (Ά66); that Article 8 does not apply to such private housing arrangements; and that there is no role for the addition of considerations of proportionality in private possession proceedings (Ά43). This was observed to be "unsurprising, given that the Convention is intended to protect individual rights against infringement by the state or its emanations" (Ά37). The judgment of the ECtHR in F.J.M. v. United Kingdom and the extracts therefrom relied upon by the Defendants further confirm this position.
242. I note that no authority was opened in which a private, commercial lender was subject to the obligations of Article 8 or Article 40.5 in its dealings with a corporate borrower, never mind a case in which the issue was the sale - without taking possession - of a voluntarily-encumbered property, which is both a residence and a profitable business. The Prior Litigation and the separate Possession Proceedings show the extent of the judicial resources that have been taken up by the Constitutional Plaintiffs in seeking to resist the loss of possession of the Property and further demonstrate how misconceived the reliance on Article 8 to challenge the sale of the Property is.
243. Article 8 simply does not apply on the facts that are the basis of the Constitutional Challenge. It is not necessary or appropriate to further analyse the judgments concerning that provision. Given the findings made here, the pleading by the State Defendants that the claim for damages is barred by the limitation period in section 3(5)(a) of the European Convention on Human Rights Act 2003 does not need to be decided.
Conclusions on the application of Article 40.5 and Article 8
244. To demonstrate that section 19 is repugnant to Article 40.5 or Article 8 it would have been necessary for the Constitutional Plaintiffs to show that their occupation of the home, the inviolability of their dwelling, was endangered or impacted by the power conferred by that provision.
245. They could not do this, as section 19 provides for the sale of a property and no more. The fact that the sale here was without vacant possession, and there has now been a full hearing in respect of the application for possession of the Property, highlight sharply the contrast between sale and occupation in this case.
246. No authority was opened to me in which a right to rely on Article 40.5 or Article 8 was asserted - successfully or otherwise - to prevent the sale of a property.
247. The facts here are even more stark: the transaction at issue here is a sale of a valuable commercial asset, which is also the residence of Mr Halpin, Ms Keane and their children, which asset was formerly owned by a company which voluntarily assumed very significant indebtedness using that property as security, which security it has been unable to discharge. Some 31 million is owed to Everyday.
248. The cases relied upon by Mr Halpin and Ms Keane in which Article 40.5 or Article 8 have been applied have no application here.
"Housing loan"
249. The Constitutional Plaintiffs rely on the introduction in section 100(2) of the Act of 2009 of a new requirement that, in the case of "housing loan mortgages",
"The power of sale shall not become exercisable without a court order granted under subsection (3), unless the mortgagor consents in writing to such exercise not more than 7 days prior to such exercise."
250. According to section 96(1)(a) of the Act of 2009 this provision only applies to mortgages created by deed after the commencement of Part 10, Chapter 3 of that Act (i.e. 1 December 2009).
251. Section 3 of the Act of 2009 provides that
""housing loan" has the meaning given to it by section 2(1) of the Consumer Credit Act 1995, as substituted by section 33 of, and Part 12 of Schedule 3 to, the Central Bank and Financial Services Authority of Ireland Act 2004 and "housing loan mortgage" means a mortgage to secure a housing loan."
252. According to section 2(1) of the Consumer Credit Act 1995, as substituted by section 33 of, and Part 12 of Schedule 3 to, the Central Bank and Financial Services Authority of Ireland Act 2004,
" 'housing loan' means
(a) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land
(i) for the purpose of enabling the person to have a house constructed on the land as the principal residence of that person or that person's dependants, or
(ii) for the purpose of enabling the person to improve a house that is already used as the principal residence of that person or that person's dependants, or
(iii) for the purpose of enabling the person to buy a house that is already constructed on the land for use as the principal residence of that person or that person's dependants,
Or
(b) an agreement for refinancing credit provided to a person for a purpose specified in paragraph (a)(i), (ii) or (iii), or
(c) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land on which a house is constructed where the house is to be used, or to continue to be used, as the principal residence of the person or the person's dependants, or
(d) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land on which a house is, or is to be, constructed where the person to whom the credit is provided is a consumer."
253. The Defendants in their written and oral submissions rely on section 3(1) of the Act of 1995 which provides that "Subject to this Act, this Act shall apply to all credit agreements, hire-purchase agreements and consumer-hire agreements to which a consumer is a party."
254. A "consumer" is defined in section 2 of that Act to mean: "(a) a natural person acting outside the person's business, or (b) any person, or person of a class, declared to be a consumer in an order made under subsection (9)."
255. No regulations have been made for the purpose of section 2(9) declaring non-natural persons to be consumers.
256. The Defendants advance the interpretation that the term "housing loan" in the Act of 2009 must be interpreted by reference not just to the definition of that term in section 2(1) of the Act of 1995 but also by reference to the scope of the Act of 1995 (being limited to consumer loans) and the definition of "consumer" on which its remit is based. Stairway in its written submissions relies on Hurley v. Pepper Finance [2024] IECA 80, but that authority is relevant only to the interpretation of the terms used in the Act of 1995, not their incorporation into the meaning of "housing loan" in the Act of 2009.
257. The position of the Defendants has a clear logic and attraction to it, as it would ensure the scope of the term "housing loan" would be consistent in both Acts and would be defined by reference to the same meaning of "person". However, the correct interpretation of "housing loans" may not be quite as straightforward as the Defendants suggest for two reasons. First, the Act of 2009 expressly incorporates and adopts the meaning given to the term "housing loan" by section 2(1) of the Act of 1995, but the Legislature chose not to go further. The Act of 2009 could have, but does not, provide that the term "housing loans" is to be interpreted or understood in the same manner as in the Act of 1995 simpliciter. Second, there is an express reference to the person being a "consumer" in sub-clause (d) of the definition of "housing loan" in the Act of 1995, which may cast doubt on the assumption that the term "person" in the other sub-clauses of that definition is also limited to a person who is a "consumer".
258. On balance, I think the better interpretation would nonetheless be that urged by the Defendants, as sub-clauses (a), (b) and (c) of the definition may not refer to a "consumer" but do refer to the relevant person's "principal residence" and "dependents". The only sensible interpretation of these provisions is that they are directed to "persons" in the sense of natural persons.
259. However, there remains a possible question about the express terms of both section 3(1) of the Act of 2009 and the reference to "consumer" in sub-clause (d) of the definition of "housing loan" in the Act of 1995. This is not however a question that needs to be resolved for the purpose of these Proceedings and I do not therefore address it further. It may arise for resolution when there is a concrete set of facts that so warrants, but this is not that case.
260. The reason it does not need to be determined here is because it is manifest and not disputed that the Loans here cannot be within the scope of the Act of 2009 (having been entered between 1998 and 2009). In addition, regardless of whether a broader or narrower view is taken of the term "person" in the definition of "housing loan", there are insurmountable obstacles to the Constitutional Plaintiffs coming within the terms of section 100(2) of the Act of 2009. These obstacles are as follows:
First, the Loans and Mortgages here were entered by Elektron, not by any person who had a principal residence at (or to be built at) the Property. Sub-clauses (a), (b) and (c) of the definition of "housing loan" are inapplicable.
Second, Elektron is not a "consumer" within the meaning of sub-clause (d) of the definition of "housing loan" (even taking the broadest possible interpretation of "housing loan"), so that provision is not applicable.
261. Accordingly, while the Constitutional Plaintiffs assert that the Loans would have been within the category of "housing loan" if they were entered post-2009, I find this claim to be untenable.
262. As Stairway and the State Defendants point out, this leaves the Constitutional Plaintiffs in a situation where, regardless of whether the Loans and Mortgages were entered before or after the coming into effect of the Act of 2009, they would not be covered by section 100(2) and there is no legislative provision which requires a Court order for the sale of the Property. If the Plaintiffs' case is that the absence of this protection for persons in their position renders section 19 unconstitutional, then the same must be true of section 100(2). This has not been addressed by the Constitutional Plaintiffs, but does point to an anomaly in the premise of their Constitutional Challenge.
263. Furthermore, even if the Constitutional Plaintiffs could somehow bring the Loans within the definition of a "housing loan" in the Act of 2009, it is impossible to see how this advances their claim. On this point, I fully agree with and accept the submission of the Defendants that an amendment such as was introduced in 2009 does not undermine or negate the constitutionality or validity of the pre-existing legal framework. It rather reflects a legislative policy decision that applies from 1 December 2009.
264. Insofar as the Constitutional Plaintiffs contend that there must be some retrospective application of the restriction created by section 100(2) to loans that pre-date 1 December 2009, this is lacking in authority or justification. I agree with the State Defendants in that respect.
265. In short, I do not see how the introduction of section 100(2) of the Act of 2009 can or does advance the claims made in the Constitutional Challenge.
266. Insofar as the Constitutional Plaintiffs seek to obfuscate the identity of the borrower and rely on the fact that Mr Halpin and Ms Keane do reside at the Property, in order to bring the Loans and Mortgage within the scope of a "housing loan", that is improper and impermissible. As already noted, a deliberate decision was taken to use the structure and advantages of a limited liability company to acquire and own the Property and this shield cannot be raised, dropped or circumvented when convenient.
Doctrine of Proportionality
267. There are repeated references to obligations and assessments of proportionality throughout the submissions and evidence presented by the Constitutional Plaintiffs. These will be addressed here in respect of the Constitutional Challenge (the attempt to invoke Proportionality in the Possession Proceedings is addressed separately).
268. The first question here is whether the invocation of the doctrine of proportionality in the Constitutional Challenge is barred by the rule in Henderson v. Henderson. Everyday contends "any arguments as to the proportionality of a sale could and should have been made in the context of the possession proceedings, and it is simply not open for the Plaintiffs to now reframe this issue after the fact" (written submissions Ά8).
