Clarke v Pepper Finance (IEHC 564, 2025): Absence of Vehicular Access Is Not “Landlock”; Receivers Must Market “Warts and All,” and Borrowers’ Undertakings in Investment Property Cases Will Be Strictly Scrutinised

Introduction

In Clarke & Anor v Pepper Finance Corporation (Ireland) DAC & Anor [2025] IEHC 564, the High Court (Cregan J) refused an interlocutory injunction sought by borrowers to restrain a receiver’s sale of a mortgaged property known as The Cottage, Moone, Co Kildare (Folio KE10478F). The judgment addresses a familiar set of challenges to receivership sales—power to appoint, power of sale, validity of appointment, title transfer, and notice of assignment—while also engaging with a fact-sensitive allegation that the property was “landlocked.”

The decision crystallises three important themes. First, the court restates and applies the Merck Sharp & Dohme v Clonmel Healthcare framework for interlocutory relief, emphasising the primacy of adequacy of damages and the need for real evidence behind undertakings as to damages. Second, it confirms that minor misdescriptions in appointment documentation (e.g., a missing letter in a folio reference) are not fatal where the charged asset is otherwise clearly identified in the mortgage. Third, it clarifies the practical treatment of access issues: a property that abuts a public road but lacks a formed entrance is not “landlocked”; rather, the receiver must market the property “warts and all,” expressly disclosing the need for planning permission to create vehicular access.

The plaintiffs, Thomas and Catherine Clarke, had defaulted on a €400,000 loan (advanced in 2007 by Leeds Building Society and later acquired by Pepper), with arrears of €134,436 and a total balance of €538,231 as of December 3, 2024. Pepper appointed a receiver on the same date. Following an initial round of interlocutory skirmishing—during which undertakings not to sell were given and later lifted due to the plaintiffs’ non-compliance with directions—the plaintiffs issued a second motion seeking interlocutory relief. The court heard extensive argument and directed expert mapping on the “landlocked” point before resolving the matter.

Summary of the Judgment

The High Court refused the interlocutory injunction. The plaintiffs failed to raise any fair question to be tried on any of their pleaded grounds.
The court accepted that the receiver was validly appointed and had the power of sale under the mortgage conditions (conditions 14.5 and 15.2).
The register showed Pepper as owner of the charge; under s.31(1) of the Registration of Titles Act 1964 and authorities including Tanager DAC v Kane and Bank of Ireland v Cody, this is conclusive as to title.
A minor misdescription in the deed of appointment (a missing “F” in the folio number) was not fatal, consistent with McCarthy v Langan and Casey v Everyday Finance DAC.
A combined notice of assignment and demand letter satisfied s.28(6) of the Supreme Court of Judicature (Ireland) Act 1877, following Promontoria Oyster DAC v Lynn.
The property was not “landlocked” in law: it abuts the public road. However, there is currently no formal vehicular entrance; any purchaser must obtain planning permission to form access. The receiver must market the property with clear disclosure of this constraint.
Alleged trespass by the defendants occurred, if at all, on adjoining partnership lands not in issue; any remedy would be for the partnership in separate proceedings and could not ground an injunction restraining sale of the charged property.
On the balance of justice, the property was an investment (derelict bungalow), not a family home; damages would be adequate; and the plaintiffs’ undertaking as to damages was unsupported by evidence and thus illusory. The court followed Ryan v Promontoria on these factors.

Detailed Analysis

Precedents Cited and Their Role

Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd [2019] IESC

The court adopted O’Donnell J’s structured approach to interlocutory injunctions. The steps include: (1) whether a permanent injunction could be granted at trial; (2) whether there is a fair question to be tried; (3) how best to maintain the status quo pending trial, focusing on the balance of convenience/justice; and (4) the centrality of adequacy of damages, with robust scepticism in commercial cases. This framework underpinned the judge’s sequential analysis: having found no fair issue to be tried, he nonetheless assessed balance of justice, adequacy of damages, and undertaking.

Tanager DAC v Kane [2019] 1 IR 385; Bank of Ireland v Cody [2021] 2 IR 381

These authorities reaffirm that the Land Registry is conclusive evidence of registered title under s.31(1) of the 1964 Act. The court relied on these to reject the plaintiffs’ contention that Pepper lacked an interest in the 2007 mortgage: Pepper was registered as owner of the charge; that registration is conclusive against collateral attack in these proceedings.

