Shawl Property v. Malone

Factual and Procedural Background

In 2005, the First Defendant borrowed over €8 million to purchase a portfolio of eight residential properties in south Dublin, including two houses at locations referred to as Blackacre and Whiteacre. The First Defendant defaulted on the loan, and in 2018, following an assignment of the loan and security, the two houses were sold to the Plaintiff. The First Defendant had been adjudicated bankrupt and later discharged. Approximately three months after the sale, the First Defendant forcibly entered the properties, changed the locks, and asserted ownership claims for himself and/or the Second Defendant, who is his former life partner. The Defendants counterclaimed for a declaration that the properties belong to them, despite not having paid for them.

The Plaintiff initiated proceedings seeking permanent injunctions to restrain trespass by the Defendants. The central procedural issue was whether the Defendants were entitled to insist that the Plaintiff’s action proceed to trial on oral evidence, or whether summary judgment was appropriate.

Prior to the sale to the Plaintiff, the loan was originally advanced by EBS Building Society with a first legal mortgage over the properties. After the First Defendant defaulted, possession orders were made in favor of EBS in 2009, and a receiver was appointed in 2010. EBS obtained judgment against the First Defendant in 2013. The loan and security were transferred to Beltany Property Finance DAC in 2017, which sold the two properties to the Plaintiff in 2018. The Defendants resisted possession and engaged in protracted litigation, including appeals and contempt proceedings, before ultimately vacating the properties, enabling the sale to the Plaintiff.

Following the Plaintiff’s possession, the Defendants repeatedly re-entered and changed locks on the properties, prompting interim injunctions restraining the Defendants from trespassing. The Plaintiff claims ownership and peaceful possession, while the Defendants deny the Plaintiff’s title and assert rights to the properties.

Legal Issues Presented

1. Whether the Defendants have an arguable defence to the Plaintiff’s claim for declaratory and injunctive relief.
2. Whether summary judgment is appropriate in an action seeking unliquidated damages and injunctions, rather than a trial on oral evidence.
3. The legal effect of the First Defendant’s bankruptcy on the loan facilities and ownership of the properties.
4. Whether the Defendants acquired an equitable interest or are estopped from denying the Plaintiff’s title.
5. Whether Beltany, as mortgagee, was entitled to sell the properties and whether possession by Beltany at the time of sale is relevant.
6. Whether formalities relating to the conveyances to the Plaintiff were properly observed and whether the Defendants can challenge those conveyances.
7. The validity of the Defendants’ counterclaim and whether it discloses any reasonable cause of action.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff claims full legal and beneficial ownership of the properties, acquired from Beltany in September 2018.
• The Plaintiff contends the Defendants have no estate, right, title or interest in the properties and seeks injunctions to restrain trespass and interference.
• The Plaintiff relies on established case law to support jurisdiction for summary judgment in claims for unliquidated relief.
• The Plaintiff denies any wrongdoing in possession or title, and asserts the Defendants’ claims are baseless and vexatious.
• The Plaintiff asserts that the Defendants’ counterclaim discloses no reasonable cause of action and is an abuse of process.

Defendants' Arguments

• The Defendants contend the First Defendant remains the legal and beneficial owner of the properties despite the sale.
• They argue the First Defendant’s bankruptcy extinguished the loan facilities, invalidating the transfer to Beltany.
• The Defendants claim Beltany was estopped from selling the properties due to representations about acceptable purchase prices.
• They dispute Beltany’s entitlement to sell as mortgagee in possession and question whether Beltany was in possession at the time of sale.
• The Defendants raise technical challenges to the execution and registration of the conveyances.
• The Defendants allege a campaign of intimidation and malicious conduct by the Plaintiff and deny responsibility for any damage to the properties.
• The Defendants argue for a full trial and contend their consent to interlocutory orders was conditional on that.
• The Defendants claim breach of privacy and data protection laws arising from the Plaintiff’s use of an unredacted judgment in proceedings.
• The Defendants suggest the Plaintiff’s litigation funding is questionable and imply maintenance.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the factual background and the uncontested nature of most facts, focusing on the material disputes. The court considered the First Defendant’s bankruptcy and rejected the argument that it extinguished the loan facilities or invalidated the transfer to Beltany. The court found the Defendants’ claim that the transfer was invalid due to non-disclosure in bankruptcy proceedings to be a mere unsupported assertion.

Regarding the Defendants’ claim of equitable interest or estoppel, the court found no credible basis. The alleged representations by Beltany about acceptable purchase prices did not amount to an equitable interest or estoppel, especially as the Defendants never agreed to pay the purported sums or made any offer to purchase.

The court addressed the argument about possession by Beltany at the time of sale, holding that the statutory power of sale does not require the mortgagee to be in possession. The relevant statutory provisions protect purchasers from title challenges based on irregularities in the exercise of the power of sale. Therefore, whether Beltany was in possession was irrelevant to the validity of the sale.

On the formalities of the conveyances, the court accepted that the Defendants, as strangers to the conveyances, had no standing to challenge the execution, registration, or formalities of the deeds. The court relied on precedent that a purchaser is entitled to rely on the regularity of title documents.

The court found the Defendants’ allegations of a malicious campaign to be unsupported and irrelevant to the legal issues. It rejected their complaints about privacy breaches arising from the Plaintiff’s use of an unredacted judgment, concluding the Plaintiff bore no responsibility for its possession of that document and that the complaint was without substance.

Finally, the court applied the well-established test for summary judgment, emphasizing the low threshold for allowing a defendant to defend and the necessity for a defence to have substance. The court found the Defendants had no arguable defence and that the only factual dispute (whether Beltany was in possession at the time of sale) was immaterial to the legal validity of the sale and could not justify a trial.

The court also applied principles governing strike-out motions and concluded that the Defendants’ counterclaim disclosed no reasonable cause of action, was frivolous and vexatious, and should be dismissed.

Holding and Implications

The court GRANTED SUMMARY JUDGMENT in favor of the Plaintiff on its claims for declaratory and injunctive relief, declaring that the Defendants have no estate, right, title, or interest in the properties at Blackacre and Whiteacre. The court issued a permanent injunction restraining the Defendants, their agents, and others with notice from trespassing or interfering with the properties.

The Defendants’ counterclaim was struck out as frivolous, vexatious, and disclosing no reasonable cause of action.

The decision directly resolves the dispute between the parties, confirming the Plaintiff’s ownership and right to possession. No new legal precedent was established beyond the application of existing principles regarding summary judgment, mortgagee sales, and strike-out jurisdiction.