269. It is said that the fact that the Receiver was seeking possession and not an order of sale is irrelevant, as it was manifest that the purpose of obtaining possession was to sell the Property.
270. There is logic to this argument. However, I am not satisfied that the rule in Henderson v. Henderson does apply to bar a claim based on proportionality in the Constitutional Challenge for three reasons.
271. First, I am not satisfied that the Prior Litigation can be sufficiently equated with proceedings concerning the sale of the Property to engage that rule.
272. Second, I am also not persuaded that the proportionality assessment would necessarily be the same when the sale or possession of property is at issue. The possibility that a sale may have been foreseeable in 2013 is not sufficient to draw that equation between the two.
273. Third, considerations of proportionality are heavily fact-specific and it may be necessary to weigh the specifics of how a property was or was to be sold to apply that doctrine properly (if it is properly applicable).
274. It is simply not apparent to me that the claim that there needs to be a proportionality assessment before selling the Property was one that could or should have been run in the Receiver Possession Proceedings (or other Prior Litigation).
275. While it is not barred as an abuse of process, there is no pleading in the Constitutional Challenge related to proportionality (a point emphasised by Everyday) and the Agreed Issues List contains no reference to proportionality or synonyms of that term. For this reason, I have a serious misgiving about the doctrine of proportionality being advanced as the basis for any claim by the Constitutional Plaintiffs.
276. However, I do not need to, and do not, decide the question on that basis alone. Rather, there are further important reasons that militate against any substantive consideration of this point.
277. The starting point is that, while there is no reference to proportionality in the pleadings, the written submissions of the Constitutional Plaintiffs do refer repeatedly to the proposition that there needs to be a proportionality assessment of the impact of the sale of a property and a "proportionate balancing of rights" (Ά107c).
278. The "four key pillars" of the Constitutional Challenge are identified in the written submissions, two of which concern the absence of any requirement in section 19 for a proportionality assessment (Ά3).
279. The case of Heaney v. Ireland [1994] 3 IR 593 is invoked and it is contended on the basis of that case that "any legislation which permits the sale of a family home without order of the Court is one which is lacking any test of proportionality. As such it amounts to unlawful interference with the rights of those dwelling" (written submissions Ά71).
280. Reliance is also placed on the judgment of Hogan J. in McDonagh v. Clare County Council [2022] 2 IR 122 and the reference to the need for "an appropriate proportionality analysis" in the context of orders sought by a public authority to remove dwellers who were illegally occupying land (McDonagh Ά125). Similar reliance was placed on judgments applying Article 8, ECHR.
281. The case made by the Constitutional Plaintiffs in reliance on these authorities is that section 19 does not provide for any such proportionality assessment and is unconstitutional on that basis. Their case is grounded on the absence of a proportionality assessment when section 19 is invoked.
282. They advanced (and have now lost) that challenge and cannot advance an alternative case that is at odds with it. That would be a collateral attack on the premise of their own pleaded Constitutional Challenge, would render that Challenge an academic one, and would be an abuse of process. There was no pleading or particularisation and no submissions directed to an alleged requirement of a standalone proportionality assessment. This case cannot be and is not permissible (to the extent it is being attempted).
283. There is also a marked failure by the Constitutional Plaintiffs to identify any source of, or authority for the imposition on a private, commercial mortgagee of a free-standing, generally-applicable obligation of proportionality in the sale of a voluntarily-mortgaged mixed use property such as Aberdeen Lodge.
284. Everyday contends that such an obligation has no place in a challenge to the conduct of a private mortgagee. That argument is certainly a persuasive one, but I do not believe I need to decide the question on that basis.
285. Rather, there are a number of features of this case which put it beyond doubt that an affirmative duty of proportionality cannot be deployed in the Constitutional Challenge.
286. The first point is that I have already determined that Article 40.5 and Article 8 ECHR cannot be invoked to impugn section 19 in the circumstances of these Proceedings. There is no authority advanced and none of which I am aware which could support the imposition of an untethered, standalone obligation to act proportionately or conduct a proportionality assessment on a private mortgagee in a case such as this one. It would be a significant incursion on the rights of property owners under the Constitution and the ECHR and no legal or factual justification for such a finding is present here, absent a countervailing constitutional right.
287. The second point is that the reasons for the finding that Article 40.5 and Article 8 are not applicable to this case would also inexorably lead to a finding that there is no duty to act proportionately. Those reasons, it may be recalled, concern the nature of the transaction sought to be challenged, which is a sale by a private commercial undertaking of a property which had been proffered by its corporate owner as security for substantial and voluntarily-incurred debt, which is now outstanding in the amount of some 31 million, and which sale is leaving the occupants in situ. It would be a far-reaching evolution in the law to impose a positive duty on a private mortgagee in those circumstances to act proportionately vis-ΰ-vis the occupants, quite apart from the difficulty in interpreting or applying so amorphous a duty. The suggestion in this case, for example, that evidence about Mr Halpin's ill health is relevant to proportionality (day 2, page 83) illustrates how far-reaching and subjective the case being attempted is.
288. Just as Article 40.5 and Article 8 are not applicable here, so too is reliance on the doctrine of proportionality misplaced. It simply lacks any stated legal basis or authority.
289. This is confirmed by Whelan J. in Pepper Finance Corporation (Ireland) DAC v. Persons Unknown [2022] IECA 170;
"It is to be borne in mind that Pepper is a private corporate entity and, as has been made clear in decisions such as in FJM v. United Kingdom [2019] HLR 8, the principle that any person at risk of losing his home should be able to have the proportionality of his eviction determined by an independent tribunal does not apply where possession is sought by a private individual or enterprise. Accordingly, the issue of proportionality does not arise in this case." (Ά97).
290. I consider any one of the hurdles identified here would be sufficient to determine and rule out any claims based on the doctrine or obligations of proportionality in the Constitutional Challenge, but taken together they are firmly dispositive.
The Licence Claim
Preliminary Objections
291. There are preliminary objections to the Licence Claim based on Henderson v. Henderson and on the doctrine of estoppel. For the reasons set out below, I regard these as valid and well-founded objections.
292. However, these objections are based on the facts that existed at the time of the Prior Litigation. As such, I consider it necessary to also assess the evidence that post-dates the Prior Litigation to determine whether there is a separate Licence Claim based on facts and events that post-dated and could not have been advanced in the Prior Litigation.
293. There are also some specific defences raised by the Defendants (Stairway in particular) which will be addressed, including the "Rule in Pinnel's Case".
Henderson v. Henderson
294. Stairway urged that any reliance on an alleged licence, life estate, right of residence or similar (a set of claims which, as counsel for Stairway quite correctly points out, was the subject of scant attention in these Proceedings) is an abuse of process as the grounds for such claims were wholly known to, and/or raised by, the Constitutional Plaintiffs in the Prior Litigation.
295. Particular emphasis is placed on the judgment of Peart J in the Section 316 Proceedings and the sworn evidence of Ms Keane in those proceedings in which rights of occupation of the Property were asserted based on the history of residence there. It is fairly accepted that the judgment of Peart J. does not deal with a specific licence claim (or similar) but it is said that all issues concerning the occupation of, and rights regarding, the Property could have been pursued, and the respondents to those Proceedings instead chose to ultimately run a narrow case. This is said to be an election which leads them to fall foul of the rule in Henderson v. Henderson.
Discussion
296. There is no reason given as to why the asserted entitlements to a licence or life estate were not brought forward and pressed to conclusion in the Prior Litigation (most particularly the Section 316 Proceedings). Indeed, the Constitutional Plaintiffs in their own written submissions record that McDonald J. has previously found that Mr Halpin has "no ownership of any interest" in the Property and could not avail of the personal insolvency regime ([2019] IEHC 97). In that judgment, the Court found that Aberdeen Lodge was "not the property of" Mr Halpin; that Mr Halpin owed no debt to Kenmare that was secured on the Property; and that the Property was not relevant to any arrangement that may be put in place for Mr Halpin. The absence of any interest on the part of Mr Halpin in the Property has therefore been the subject of a prior determination (albeit it must be observed that a right of residence, licence or similar was not specifically addressed by McDonald J.).
297. I therefore find that the Licence Claim (as broadly defined in this Judgment) based on the residence and asserted rights that pre-dated 2009 cannot now be pursued in these Proceedings.
298. Even if this was a matter within my discretion (and I do not believe it is on the findings I have made), there is no countervailing consideration which justifies the Licence Claim being permitted to proceed. On the contrary, the history of litigation here militates against allowing further latitude to the Plaintiffs.
Estoppel as a Defence
299. Stairway pleads and contends that the Constitutional Plaintiffs are estopped from asserting any licence, right or other entitlement to reside or interest in the Property, by virtue of the Family Home Declarations.
300. In the 2003 Family Home Declaration, Mr Halpin stated that the Property was not a family home within the meaning of the Act of 1976 and that, "No lease, letting agreement, tenancy agreement, licence or similar agreement has been made by the Company which would entitle any person to reside in the Property." He also stated that the Property was "not subject to any trust, licence, tenancy or proprietary interest in favour of any person or body corporate.... and the Property is held free from encumbrances (other than the existing Mortgages..)".
301. In each of the other Family Home Declarations, he made substantially the same statements.
302. Under cross-examination by counsel for Stairway regarding the statement in the 2003 Declaration that "No lease, letting agreement, tenancy agreement, licence or similar agreement has been made by the Company which would entitle any person to reside in the Property", Mr Halpin gave the following evidence:
"Q. Well, I'm going to have to ask you the question again, Mr. Halpin. When you signed the declaration, was the declaration either (a) true or, alternatively, was it (b) false?