McCarthy v Langan [2019] IEHC 67651; Casey v Everyday Finance DAC [2021] IEHC 167

Both cases address defects or omissions in the description of secured property within a deed of appointment. Allen J in McCarthy held that the absence of a property description in the deed of appointment is not fatal where the secured property is identified in the underlying deed of charge and the appointment is expressly made over the charged assets. Casey goes further: even if the property is not described at all in the appointment, validity can still subsist by reference to the charge. Cregan J applied these authorities to conclude that the missing “F” in the folio reference (10478 vs 10478F) did not invalidate the receiver’s appointment.

Promontoria Oyster DAC v Lynn [2020] IEHC 1999

Simons J held there is no conceptual problem with a single document serving both as notice of assignment and as a demand letter under s.28(6) of the 1877 Act. The High Court followed this, holding that Pepper’s demand letter, which expressly notified the assignment by deed of November 16, 2018, satisfied the statutory requirement.

Ryan v Promontoria [2025] IEHC 362

Dignam J refused an injunction restraining enforcement over an investment property, emphasising (a) the investment nature of the asset (not a family home), (b) the inadequacy or absence of a credible undertaking as to damages, and (c) the adequacy of damages at trial. Cregan J cited and applied the same triad to conclude that the balance of justice favoured refusing relief.

Legal Reasoning: Application of Principles to the Ten Issues and the Injunction Test

1) Power to appoint a receiver

The mortgage conditions (condition 14.5) expressly conferred the lender’s power to appoint a receiver. The plaintiffs’ argument to the contrary was dismissed as insubstantial.

2) Receiver’s power of sale

Condition 15.2 allowed a receiver to exercise the lender’s rights under condition 14.5, which included a power of sale. The “rent receiver only” suggestion was rejected; the instrument clearly contemplated a sale power.

3) Validity of appointment upon default

Affidavit evidence (O’Dwyer, 11 March 2025) established defaults in monthly repayments, triggering acceleration (para 2(b) of the mortgage, para 3.1(b) and 14.4(a) of the conditions). Demands issued on December 3, 2024; the entire debt became due; the receiver was then appointed under condition 14.5. No fair issue arose.

4) Lender’s title: Pepper’s interest in the 2007 mortgage

Leeds Building Society transferred the loan and mortgage to Pepper on November 16, 2018; Pepper is registered on the folio as owner of the charge. By s.31(1) of the 1964 Act and authorities, the registry entry is conclusive. No fair issue to be tried.

5) Misdescription in the deed of appointment (10478 vs 10478F)

The mortgage schedule referred to Folio 10478F; the appointment schedule referred to Folio 10478 (missing “F”). The court held that the property charged and the property appointed over were the same—the bungalow at Timolin, Moone—and, following McCarthy and Casey, a description defect in the appointment does not invalidate it where the charge identifies the asset. The omission was immaterial.

6) “Rent receiver only” argument

Rejected on the wording of the mortgage conditions; the receiver had the power of sale.

7) Notice of assignment and s.28(6) of the 1877 Act

The written demand explicitly notified the assignment to Pepper. Under Promontoria Oyster v Lynn, notice and demand may be combined. The court held the statutory requirement was met; no fair issue to be tried.

8) Alleged forged signature (broker’s application form)

The alleged forgery on a mortgage broker’s application form (Morrin Mortgages) was irrelevant: the defendants were strangers to that document; the plaintiffs had in fact received and used the loan and executed the mortgage. This allegation did not bear on the validity of the security or the receiver’s sale and did not raise a serious issue to be tried at interlocutory stage.

9) “Landlocked” claim and access

Expert mapping obtained by both sides showed the charged property abuts the public road; there is no intervening “sliver” of third-party land between the site and the roadway. Accordingly, the property is not landlocked in the legal sense. However, there is no formed vehicular entrance; any purchaser would need planning permission to create a gate/entrance. The current vehicular access appears to exist over adjacent partnership lands, not part of the mortgaged property. The court directed that the receiver must transparently advertise the property subject to the need for planning permission for a vehicular entrance. Arguments about easements of necessity or implied rights of way were deemed speculative and academic for present purposes.

10) Alleged trespass on adjoining lands

Even if trespasses occurred on adjoining partnership lands, any cause of action lies with the partnership as a separate legal entity. Such allegations could not justify an injunction restraining the sale of the charged property in these proceedings.

Serious issue to be tried

Having addressed each pleaded ground, the court concluded that none raised a fair question to be tried. This independently warranted refusal of interlocutory relief.

Balance of justice and adequacy of damages

The court nonetheless considered the balance of justice, guided by Merck and Ryan v Promontoria:

Nature of the asset: The property is an investment/derelict bungalow, not a family home. This weighed significantly against granting an injunction.
Undertaking as to damages: The plaintiffs offered an undertaking but adduced no evidence of means to support it. Given the substantial arrears and absence of bona fide repayment efforts, the undertaking was “without substance.” Courts must be sceptical of undertakings in commercial/investment contexts without credible evidence.
Adequacy of damages: If the plaintiffs ultimately succeeded, damages would be an adequate remedy and, in any event, any award would be set off against the very substantial debt owing.

