The Foy Principle: Transparency in Redemption Accounting and Familial Attachment as Decisive Factors in Receiver Injunctions

1. Introduction

Foy v O'Connor & BCM Global ASI Ltd ([2025] IEHC 422) is a High Court decision delivered by Ms Justice Nessa Cahill on 23 July 2025. The Plaintiff, John Foy, sought an interlocutory injunction to prevent the appointed receiver, David O’Connor, and the charge-holder, BCM Global ASI Ltd, from marketing or selling a long-standing family property in Mullingar pending trial. The core dispute centred on three issues:

Whether the proceeds of sale and rental income from another property (Parkcourt) had been fully and correctly credited to Mr Foy’s loan account;
Whether the redemption figure of €652,923 furnished by BCM was accurate and transparent; and
Whether the balance of justice favoured preserving a 120-year familial and emotional nexus to the Property over the receiver’s power of sale.

The Court granted the injunction, thereby creating what this commentary terms “the Foy Principle”: in mortgage enforcement scenarios, a mortgagee who withholds a clear accounting of redemption figures risks an interlocutory injunction—especially where the mortgaged property carries demonstrable familial or emotional significance, notwithstanding its commercial use.

2. Summary of the Judgment

Justice Cahill applied the two-stage Merck Sharp & Dohme (“MSD”) test:

Serious Issue to be Tried – The Plaintiff was found to have raised fair and non-vexatious issues concerning (i) unaccounted rents, (ii) unexplained deductions from the €600,000 Parkcourt sale, and (iii) opaque additional charges that inflated the redemption figure by €145,000.
Balance of Justice – The Court weighed (a) Mr Foy’s inter-generational attachment to the Property and (b) his right to exercise the equity of redemption, against (c) BCM’s purely financial interest in enforcing security. Damages were deemed an inadequate remedy for the Plaintiff; by contrast, the Defendants’ interests could be protected by an undertaking in damages.

Accordingly, an interlocutory injunction restraining any marketing or sale of the Property was granted, with liberty to apply should full accounts later be produced or circumstances materially change.

3. Analysis

3.1 Precedents Cited and Their Influence

Merck Sharp & Dohme v Clonmel Healthcare [2019] IESC 65 – Provided the modern two-fold test for interlocutory injunctions (serious issue + balance of justice). Justice Cahill meticulously followed this framework.
Betty Martin Financial Services Ltd v ESB DAC [2019] IECA 327 – Confirmed emotional/familial stakes can tilt the balance in favour of injunctions. The Court relied on this to recognise the 120-year family connection.
Ryan v Dengrove DAC [2021] IECA 38 – Emphasised injunctions are “exceptional” in purely commercial disputes. Justice Cahill distinguished Foy because the property here was not purely commercial.
Ewins v Promontoria Scariff DAC [2024] IEHC 556 – Receiver injunction refused where equity of redemption had allegedly already been exercised. The Court found that Ewins actually supported Mr Foy because there was a live dispute over the correctness of the redemption figure.
Allied Irish Banks plc v Diamond, Dellway Investments v NAMA, Camden Street Investments Ltd v Vanguard, Kinsella v Wallace, O’Gara v Ulster Bank – Cited to illustrate the spectrum of circumstances where equity of redemption and property rights are accorded varying weight. Justice Cahill synthesised these cases to justify greater protection where emotional factors exist.

3.2 Legal Reasoning

a) Serious Issue to be Tried

The Plaintiff produced prima facie evidence that rent of c. €250,000 was never credited and that only €450,000 of the €600,000 Parkcourt sale was applied, leaving €150,000 unaccounted.
The Defendants failed to rebut those figures with sworn evidence or provide mandatory notice under s.103 LCLRA 2009.
Thus there was a “fair issue” regarding breach of accounting duties and potential clog on the equity of redemption.

b) Balance of Justice

Inadequacy of Damages – Loss of a 120-year family hub cannot be compensated in money alone.
Defendants’ Interests – Entirely financial; capable of being deferred and protected by Plaintiff’s undertaking.
Proportionality – An injunction merely preserves the status quo; if proper accounts are later provided, the receiver may re-apply.
Prospect of a Permanent Injunction – While the validity of the receiver’s appointment is unquestioned, refusal to supply transparent figures could, at trial, justify permanent restraint. Hence the interim order was not futile.

c) Statutory Considerations

Section 103(1)–(3) Land and Conveyancing Law Reform Act 2009 imposes strict duties on a mortgagee to obtain best price and serve a completion notice. Non-compliance is an offence and was a live allegation.

3.3 Impact of the Judgment

The decision is likely to resonate in three significant ways:

Enhanced Disclosure Obligations for Mortgagees – Charge-holders and receivers must anticipate injunctions where redemption figures are opaque. Providing a bare number will no longer suffice; a granular account is essential.
Familial/Emotional Nexus Elevated – Even where property is formally “commercial,” demonstrable heritage or emotional ties can move it into a quasi-residential category for interim relief purposes.
Strategic Litigation Guidance – Borrowers now have a roadmap: target lack of accounting plus sentimental attachment; mortgagees have a counter-roadmap: front-load evidence and serve statutory notices promptly.

4. Complex Concepts Simplified

Interlocutory Injunction – A temporary court order, granted early in proceedings, to preserve the status quo until the case is fully tried.
Equity of Redemption – The borrower’s right to clear the mortgage and regain unencumbered title; survives even after default until legally extinguished.
Clog on the Equity – Any device or condition that unfairly hinders a borrower’s ability to redeem (e.g., hidden fees or unexplained charges).
Receiver – A person appointed by a secured lender to collect income or sell secured assets.
Balance of Justice – Modern Irish shorthand for weighing all circumstances to decide whether an interim injunction is fair pending trial.
Section 103 LCLRA 2009 – Statute obliging mortgagees to (i) achieve best price and (ii) notify mortgagor within 28 days of sale, with criminal sanctions for default.

5. Conclusion

Foy v O’Connor crafts a notable refinement in Irish mortgage litigation:

A mortgagee who offers no transparent breakdown of redemption figures may be restrained from selling, notwithstanding otherwise valid security and appointment.
Family legacy and emotional investment can convert a seemingly commercial property into one deserving of home-like protection for injunction purposes.
The ruling underlines that Section 103 LCLRA 2009 is not a paper tiger; non-compliance tangibly affects interim relief outcomes.

In essence, the Foy Principle mandates “show your maths or pause your sale”: until full accounting is produced, the balance of justice may tip decisively in favour of borrowers whose livelihoods and heritage intertwine with the mortgaged asset.