A. Well, it obviously wasn't true because I was living there. So, I mean, if you take it like that, but I just have to caveat that by saying that everybody asking me to sign it knew I lived there.
Q. So you signed what you knew to be a false declaration at the time?
A. Well, yeah, it wasn't factual." (day 2, pages 99 to 100).
303. He was then questioned about the statement that, "I make this Declaration conscientiously believing the same to be true by virtue of the Statutory Declarations Act, 1938 and for the satisfaction of the Irish Nationwide Building Society" and asked whether that was a false statement. His response ultimately was
"I mean, I don't know if it's a false statement. It's probably a bit incorrect statement. I didn't set out to mislead Irish Nationwide at any point" (day 2, page 104).
304. He was cross-examined regarding the statement in the 2003 Declaration that
"The Property is not subject to any trust, licence, tenancy or proprietary interest in favour of any person or body corporate arising by virtue of any arrangement, agreement or contract entered into by the Company or by virtue of any direct or indirect financial or other contribution to the purchase thereof or by operation of law or otherwise and the Property is held free from encumbrances."
305. It was put to him that this was inconsistent with the case now pleaded and he stated "it was an incorrect document" and "it's not the factual position" (day 2, page 105). He later stated, "And the answer is I did sign them and I'm not denying that I signed them, but that wasn't the factual position in the house" (Day 2, page 107).
306. Mr Halpin's evidence was that he would give the same answer in respect of each of the Declarations, the answer that they did not reflect the factual position. He also ultimately agreed that the 2005 Declaration was made in the context of a refinancing and loan of 15 million to Crossplan and Elektron, and that the declarations were essential to secure those funds.
307. While Mr Halpin accepted that he participated in the execution of false declarations, he repeatedly emphasised the knowledge and role of others:
"... if the bookwork was created, I signed it, yes, I did sign it, but everybody was in full knowledge of what I was signing and where I lived and what it was all about. So, like, I was not misleading anybody. If anybody is creating somebody and they produce a document and they know it's wrong and they ask me to sign it, well they are completely at fault if they knew that that document was wrong." (day 2, page 111).
308. No evidence was led from any of the other persons (the banks or their agents) who were alleged to have knowledge of the factual situation of Mr Halpin's residence at the Property. The state of knowledge of any of the relevant banks or their agents cannot therefore be taken as a proven fact. However, Mr Halpin was not substantively challenged on his evidence in this respect.
309. It is also relevant to record the evidence of Mr Egan (for Stairway) that he was aware that Mr Halpin, Ms Keane and their children were "presently in occupation of the property" when it was acquired (day 4, page 47). Mr Keogh for Everyday similarly accepted that it was known that the family was in occupation of the Property (day 3, page 148). The position is also admitted by Everyday and Stairway in their Defences.
Estoppel: Discussion
310. The real issue is not whether Mr Halpin resided at the Property (the Declarations do not address that specific point). Rather, the relevant point is that the evidence shows that Mr Halpin knowingly signed false declarations that there was no agreement, licence or right entitling any person to reside at the Property. These declarations were relied upon in order to obtain, and refinance, very substantial loans to Crossplan and Elektron. Indeed, the evidence of Mr Halpin is that the declarations were beneficial to everyone and he presumed they were necessary for the loans to be entered (day 2, page 110).
311. Accordingly, the material misrepresentation and the detriment arises from the representation that there was no agreement conferring a right of residence, licence or similar; those Declarations were necessarily relied upon to allow for the entry into the loan agreement in question; Mr Halpin now seeks to resile from those Declarations; and companies controlled by Mr Halpin benefitted therefrom. The detriment to the original lenders is evident.
312. I find Stairway's defence that the Declarations give rise to an estoppel to prevent Mr Halpin from asserting a right or licence to reside at (or other interest in) the Property to be well founded. Therefore, in addition to being barred by Henderson v. Henderson, the Licence Claim is barred by the doctrine of estoppel. No convincing argument to the contrary was advanced by the Constitutional Plaintiffs.
313. It is also relevant to note that equitable considerations do not weigh in Mr Halpin's favour in this respect, given that he has admitted the knowing falsity of the statements he repeatedly made and given the history of conduct of Mr Halpin and Ms Keane in the Prior Litigation, particularly the failure to comply with the Possession Order.
314. The claim based on a licence, life estate or other entitlement to reside at the Property is dismissed.
315. However, as already noted, I consider it necessary to assess the evidence given at trial to ensure that it does not warrant a different finding and that there are not more recent facts, unknown at the time of the Prior Litigation, which could ground the Licence Claims made.
Evidence concerning the Licence Claim
316. The only evidence relied upon to ground the Licence Claim was the oral evidence of Mr Halpin. This evidence will therefore be assessed, to verify whether it supports a Licence Claim that has arisen since the Prior Litigation. The only relevant period of time to assess is the period since the expiry of the final stay on 15 February 2019, as (a) any assertion of a licence, right, or entitlement to reside based on facts that pre-date the Prior Litigation has been dismissed and (b) the residence of Mr Halpin and Ms Keane at the Property between the Prior Litigation and 15 February 2019 was on the basis of a Court order and cannot be relevant to an alleged agreement, licence, estate or contractual right.
317. In his evidence, Mr Halpin generally tried to demonstrate the existence of some right to reside at the Property by reference to three matters: the existence of an "agreement" or "arrangement"; the payment of monies; and the receipt of certain letters.
318. With regard to the alleged agreement or arrangement, he referred variously to agreements between counsel, agreements "by the court", "a verbal agreement", an "arrangement", to "discussions" that were going on, to "serious discussions between our accountant". His evidence in direct examination was "that we were constantly in discussions and we felt we were always waiting a solution" (day 2, page 55).
319. His evidence is vague and there is no clarity as regards whether he believes there was a concluded agreement or not, and, if there was, when it was entered, what the agreement is supposed to entail or even which party it was entered with. It is simply impossible to discern from Mr Halpin's evidence any consistent position as to whether there was a concluded agreement or arrangement or, if there was, what he says was agreed.
320. Apart from the incoherence in his testimony, he distinctly said on at least two occasions in his evidence that it was a verbal agreement. However, there was then an exchange with counsel for Stairway in the following terms (day 2, page 152):
"Q. Mr. Halpin, there is no evidence of any agreement; isn't that right?
A. Between the counsels at that point? There is certainly.
Q. Where is that?
A. Do I have it now from all those years ago? No, I don't."
321. I find this answer to be confusing and difficult to reconcile with the repeated references to the agreement being verbal only.
322. His answers about the existence of a written or verbal agreement or arrangement is also hard to marry with the answer given under cross-examination which indicates that he was relying on the payment of monies alone:
"I'm not a lawyer, but I believe that if you accept a payment, you have, in other words, sort of entered into a contract, you have continued that contract." (day 3, page 81).
323. There are too many different and contradictory versions given by Mr Halpin of the rights he asserts and where he says they came from to provide evidential support for the claims sought to be made.
324. I prefer the evidence of Mr Keogh for Everyday on this point. His evidence-in-chief was that there was no agreement with the Halpin Defendants (day 3, page 124) and, under cross-examination, he stated that the arrangement for the payment of monies expired when the stay expired on 15 February 2019 (day 4, page 23) and that the payment of monies thereafter conferred no rights or entitlements (day 4, page 25).
325. I am satisfied that there is no convincing evidence of engagement or an agreement or the conferral of rights by any other means on the Constitutional Plaintiffs.
326. With regard to the question of payments, Mr Halpin in his evidence emphasised heavily the transfer of monies to Kenmare and then to Pepper from December 2016 to May 2018 (of 3,500 monthly); from June 2018 to February 2020 (5,000 monthly) and from June 2021 to the end of 2022 (1,750 monthly) and then further payments of that amount in 2023, including from June to September 2023 to Everyday. Everyday did not dispute that such payments were made.
327. I note that (after the expiry of the stay) the payments and amounts were at the apparent election of Mr Halpin and bear no correlation whatsoever to the sums that would be required either to service or repay the Loans or for the rent of the Property on an open market.
328. While Mr Halpin claimed that he had certain rights because he paid those monies, I reject this evidence and the claim based on it. I prefer the evidence of Mr Keogh for Everyday who answered under cross-examination as follows:
"... 1,750 per month where the interest only obligations were in excess of 100,000 per month, so that, to me, doesn't constitute an arrangement at all. The arrangements that I do know of are ones where a borrower would be repaying something that was near the actual contractual amount.
Q. And when did you write -- have you any letters where you or any of your predecessors wrote to say "Things have now changed. You had an arrangement by way of a court order, and you've continued with that arrangement but they've now changed" -- where is that? When did that happen?
A. Well, there was no arrangement in place when we purchased the loan. So we certainly didn't write to Mr. Halpin in that regard." (day 4, page 16).
329. Mr Keogh had confirmed earlier in his evidence that
"the borrowers were paying the money by standing order, so they would have been doing that off their own bat. We are happy to accept the money because there is a debt owing of in excess of 30 million and those monies were being paid directly into that loan, albeit that they weren't even going anywhere near servicing the instruments" (day 3, page 155).
330. In response to a question about the effect of the payments, there was the following exchange:
"Q. Did you think by paying those amounts Mr. and Mrs. Halpin and their children got any rights to reside or to continue to reside?
A. No.
Q. A lease or a -- nothing?
A. No, I did not.
Q. You thought they got absolutely nothing?
A. No." (Day 3, page 155)
331. This evidence was given without any ambiguity or hesitation and was consistent with the state of the evidence overall. Mr Keogh furnished an entirely credible account of how Everyday treated and regarded the payments made by Mr Halpin.