On these factors, the balance of justice firmly favoured refusal of the injunction.

Impact and Likely Significance

Interlocutory injunctions against receiver sales of investment properties: The decision deepens a trend of strict scrutiny. Where the property is not a family home, undertakings unsupported by evidence of means will be treated as illusory, and damages will generally be adequate.
Access constraints and “landlocked” claims: The court draws a practical-legal distinction. A property that touches a public road is not “landlocked” merely because it lacks a formed entrance. The appropriate remedy is accurate marketing disclosure and, where necessary, purchaser planning applications—rather than restraining sales. Expect receivers to adopt standard-form disclosures in similar cases.
Minor documentation defects: The court affirms that minor misdescriptions in appointment deeds (e.g., folio labels) do not invalidate appointments where the charged asset is clearly identified by reference to the underlying mortgage. This reduces the tactical force of hyper-technical challenges.
Notice of assignment practice: Combining notice of assignment with a demand letter remains sound, and courts will accept such composite notices as meeting s.28(6) requirements.
Procedural discipline: Borrowers who obtain interim undertakings but fail to comply with directions risk losing the protection of those undertakings. The court will not countenance delay or tactical use of interlocutory relief.
Damages and set-off: Even if borrowers later succeed on some claim, any damages will likely be set off against the outstanding debt, which further undermines the case for interlocutory restraint where the asset is an investment property.

Complex Concepts Simplified

Interlocutory injunction: A temporary court order preserving the position until trial. Courts ask: Is there a fair issue to be tried? Where does the balance of justice lie? Are damages adequate? Can the plaintiff give a meaningful undertaking to compensate the defendant if the injunction is later found unjustified?
Undertaking as to damages: A promise by the applicant to compensate the respondent for losses caused by the injunction if it proves unwarranted. In practice, courts look for evidence that the applicant can actually pay—especially in commercial or investment disputes.
Receiver and power of sale: A receiver is appointed under a mortgage/charge to take control of the secured asset and, typically, to sell it to repay the debt. The powers are set by the mortgage conditions; a “rent receiver” collects income only, whereas a receiver with sale powers can sell the asset.
Acceleration clause: A term allowing the lender, upon specified defaults (e.g., missing repayments), to declare the entire loan immediately due.
Land Registry and folios: In Ireland’s registration of title system, each property is in a numbered folio. The Register is conclusive evidence of title; minor errors in ancillary documents do not override what the Register shows.
“Landlocked” vs lack of entrance: A property is “landlocked” when it has no legal access to a public road. A property that abuts a public road but lacks a formed entrance is not landlocked; access can be created (subject to planning). This distinction matters for whether a receiver can sell and on what terms.
Easement of necessity/implied right of way: Legal doctrines that may provide access where land would otherwise be useless without it. The court treated arguments on implied easements as speculative on the pleaded facts, preferring disclosure plus planning as the realistic solution.
Notice of assignment (s.28(6) of the 1877 Act): When a debt is assigned, written notice to the debtor is required. Courts accept that such notice may appear within a demand letter provided it is clear and explicit.

Conclusion

Clarke v Pepper Finance reaffirms a disciplined, merit-focused approach to interlocutory injunctions in receivership contexts—particularly where the asset is an investment property. The court found no fair issue to be tried on any of the borrowers’ multiple challenges: the receiver’s appointment and sale power were sound; Pepper’s title was conclusively shown by the Register; a folio misdescription in the appointment deed was immaterial; combined notice and demand satisfied the 1877 Act; and ancillary allegations (a forged broker form; trespass on adjoining lands) did not engage the propriety of the sale.

On the balance of justice, three factors—investment property status, inadequacy of the plaintiffs’ undertaking as to damages, and the adequacy of damages at trial—compelled refusal of relief. The judgment also offers practical clarity on access issues: a site that abuts a public road but lacks a formed entrance is not “landlocked.” Receivers can proceed to sale, but must market “warts and all,” expressly disclosing the need for planning permission for vehicular access.

The key takeaways for practice are clear. Borrowers must present evidence-backed undertakings and real merits; hyper-technical drafting points will rarely suffice. Receivers should ensure meticulous, transparent marketing, especially where physical or planning constraints exist. As a precedent, Clarke reinforces the robust post-Merck posture of the Irish courts: minimise injustice, ensure candour in sale processes, and resist interlocutory restraint where damages and set-off provide adequate ultimate remedies.