332. Heavy reliance is placed by Mr Halpin on the receipt of a letter from Pepper regarding the treatment of payments during the Covid pandemic, to the effect that they would be treated the same way as others, and standardised "hello" letters received on the transfer of the loans which referenced terms remaining as before, including a letter of 6 June 2023 from Everyday.
333. Such letters were relied upon by Mr Halpin in his oral evidence as demonstrating or supporting the existence of an agreement regarding the right of the Constitutional Plaintiffs to occupy (or even have a life estate in) the Property.
334. I consider the reliance Mr Halpin places on these relatively formulaic letters to be strained. Mr Halpin is an experienced businessman and I find the idea that he would (or could reasonably) have derived the meaning or implication he claims from such correspondence, and his evidence to that effect, to be unconvincing.
335. A further evidential issue with the Licence Claim is that the Receiver did renew the contempt proceedings in April 2019 and this is at odds with any suggestion of an agreement or arrangement or licence to permit the continued occupation of the Property by the Constitutional Plaintiffs. Mr Halpin's response in sworn evidence (under cross-examination) was to suggest that the Receiver must not have been in constant contact with Pepper, ("I'm not sure about the cooperation between Pepper and the receiver, but I can assure you payments were being made and that was our understanding, that we were in occupation through an agreement", day 2, page 147). I reject this as an implausible basis to explain those steps by the Receiver.
336. It was apparent to me from his evidence that Mr Halpin has a grievance as to how he perceived himself and his family to have been treated in engagements with banks. His anger was apparent at times during his oral evidence. It can be seen in the allegations he makes about insider dealings and deliberate attempts in one instance to use "a shock tactic to destroy our family and destroy our lives" (see day 3, page 66).
337. I have no doubt that this anger was genuine, but it did not demonstrate or support a rationale view that he had a contractual right or licence to remain at the Property.
338. From my observation of his evidence and having considered the inconsistencies in it, I was not convinced that Mr Halpin did believe that there was a valid, enforceable, agreement, arrangement, licence or right to remain in residence at the Property. I accept that he believed that an agreement could be reached, a deal could be done, but I see no basis for him to have formed the view that any form of agreement had already been reached, and the evidence before me certainly did not support the existence of any agreement conferring rights on Mr Halpin, Ms Keane, Elcktron or Madison.
339. However, even if Mr Halpin did have a subjective belief that he had gained an entitlement or right to reside at the Property or had some form of agreement with the mortgagees, this belief was not well-founded as a matter of fact. On the contrary, I regard it as a view that could not reasonably be held on the basis of the evidence.
340. The fact is that there is nothing to corroborate the existence of any agreement or arrangement which conferred rights of occupation, a licence, life estate or any other right on Mr Halpin or Ms Keane to reside at Aberdeen Lodge. There is nothing emanating from any of the mortgagees or otherwise to indicate an agreement of any description with Mr Halpin, Ms Keane, Elektron or Madison.
341. It must also be observed that, even if there was a licence of some sort of right to remain there (which I do not believe is demonstrated on the evidence), that could only be a bare licence and I do not see how it would be enforceable against Stairway. I accept the position of Stairway in that respect and the reliance placed on David Allen & Sons v. King [1915] 2 IR 448 and Ashburn Anstalt v. WJ Arnold & Co. [1989] Ch 1, for the proposition that "A mere contractual licence to occupy land is not binding on a purchaser of the land even though he has notice of the licence" (Ashburn Anstalt, per Fox LJ) (Stairway Defence, Ά68,Ά69; written submissions ΆΆ81, 82). These cases were not substantively addressed by the Constitutional Plaintiffs.
342. The Constitutional Plaintiffs also plead that a licence in, or right to reside at, the Property was conferred on Mr Halpin, not by the Defendants, but by Elektron (Statement of Claim in the Constitutional Challenge Ά33). This point, which was not pressed in evidence or submissions, was wholly disputed by Everyday and Stairway. For my part, I do not understand how it can be asserted that Elektron can possibly have conferred an interest on Mr Halpin or Ms Keane to which it itself had no entitlement. There was no real attempt to address or persuade me on this point, but, lest there be any doubt, I reject this proposition. I would also note that is evidences a very selective reliance on the separate corporate personality of Elektron, which cannot avail Mr Halpin or Ms Keane in seeking to demonstrate the existence of some licence or estate or other right related to the Property.
Additional submissions regarding the Licence Claim
343. Additional arguments were advanced by Stairway to refute the Licence Claim. These do not strictly need to be decided, given the findings already made and I do not address the provisions of the Land and Conveyancing Law Reform Act 2009 cited, for example.
344. However, I would note that the reliance by Stairway on the rule in Pinnel's Case (1602) 5 Co Rep 1171 in oral submissions (not in pleadings or in written submissions) seems weak.
345. I am mindful that it was not pleaded and that the Plaintiffs were not on notice until closing submissions that it was being invoked. Evidence was not therefore addressed to its application.
346. However, the judgment of Laffoy J. in Barge Inn Ltd v Quinn Hospitality Irl Operations 3 Ltd [2013] IEHC 387 ("Barge Inn"), confirms that, "It is beyond question that the rule in Pinnel 's Case still represents the law in Ireland and this Court is bound by it..." (Ά62).
347. Even so, I am not persuaded that it is applicable here. The reason is that the Constitutional Plaintiffs are not in fact arguing that they have made payments which do discharge the whole of the debt owed. This case is not comparable to the rental situation addressed in Barge Inns, where the issue was whether there was an obligation to accept a reduced rent in discharge of the obligation to pay full rent. There was no rent paid here, on the Defendants' case. I agree that there is no question of the payments that were made unilaterally by the Constitutional Plaintiffs in the amount of some 1,750 or 5,000, bearing any correlation to the profits being made, or the amounts properly required to repay or even service the Loans, or to what could conceivably be a proper rent for the Property (reduced or otherwise).
348. I also note that the position is muddied by repeated attempts by the Constitutional Plaintiffs' counsel to categorise the payments as "rent" (day 4, page 81, for example). However, I am not convinced on the basis of the very limited submissions made to me in this regard, that the Rule in Pinnel's Case is properly or even necessarily engaged here. It may well be that another case will require a final determination on of the scope of the Rule in Pinnel's Case in a case such as this one. This is not that case.
Reliance on Estoppel by Constitutional Plaintiffs
349. The Constitutional Plaintiffs advance a claim of estoppel to support the Licence Claim. On this point, Stairway relied upon the summary of the components of that doctrine as set out by Laffoy J. in Barge Inn (derived from McDermott on Contract Law (2001))
"(a) the pre-existing legal relationship between the parties;
(b) an unambiguous representation;
(c) reliance by the promisee (and possible detriment);
(d) some element of unfairness and unconscionability;
(e) that the estoppel is being used not as a cause of action, but as a defence; and
(f) that the remedy is a matter for the Court." (Ά68)
350. In this case, I have already found that there is no evidence before me of a representation from the lenders, in any form, unambiguous or otherwise, that it was granting some form of rights to the Constitutional Plaintiffs to remain in occupation of the Property; there is no evidence of reliance (detrimental or otherwise) by the Constitutional Plaintiffs; and the estoppel is being used by the moving parties in the Constitutional Challenge, as the basis for seeking orders that they have a life estate or equitable interests in the Property, not as a defence. The requirements at (b), (c) and (e) are not satisfied.
351. Insofar as Mr Halpin and Ms Keane point to monies expended on the Property, it must first of all be emphasised that they kept all profits from the running of the business at all times since the Possession Order was upheld by the Supreme Court directing them to vacate the Property. In Barge Inns Laffoy J. rejected the contention that there was consideration and detriment owing to the improvements made and monies expended on the property at issue in that case:
"Even if the plaintiff had no existing obligation to effect all or some of the improvements which were carried out, the evidence does not establish that, as part of the "deal" for the reduction of the rent reserved by the 2009 Lease in respect of the Demised Property the plaintiff entered into a commitment with Barge former landlord to execute the works in question. I find, as a matter of fact, that no such commitment was given by the plaintiff" (Ά78).
352. The position is considerably more stark here than it was in Barge Inns (in which there was an agreement to accept reduced rent). Here, there is simply no evidence of any agreement whatsoever, and no evidence of any consideration being furnished by the occupants in return for the alleged agreement to accept varying monthly payments that fall vastly short of the sums required to service the loans, never mind repay the indebtedness or pay anything resembling market rent.
353. The situation can be sharply contrasted with that which arose in Barge Inns, which led Laffoy J. to comment that the rent that was previously payable in that case (400,000 per annum for a licensed premises) was in excess of a reasonable or market rent (Ά85). Here, the proposition being boldly advanced, if the estoppel/licence argument is followed through to its logical conclusion, is that the lenders agreed, and should now be bound by equity to accept, a monthly sum of between 1,750 and 5,000, for the occupation of a residence and sixteen bedroom guest house in a prime Dublin location, which the High Court and the Supreme Court have ordered them to vacate, and in respect of which a loan of some 31 million is owed (on Everyday's figures, day 3, page 118).
354. There is no basis in equity, law or on the available evidence for that proposition and the reliance on promissory estoppel to ground a claim of a right to reside at the Property (whether based on a licence, life estate or other agreement) must be firmly rejected.
355. If there was any doubt as to the failure to satisfy the criteria (which there is not), I am not satisfied that considerations of equity would weigh in favour of the Constitutional Plaintiffs, particularly given the failure to comply with the Receiver Possession Orders.
356. In any event, Barge Inns is authority that the effect of the doctrine (if appliable) would be to suspend, not extinguish, the lender's rights: "its effect is to suspend not to give up altogether a legal right, the right to resile from the promise being available where reasonable notice is given (per Clark at p. 79)" (Ά70). It cannot therefore advance the claim being made by the Constitutional Plaintiffs to a life estate or equitable interest in the Property.
Conclusion on the Licence Claim
357. The Licence Claim is barred by Henderson v. Henderson and by the doctrine of estoppel. Further, and in any event, there is no evidence since the Prior Litigation which can justify any claim of a right to a licence, life estate or other interest in the Property on the part of Mr Halpin, Ms Keane, their children, or any other entity. This Claim is rejected.
The Possession Proceedings
Pleadings
Stairway's Statement of Claim
358. Stairway's claim is that it became the lawful owner of the Property on 11 September 2023, and that the power of sale had arisen and was exercisable as of that date. By way of replies to particulars, it is pleaded that the moneys secured by the Mortgages had become due and owing, IBRC having made lawful demand for payment, as determined by the High Court and the Court of Appeal (and leave to appeal to the Supreme Court having been refused) in the Receiver Possession Proceedings.
359. It is pleaded that Stairway has been denied the use, enjoyment, rents and profits of the Property; that the Defendants are trespassing on the Property and that the occupation of the Property has caused loss and damage to Stairway.
360. Various reliefs are sought, including an order requiring the Halpin Defendants to deliver up vacant possession of the Property to Stairway and an order restraining their trespass.
Defence
361. The Defendants plead that the Constitutional Challenge discloses a defence to the Possession Proceedings.
362. It is denied that a valid and/or enforceable deed of conveyance was entered between Everyday and Stairway regarding the Property. It is then denied that the fee simple in the Property was conveyed to Stairway (while the Defence actually denies that the fee simple was conveyed to Everyday, it appears that the pleading in question is in reply to paragraph 5 of the Statement of Claim, which pleads the conveyance of the Property by Everyday to Stairway).
363. The Defence also includes a denial of Stairway's pleading that the powers of sale had arisen or were exercisable by, or vested in, Everyday and further denies that Everyday was at liberty to effect the conveyance without obtaining a court order (given the fact that the Halpin family were residing at the Property).
364. There are a series of additional denials, including denials that Stairway became the lawful owner of the Property; that the Defendants were trespassers; that loss is suffered. There is a separate plea of estoppel against Everyday, based on the asserted facts that payments had been made, no warning was issued before sale, and Everyday relied on a demand letter issued in February 2012.
Issues in the Possession Proceedings
365. The right of Everyday to sell the Property to Stairway has already been determined. I have also considered the unredacted deed of 11 September 2023 by which Everyday and Stairway agreed to the sale of the Property to Stairway for the sum of 1.8 million, and have determined that it evidences the transfer of the Property to Stairway and that the objections and defences raised by the Defendants are lacking in merit. Stairway's title to the Property has accordingly been established by admissible evidence.
366. The position of Stairway is that, if the Plaintiffs fail in the Constitutional Challenge, then it is automatically entitled to succeed in the Possession Proceedings. It asserts a right to recover possession of the Property of which it is the lawful owner in reliance on Keating v. Jervis Street Shopping Centre Limited [1997] 1 IR 512 (a case which, it must be noted, concerned an application for an interlocutory injunction). Stairway also points to the decision of Hogan J in Clare County Council v. McDonagh [2022] 2 IR 122 (which also concerned an interlocutory injunction).
367. The Defendants disagree and seek to resist the order for possession on several grounds (in addition to the unsuccessful arguments advanced to challenge the exercise of the sale by Everyday: see above under heading "Power of Sale").
368. The grounds of defence arise under three broad headings.
369. First, a number of submissions were made regarding Mr Ryan, his failure to give evidence and the disclosure during the hearing that he holds the beneficial interest in the Property.
370. Second, it was contended that the Receiver Possession Order was relevant to, and precluded, the orders sought in the Possession Proceedings.
371. Third, submissions and evidence were presented directed to the alleged obligation and failure of Stairway to act proportionately.
372. These three topics will next be considered.
Beneficial Interest of Mr Ryan
373. Mr Egan gave evidence that Mr Ryan holds the beneficial interest in the Property (as well as holding the beneficial interest in the shares in Stairway itself) and that it was Mr Ryan who furnished the monies to purchase the Property. There is a difference between the parties as to whether this was known before the hearing commenced. I do not consider this to be a dispute that needs to be resolved, although I note that counsel for the Halpin Defendants did state in opening submissions that, "You are going to hear from Mr. Padraic Ryan, he's the beneficial owner of Stairway Property Company. He is going to give evidence on behalf of Stairway and he owns 100% -- his interest is down as 100% of the interest in that property" (day 1, page 147).
374. This exemplifies the confusion that emerged as to whether Mr Ryan owned the beneficial interest in the Property or only in the Company, but the clear evidence of Mr Egan was that it was a beneficial interest in the Property.
375. Counsel for the Halpin Defendants proceeded to make a series of different assertions based on this evidence.
376. It was asserted that this evidence was inconsistent with the case as pleaded and with the relief sought (which are premised on, and refer to, Stairway holding the legal and equitable title and having paid the sum of 1.8 million for the purchase of the Property). It was also stated that a "misleading affidavit" was sworn by Mr Egan in seeking "priority" when an application was made for short service of an injunction application at an earlier stage of the Proceedings. Some considerable emphasis was placed on the fact that the application was made ex parte.
377. It was said that the Possession Proceedings should be dismissed, or all relief sought refused, on the basis that Stairway came to the Court with unclean hands and a lack of candour.
378. These points were disputed in their entirety by Stairway and I agree that they are not valid objections.
379. It is understandable that the Halpin Defendants refer to the incorrect averments and prayers for relief by the Plaintiffs. However, I observed the oral evidence given on behalf of Stairway by Mr Egan on this point and fully accept that it was a drafting mistake in the affidavit to refer to Stairway holding beneficial and legal title, for which he apologised. In submissions, this was confirmed by counsel for Stairway.
380. As regards the affidavit, I consider the importance of the application was overstated, it having been an application for short service. It did not confer substantive priority or advantage on Stairway.
381. Moreover, I do not consider the deficiencies in the evidence to be material matters in the specific circumstances of that affidavit or in light of the purpose for which it was sworn. It is not apparent to me why or how the points of error would have had a material impact of the application. I do not regard the allegations that Stairway made the application with "unclean hands" or attempted to be mislead the Court to be warranted.
382. During the hearing, it was confirmed that a number of the prayers for relief in the Plenary Summons are not being pursued, including the claim for a declaration that Stairway holds the beneficial title in the Property and the reliefs sought at paragraphs 5 to 10 of the Plenary Summons. While this drew criticism from counsel for the Halpin Defendants, I see no reason to regard this as anything than a legitimate and appropriate confirmation as to the scope of the orders in fact being sought. It would have been preferable if this had been confirmed in advance of the hearing, but it is not apparent that this had any impact on the duration, complexity or scale of the hearing or the pre-trial preparations and, moreover, no prejudice has been pointed to. The complaints in this regard are rejected.
383. Counsel for the Halpin Defendants also claimed that, if Stairway was not the beneficial owner, it lacked standing to seek the reliefs sought in the Possession Proceedings; that a deliberate decision was made to issue proceedings in the name of a "shell company"; and that the Halpin Defendants were deprived of the opportunity to decide to apply for security for costs or to join Mr Ryan personally to the Proceedings. It was also claimed that damages for trespass could only be payable to the beneficial owner of the Property. It was claimed that the Proceedings should be dismissed on this basis.
384. Counsel for Stairway contended that the beneficial ownership of the Property is irrelevant. Reliance was placed on the fact that a trustee has the power to sell land, as possession of legal title is what matters (citing section 20 of the Act of 2009) and that, pursuant to Order 15, Rule 8, there is no need to join beneficial owners of property to proceedings related to that property.
385. The decision of Binchy J. in Pepper Finance v Jenkins [2018] IEHC 485 was opened to me. There, it was held that the beneficial owner of a property did not need to be joined to proceedings concerning the property and the trustee did not have to disclose its status as such in the proceedings. In that case, as here, possession proceedings were resisted on several grounds, including that the beneficial owner needed to be joined in the proceedings as co-plaintiff, or alternatively that it needed to be made clear that the plaintiff was issuing proceedings as bare trustee. While that case concerned a somewhat distinct factual scenario of a securitisation agreement, the same general principle is applicable and appropriate here. I find no difficulty or failing in the fact that Stairway alone was named as plaintiff to the Possession Proceedings.
386. I agree with Stairway and am satisfied that the question of beneficial title is not relevant to the Possession Proceedings. Stairway has the right to bring these Proceedings, the question of beneficial title notwithstanding.
387. Insofar as the Halpin Defendants complain that Stairway is a shell company, and that an order for security for costs could have been sought if the possession of beneficial ownership by Mr Ryan was known, this is not a point of any merit and does not provide an answer to the reliefs sought in the Possession Proceedings. If the Halpin Defendants wished to interrogate the assets of Stairway and pursue such an application, it was always open to them to attempt to do so.
388. There was a further claim made that the beneficial ownership of the Property has a relevance to the Constitutional Challenge. No convincing explanation for this contention was provided at the hearing. All that was said was that each of the parties to the Constitutional Challenge proceeded on the basis that Everyday sold the full legal and beneficial title to the Property to Stairway. Be that as it may, I do not see how it is relevant to the issues in those Proceedings whether Stairway acquired the Property legally and beneficially or legally only. The Constitutional Challenge is about the exercise of the power of sale by Everyday and has nothing to do with the question of whether Stairway owned the full beneficial title to the Property.
Failure to call Mr Ryan
389. When Mr Ryan's evidence was expected to commence, Stairway informed the Court and the other parties that he would not be giving evidence. Counsel for the Constitutional Plaintiffs considered the impact of this decision and made two contentions.
390. The first point made was that inferences should be drawn from the failure of Mr Ryan to give evidence. Indeed, it is not disputed by Stairway that the Court is entitled to infer that Mr Ryan would not in fact have given the evidence contradicting Mr Halpin on specific questions of fact.
391. In concrete terms, limited conflicts of fact were identified during the cross-examination of Mr Halpin by Stairway's counsel. There were specific questions put to Mr Halpin about a telephone call with Mr Ryan and a factual dispute was identified about whether Mr Ryan said he was aware of Mr Halpin's medical situation (Mr Halpin has had significant health issues over a number of years) or that he had access to Mr Halpin's "file". Mr Halpin asserted in his oral evidence that Mr Ryan did make such comments. Counsel for Stairway put it to Mr Halpin in cross-examination that these specific assertions would be disputed by Mr Ryan. It was also put to Mr Halpin that Mr Ryan would give evidence that he was aware of the Property from publicly-available information.
392. Given the failure of Mr Ryan to give evidence, Stairway accepts that I am entitled to infer that he would not in fact have given the contradictory evidence suggested during the cross-examination of Mr Halpin.
393. It is not necessary to analyse this question any further. In any event, the inferences in question will not have any impact whatsoever on the decision I have to make in these two Proceedings. Whether or not Mr Ryan made a reference to Mr Halpin's ill health or to having access to his "file" are not matters of any significance or probative value in determining any of the many questions that fall for determination in these Proceedings.
394. There was another point made by Mr Halpin in evidence to the effect that be believed Mr Ryan was an employee of Pepper:
"Mr. Ryan, to the best of my belief, but Mr. Ryan can answer that when he's on the stand, I suppose, he was an employee of Pepper". But perhaps, maybe, we can ask that question of Mr. Ryan." (day 3, page 106).
395. This evidence falls to be weighed on its own merits, but it cannot be plausibly suggested that the fact that Mr Ryan did not give evidence converts this quite uncertain and qualified evidence of Mr Halpin into unequivocal and substantiated evidence sufficient to ground a factual finding that Mr Ryan was an employee of Pepper. An inference drawn from the failure of a witness to give evidence, cannot convert another witness' surmisals (without any direct knowledge) into direct evidence of fact. Having observed the evidence of Mr Halpin and the manner in which this topic was addressed by him, I am certainly not willing to make such a finding.
396. The second point that was made about the failure of Mr Ryan to give evidence was that no evidence is before the Court regarding his beneficial interest or the payment of monies by him. Given my conclusion that the beneficial ownership of the Property is not relevant to the Possession Proceedings, I do not consider evidence on this point to be necessary and do not see a meritorious objection in this respect. I also agree with Stairway that nothing turns on the question of who actually paid the purchase monies in the context of these Proceedings.
397. Insofar as counsel for the Halpin Defendants contended that the relief sought should be dismissed on the basis of the disclosure of the beneficial interest of Mr Ryan and his failure to give evidence, I reject that contention for the reasons given above.
Relevance of the Receiver Possession Order
398. In oral submissions, counsel for the Halpin Defendants contended that the Receiver Possession Order was a personal order which the Receiver could enforce and that there could not be separate Possession Proceedings without an application to Court to vacate that earlier order.
399. An objection was made by Stairway and Everyday that this point was not pleaded, but I note there is a pleading in the Defence to the Possession Proceedings (Ά11) that the Property could not be sold without a Court order, because an order for possession had been made in favour of the Receiver.
400. Stairway's counsel also points out that the Statement of Claim in the Constitutional Challenge includes the pleading that "The order of possession granted to the receiver lapsed in May 2022 and has not been renewed at the time of preparing the within pleading" (Ά19).
401. The point then made in oral submissions on behalf of the Halpin Defendants was the following:
"But in terms of lapsed, there is an order in being, there is an order in being. Whether or not it's lapsed in terms of whether Mr. McCann can now enforce it is a different question and we say he can't because he's discharged as receiver. But that doesn't mean that there is not an order in being. If there is an order in being and you can't use it, you could seek to vacate that order and advise the court that you are no longer pursuing this line of seeking possession, as opposed to have two different orders for possession, one for Mr. McCann in being and one for Stairway Property group in being. So that would be two orders for possession over the same property. And I think that's the point that is being made." (day 1, pages 21-22).
402. I find it difficult to follow this submission. The Halpin Defendants appear to contend that these Possession Proceedings cannot be maintained, owing to the existence of the Receiver Possession Order, which they say is still in being, while also pleading that it has lapsed.
403. I see no merit to this point. The Receiver Possession Order was not complied with, but I do not believe it can be regarded as having "lapsed" (contrary to the pleadings of the Constitutional Plaintiffs). There is also no authority or justification advanced to me for suggesting that the existence of that Order impedes or precludes an application now being made by the current owner of the Property for an order to achieve the same end. In short, I have no hesitation in rejecting the contention that the fact of the making or existence of the Receiver Possession Order is a bar, or otherwise relevant, to the Possession Proceedings.
404. I note too that this case is at odds with the emphasis in the written submissions of the Constitutional Plaintiffs on the distinction between the Receiver Possession Order and these Proceedings:
"while a possession order was previously granted in favour of the Receiver, this does not preclude the current constitutional challenge... the Receiver has since been discharged and the current proceedings involve different parties (Everyday and Stairway) who were not part of the earlier litigation" (Ά107b).
405. I would also observe that the failure by Mr Halpin and Ms Keane (and companies owned and controlled by them) to comply with orders of the Superior Courts is a material matter, and one of concern, regardless of the steps taken to enforce those orders. The suggestion in submissions that the previous orders of the Superior Courts are "personal" to the Receiver obscures the inherent status of, and importance of compliance with, court orders. It is somewhat troubling for them to attempt to deploy the fact that their non-compliance with previous court orders was not effectively enforced, in order to resist an application aimed to achieve the same ends now. I reject that attempt.
Proportionality
406. It was not easy to discern whether or to what end the doctrine of proportionality is relied on in the Possession Proceedings. This case was not pleaded in those Proceedings and it is not satisfactory for such a nebulous, undefined claim or assertion to be advanced without any pleadings by way of defence or counterclaim to support it (to the extent that is being attempted).
407. In any event, I have considered the objection by Everyday that any defence to possession proceedings based on proportionality could and should have been made (if at all) in 2013 in the Receiver Possession Proceedings. I agree that any attempt to resist possession on the basis of proportionality could and should have been brought forward in the Prior Litigation.
408. While there may be additional facts to adduce now, that does not detract from the overarching principle that, if the Defendants wished to argue that an application for an order for possession necessarily requires a proportionality balance to be struck, this was something they could and should have argued in the Receiver Possession Proceedings. They chose not to do so and, for this reason, the attempt to claim that a proportionality test applies to the Possession Proceedings is an abuse of process and should not be permitted or entertained further.
409. While that is a sufficient basis to rule out any reliance on proportionality in the Possession Proceedings, it is in any event a misconceived argument. There is no place for the invocation of a free-standing doctrine of proportionality in possession proceedings between private parties based on inter partes contractual arrangements (if and to the extent that such is being attempted). Article 8 or Article 40.5 have not been invoked in the Possession Proceedings and no legal basis for a separate nebulous requirement of proportionality has been suggested or, in my view, properly exists.
410. There was confirmed by the Court of Appeal (Whelan J., Collins and Pilkington JJ. concurring) in Pepper Finance Corporation (Ireland) DAC v. Persons Unknown [2022] IECA 170, a judgment which was opened to me by both counsel for Everyday and counsel for the Halpin Defendants:
"It is to be borne in mind that Pepper is a private corporate entity and, as has been made clear in decisions such as in FJM v. United Kingdom [2019] HLR 8, the principle that any person at risk of losing his home should be able to have the proportionality of his eviction determined by an independent tribunal does not apply where possession is sought by a private individual or enterprise. Accordingly, the issue of proportionality does not arise in this case" (per Whelan J. Ά97).
Obligation to obtain the best price
411. The Halpin Defendants plead by way of Counterclaim that, "If Everyday were entitled to sell the material property (which is denied) it is asserted that Everyday failed to act in a reasonable and/or prudent fashion..." There are then claims that Everyday failed to market or advertise the Property or to sell it on the open market and that the sale was in breach of Everyday's duties. It is pleaded that the sale ought to be set aside "in circumstances where the sale occurred in breach of the duty to the mortgagor".
412. There is also an allegation that Mr Ryan was a former employee of Pepper.
413. Everyday does not dispute that there is an obligation on a mortgagee to obtain the best price reasonably obtainable, but asserts that it is not properly pleaded here. This point aside, the position of Everyday is that the Halpin Defendants failed to discharge the onus of showing a failure to comply with this duty. Reliance is placed on the valuations that were obtained and on the attempt by Mr Halpin to acquire the Property (as well as fully discharge all outstanding liabilities, now amounting to some 31 million) for the sum of 1.5 million.
Discussion
414. In opening submissions, counsel for the Halpin Defendants referred to this claim as follows:
"MR. KENNEDY: It's still a live matter, but I can say this, that not a lot of time will be spent on the valuation side of things. There are two valuations which are before the court, or three valuations, I think. In the core documents, there's one -- I think it is our valuation at one point in the course of negotiations for about 1.8 million in 2018, and then there is a second valuation from Pepper, who owned the loans at the time, varying from I think around 2 million is the lowest price that they were saying about that, and then the property was ultimately sold for just over 1.8 million. So it is an argument I'm not in a position to say that we're conceding that as a point, we're not calling any evidence in relation to valuation evidence, Judge." (day 1, page 133).
415. This is important. The Halpin Defendants are seeking to make the case that Everyday failed in its duty to obtain the best price reasonably obtainable and bear the onus in that respect. The decision not to call any evidence in relation to valuation is a significant weakness.
416. As is clear from the judgment in Ruby Property Company Limited v. Kilty (31 January 2003, HC, McKechnie J.), the sale must be gauged "at the time of and in light of the facts and circumstances" (page 18).
417. Applying this approach, the following facts are important.
418. First, Mr Halpin himself put an offer of 1.5 million which was intended to purchase the Property and discharge the indebtedness of Elektron and Crossplan (estimated at over 31 million by Everyday). The offer that was sent on behalf of the Halpin Defendants by email dated 15 May 2023 stated,
"we are prepared to make an offer to Pepper of 1.5m in full and final settlement of all the outstanding liabilities of Elektron Holdings Limited, Crossplan Investments, Anne Keane and Patrick Halpin. This Settlement is to include all Legal and Receiver fees. We will, however, pay fees for the preparation of the settlement agreement."
419. Mr Halpin said in direct evidence that "We had made an offer through our solicitor of 1.5 million, which was way in above, in our view, what the loan value was on the property" (day 2, page 67) and under cross-examination maintained that he would have paid up to 1.8 million for the Property (day 3, page 55). This is also pleaded in the Constitutional Challenge (Statement of Claim Ά35a).
420. When cross-examined about his offer of 1.5 million being less than the accepted offer of 1.8 million, he answered "It's less, yeah, but not much less, in comparison, yeah" (day 3 page 73), an answer which is hard to understand.
421. When it was put to him that he was proposing a full settlement of the debts of in excess of 25 million as well as the purchase of the property for 1.5 million, he replied,
"A. But surely any offer that would have been made would have had to -- any offer that would have been made would have had to include that because, otherwise, it was impossible for us to get finance" (day 3, page 75).
422. This evidence does not advance the case that the acceptance of the bid of 1.8 million was a sale at an undervalue. On a related point, Mr Halpin gave evidence that "by the time we found out that it was rejected, the deal was done" (day 3, page 76). When challenged as to the accuracy of that evidence, he repeated, "We were informed after the transaction was complete." However, a letter dated 6 June 2023 was put to him which contradicted this evidence and he accepted that the rejection of the bid was communicated in June (the transaction completed in September 2023).
423. Second, Mr Keogh explained in evidence why and how the decision was taken to sell the Property without vacant possession (day 3, page 114). This was not challenged (nor could it be, given the long-standing opposition of the Halpin Defendants to any attempt to regain possession of the Property).
424. The impact this had on value was explained in evidence by Mr Keogh (for Everyday):
"Well, obviously, when we look at these portfolios, we have a legal tracker which would show us all the previous litigation on the asset. It would have showed the borrower and the borrower's attitude towards that. So, as I said, the main take from that was that it would be very difficult to gain vacant possession of the property and, as such. That would impact the sales price." (day 3, page 117)
425. He continued:
"It's a stressed asset. I suppose, at the end of the day, there was 30 million of debt attached to it with a value, you know, very little value. Nominal payments being made to it. So it was a stressed asset and with an obstructive borrower in situ, illegally.
Q. What view did you then form as the saleability of that asset on the open market?
A. Well, again we formed a view that it would have to be sold as is. With assets like that, it's very difficult to sell on the open market. There aren't many purchasers who have an appetite to go through a long litigation with a borrower who is proving themselves to be acting in the way that they did. So in instances like that, sometimes purchasers might go -- or come to loan owners to have a look at assets like that. So the likelihood of us getting a price anywhere near open market value was zero. It was always going to be at a cut price due to the circumstances attached to it." (day 3, page 118)
426. This evidence was not challenged (other than certain questions about the impact of selling a property without vacant possession when there is a lease agreement or similar in place, a situation which is not applicable here).
427. One specific point made by Mr Keogh in direct examination (and not challenged) was that "It wasn't a property that someone would be able to get a mortgage from, definitely not." (day 3, page 120). He continued that this "obviously greatly reduces the market in that the majority of properties are purchased by way of mortgage, so, therefore, the majority of potential purchasers wouldn't be looking at Aberdeen Lodge" (day 3, page 122).
428. He also stated under cross-examination that testing the market was not an option as there was "a lot of media coverage around what had happened" in this case (day 4, page 13). I accept this evidence, which is consistent with newspaper articles based on interviews with Mr Halpin (which were put to Mr Halpin in cross-examination by Stairway).
429. Having considered the largely unchallenged evidence of Mr Keogh for Everyday, I accept that the sale of a property without vacation possession, particularly against the background of significant, repeated litigation and discord with its occupants, will depress its price and significantly limit the pool of potential purchasers.
430. Third, the only valuations referred to during the hearing indicate a valuation for the Property that is broadly consistent with the price paid by Stairway. A valuation by Lisney placed the value of the Property at 2 million with vacant possession (see day 3, page 115). There was also a valuation from Cushman and Wakefield (both of which were obtained by Everyday during due diligence).
431. Mr Keogh referred in cross-examination to "a BidX1 sales proposal where they were going to put it in an action at 1.8 million also, with a reserve of 1.8. There was a lot of data there" (day 3, page 162)
432. Mr Keogh explained why a new valuation was not obtained:
"Again, we looked at it and saw that the potential to get vacant possession was relatively zero from our perspective. So we didn't go down the route of getting a valuation, which would have been based on an open market value which, in our view, wasn't obtainable at the time -- or if it were obtainable, at great cost and time, which we weren't prepared to take.
Q. The valuation would have been at great
A. No, the valuation would have represented open market value, which again wasn't relevant for the purposes of how we viewed this asset at that time." (day 3, page 120).
433. Mr Keogh stated in his evidence that Everyday had also obtained documents in due diligence that included the notes concerning the previous four years of ownership of the Mortgage and that "we looked at what Pepper had done, we looked at their analysis of where this was going to go, and we agreed with their summary" (day 4, page 8).
434. In the particular circumstances of this case, I can find no fault with how Everyday proceeded and accept the evidence of Mr Keogh in this respect. The Halpin Defendants have failed to discharge their onus to show otherwise.
435. Given these facts, I am satisfied that it is not necessary to further consider this claim that Everyday failed in its duty to obtain a better price. I am also singularly unattracted by an argument by the Halpin Defendants as to how the Property should more productively or prudently have been sold, given that it is their refusal to vacate the Property (despite the Receiver Possession Orders) that is a clearly identified reason for its depleted value and limited available market, and given their own bid to acquire the Property and clear a debt of some 31 million for a sum that was a sixth less than the price accepted.
436. One specific assertion that was made by counsel for the Halpin Defendants on this topic was that Mr Ryan was formerly an employee of Pepper. It was said that this was established in evidence and was uncontested (day 5, page 127, page 161).
437. I reject this contention. I have already addressed the evidence of Mr Halpin on this point and explained the limits to what can properly be inferred from the failure of Mr Ryan to give evidence. To summarise: Mr Halpin did not give admissible, probative evidence as to Mr Ryan's former employment. His evidence was vague, stated to be based on supposition and not based on any disclosed means of knowledge. The fact that Mr Ryan did not contradict it in evidence does not convert what Mr Halpin said into admissible, persuasive evidence of fact.
438. Even if Mr Ryan was a former employee of Pepper (a point on which I cannot and do not make any findings), this does not demonstrate that Everyday did not obtain the best price reasonably obtainable. It also provides no answer to the value which Mr Halpin himself ascribed to the Property. For completeness, I note that Mr Keogh stated under cross-examination that neither he nor anybody else to his knowledge knew anyone in Stairway (day 4, page 12) and this was not challenged or contradicted.
Other Claims Advanced
439. Throughout the Proceedings (and in particular in the direct examination of Mr Halpin and in the cross-examination of Mr Keogh and Mr Egan), the Constitutional Plaintiffs seek to rely on considerations of reasonableness, fairness, prudence, public policy and common interest.
440. It is necessary to be precise and clear about the claims and counterclaims that are made, the pleadings that are relied upon, and the legal basis of each asserted cause of action and obligation.
441. I would note at the outset that these claims are frequently allied with references to "the family home" and similar descriptions of the Property. I have already addressed this nomenclature and will continue to use the neutral term of "the Property" in this section of the judgment.
Obligation to act reasonably
442. In the Constitutional Challenge, it is pleaded that Everyday failed in its duty to Mr Halpin and Ms Keane by failing to notify them of the sale, offer them the Property for purchase, or act "in a reasonable fashion". It is pleaded that Everyday failed in its duty to Elektron by failing to act reasonably or "in the common good"; failing to notify it of the sale; and failing to get the best price (Statement of Claim Ά37 and Ά38).
443. The Counterclaim in the Possession Proceedings similarly includes the plea that Everyday failed to act in "a reasonable and/or prudent fashion" in relation to the conduct of the sale of the Property (Ά25).
444. These claims did not feature in the Agreed Issues List (save for the question of the duty to make reasonable efforts to obtain the best price reasonably obtainable, which is addressed below).
445. These asserted obligations were not addressed in the written or oral legal submissions of Mr Halpin, Ms Keane or Elektron in either case. When asked whether these claims were nonetheless being maintained, counsel for those parties stated in opening submissions, "They are not central to the matters that are addressed in our submissions, I have to accept that." (day 1, page 134).
446. Having offered that helpful clarification, counsel for the Constitutional Plaintiffs made no attempt to demonstrate any legal basis or authority to support these claims and I see no merit in them.
447. It is however notable that the assertion of a duty to act reasonably, fairly, to engage with the Constitutional Plaintiffs, and furnish notice to them of the intended sale, cuts directly across the pleaded foundation of the Constitutional Challenge. If such obligations exist when section 19 is invoked, the grounds of that Challenge would fall away. That was not how the case was pleaded, presented, or run and I find it unacceptable and impermissible for the same plaintiffs to seek to advance such inherently contradictory cases, particularly when the primary case (and the only one addressed in written submissions) is an attempt to invalidate a provision of primary legislation of the State.
448. There being no plausible cause of action based on reasonableness, fairness or similar, I do not consider these matters further. This also has an impact on the relevance of some of the evidence adduced during the hearing, as a good proportion of the direct examination of Mr Halpin and the cross-examination of Mr Keogh and Mr Egan was concerned with the asserted obligation of Stairway and Everyday to have regard to, and act reasonably, fairly and proportionately in light of, the specific interests and circumstances of Mr Halpin, Ms Keane and their children. For example, Mr Halpin spoke extensively about his health during his evidence, and, when the relevance of this evidence was queried, it was asserted to relate to the question of proportionality (day 2, page 83).
449. As I have rejected any case based on proportionality, reasonableness or similar (to the extent such cases are being made), a large proportion of the evidence at trial is simply irrelevant to any issue that is properly part of either of the Proceedings and it is for that reason that this evidence is not addressed in this judgment.
Public policy, common good
450. During the hearing, counsel for the Constitutional Plaintiffs placed some reliance on considerations of public policy and common good. This was done without any clarity as to how or on what basis such factors are asserted to be relevant in private litigation. It was not even clear whether they were being relied upon as part of the Constitutional Challenge, a defence to the Possession Proceedings or in support of the Counterclaim. Whichever is the case, I think it is important to record that I see no role for such considerations to be applied in the circumstances of this case.
451. While it is undeniable that the loss of possession of the Property will have a significant impact on Mr Halpin, Ms Keane, their children, and the companies they control and direct, this does not give rise to, or support, any claim based on public policy or common good or otherwise, in the circumstances of this case.
452. Even if I was mistaken in this respect and such considerations did properly arise, I do not believe they would weigh in favour of the Plaintiffs or against Everyday or Stairway for three primary reasons.
453. First, the Superior Courts have previously ordered and confirmed on appeal that possession of the same Property must be surrendered on foot of the same Mortgages and the Halpin Defendants have failed to comply with those orders. They have instead remained in occupation of the Property for over 6 years beyond the expiry of the Final Stay, and have thereby arrogated to themselves, not just the benefit of a residence, but also the right to earn and keep the profits of sixteen-bedroom guesthouse in a prime Dublin location. While monies have been paid over this period, they do not reflect the size of the Loans owed or the value of the Property.
454. This is relevant in weighing - and rejecting - the attempt to have recourse to the public interest and common good.
455. Second, the Halpin Defendants have availed of every conceivable avenue of appeal and challenge up to the expiry of the Final Stay (Ms Keane and Elektron having been found to have engaged in abuse of process in attempted collateral attacks in the Dismissed Proceedings). The lengthy and involved litigation history to these Proceedings demonstrates how thorough a right of recourse to the Courts has been enjoyed by the Halpin Defendants, in addition to the hearing before me. The outcome of the Prior Litigation was that the Constitutional Plaintiffs were not entitled to possession of the Property and I do not see how it can be asserted that public policy or common good (even if they could be relevant, which I do not believe they are) favour a different outcome now.
456. Third, there are aspects of Mr Halpin's evidence that do not support his position, even if factors of proportionality, public policy or common good were being weighed.
457. Mr Halpin referred in his evidence to being "destitute" and having "no place to go" if Stairway get possession of the Property (day 2, page 70).
458. He expanded on this by referring to the limited number of times he and his family dine out per month ("We hardly even ever go out to dinner, you know -- once a month", day 3, page 33) and to the fact that they "haven't taken any extraordinary holidays of any nature, most years we haven't even gotten a holiday" (day 2, page 71).
459. Under cross-examination, Mr Halpin then gave evidence that Madison had turnover of 229,000 for 2022 and retained profits from that year of 138,703. Mr Halpin subsequently clarified that this was for half of the year only and that the figures were "much bigger" for 2023, with profits of approximately 100,000 for that year (day 3, pages 27 to 29).
460. There was then the following exchange:
"So could I ask you to reflect then on the statement that you made yesterday, which is that if you lose the hotel, that you will be destitute?
A. Yes, the answer is "yes".
Q. Notwithstanding that Madison Manor, at this stage, conservatively, must have profits of at least a quarter of a million euro in it. Would that your definition of destitute, Mr. Halpin?
A. Are you asking me -- I mean, if you're basing it on one year of what it's done, that's not the case
Q. I'm basing it on the present point in time, Mr. Halpin. It's been a highly profitable business. You own the business with Ms. Keane. You won't be destitute because you've got a large cash pile in the company; isn't that right?
A. For a family of four, a large cash pile with no home to go to, I don't see that as a large cash pile." (day 3, page 31).
461. Another topic addressed in cross-examination concerned a property in the State of New Jersey in the US which is held (at least partly) in trust for his children. He confirmed that he was formerly the 49% owner of the property in question which was valued in 2018 at 591,000 (it was put to him in cross-examination that the current value is significantly higher, a proposition he rejected). Mr Halpin's evidence was that there was a mortgage over that property and that his sister had an interest in it.
462. Under cross-examination by counsel for Stairway, he agreed with the following propositions:
" Q. Right. So, Mr. Halpin, you'd have to agree with me, though, that it's a substantial and a valuable property which exists for the benefit of your children?
A. Yes
....
Well, Mr. Halpin, I just simply suggest to you that this is a property that at one time was described as a property that you owned. It now seems to be beyond the reach of your creditors. And you accept that it's a valuable property which exists for the benefit of your children; isn't that right?
A. (WITNESS NODS)." (day 3, page 43)
463. There was the following exchange in relation to monies held in an account of a company which he had formed on 17 November 2023, Kermode Limited. He gave evidence that the balance in that account was approximately 200,000 and confirmed that he had not mentioned this is in direct evidence:
"Q. 200,000, right. You didn't mention that in your evidence yesterday, Mr. Halpin?
A. Sorry?
Q. You didn't mention that in your evidence yesterday, did you?
A. I didn't provide any financial statement yesterday to the court.
Q. Mr. Halpin, now, come on. You came in here playing the poor mouth and forgot to mention that there is a company that you established --
A. I mean --
Q. No, no, bear with me now -- a company that you established in the last year that has about 200,000 in it that you own and control?
A. That I own? I'm not the share -- I'm not the beneficiary of that.
Q. Oh, right. So who would control that company then, Mr. Halpin?
A. It's Ann Keane.
Q. Oh, right. But you're the company secretary and she's a director?
A. Yes." (day 3, page 45)
464. Mr Halpin stated (when re-examined) that the monies in the Kermode bank account were the same monies that were earned as retained profits by Madison and he stated that they were subject to taxation liabilities based on warehousing permitted during Covid, as well as being required for investment in the Property (day 3, page 102-103).
465. The evidence given by Mr Halpin in cross-examination also established that he had owned a second property on Park Avenue (No. 40) for 20 years, which was sold by a bank-appointed receiver not long before the hearing of these Proceedings. His evidence was to the effect that there was a debt secured on this property in the sum of 750,000, that this property was in a state of disrepair (including subsidence) and in need of investment (day 3 pages 45 to 56).
466. When questioned as to whether he could have renovated and moved into 40 Park Avenue at the time of the Prior Litigation (and specifically when the Receiver Possession Order was originally made in 2013), Mr Halpin referred to his health problems, the amount of work involved in such renovations, and the want of funds. On his evidence, he never contemplated renovating 40 Park Avenue and relocating with his family to reside there.
467. The failure to consider such a possibility does in my view cast a different light on Mr Halpin's evidence that his family now has no alternative but to reside at Aberdeen Lodge and nowhere else to go. His evidence about the want of funds to renovate 40 Park Avenue is also difficult to marry with his evidence that he was willing to and could pay up to 1.8 million for Aberdeen Lodge, of which at least 350,000 was (based on his evidence and the documentation presented at trial) to be obtained from family members.
468. In assessing Mr Halpin's evidence, I do make some allowance for possible memory lapses and inability to recall detail at a remove in time. However, even with these allowances, I cannot but regard his evidence-in-chief as less than complete in relation to his family's financial situation. He referred to his family being "destitute" if they lose possession of the Property, but failed to mention that approximately 200,000 is held in a bank account of a company controlled by Ms Keane or that his children have a beneficial interest in a substantial property in the US. Separately, the evidence that he and his family are "destitute" is difficult to reconcile with his evidence that he was able to pay up to 1.8 million to purchase the Property or with the pleading in the Constitutional Challenge that Mr Halpin and Ms Keane "will contend that they could have matched the purchase price agreed by the second defendant" (Ά35a).
469. In light of the background and facts of this matter and the evidence of Mr Halpin, I am not satisfied that public policy or common good would weigh in favour of the position of the Halpin Defendants, even if such matters could be invoked here (which I do not believe they can).
Conclusions
For the reasons given in this judgment:
(a) the Constitutional Challenge is dismissed and the orders sought are refused;
(b) Stairway is entitled to the orders sought at paragraphs 1, 2, 3, and 4 of the Plenary Summons in the Possession Proceedings (subject to the deletion of the reference to "beneficial" ownership in paragraph 1 and the correction of an identified error in paragraph 4); and
(c) The counterclaim in the Possession Proceedings is dismissed and the orders sought are refused.
I will list the matter before me at 10.30am on 30 April 2025.