Naughton v Governor and Company of the Bank of Ireland & Ors (Approved)

Factual and Procedural Background

This opinion concerns an application for costs in relation to an interlocutory injunction which has become moot. The Plaintiff initiated proceedings to restrain the second Defendant ("Mr. Anderson"), who had been appointed as Receiver of the first Defendant ("the Bank"), from being named as vendor in a contract for sale of the Plaintiff's properties. Initially, Mr. Anderson was a rent receiver without power of sale. An interlocutory order was granted on 24 July 2024 restraining Mr. Anderson from acting as vendor, which expired on 30 September 2024. Subsequently, on 20 November 2024, Mr. Anderson was formally appointed as agent of the Bank with authority to market and sell the properties. The Plaintiff accepts the interlocutory relief is now moot due to this appointment and seeks costs. The Defendants contest entitlement to costs, arguing the Plaintiff could never establish a fair question to be tried and delayed the application to frustrate an auction. The substantive issue is whether Mr. Anderson had power of sale as Receiver at the commencement of proceedings or only acquired it upon his later appointment as agent.

Legal Issues Presented

1. Whether the Receiver had a power of sale over the Plaintiff's properties at the time the proceedings and interlocutory injunction were issued.
2. Whether the interlocutory injunction application became moot following the subsequent appointment of the Receiver as agent of the Bank with power of sale.
3. Whether the Plaintiff is entitled to costs of the interlocutory application and the action, considering the mootness and the Defendants' arguments regarding delay and adequacy of damages.
4. The impact of the Plaintiff's delay on entitlement to equitable relief and costs.

Arguments of the Parties

Plaintiff's Arguments

• The interlocutory injunction became moot because Mr. Anderson was later appointed as agent of the Bank with authority to market and sell the properties.
• The initial deficiency in Mr. Anderson’s authority was cured unilaterally by the Defendants’ appointment of him as agent after proceedings began.
• On the basis of precedent in Cunningham v. President of the Circuit Court [2012] 3 I.R. 222, the Plaintiff is entitled to costs of the motion and the action.
• The Plaintiff contends that Mr. Anderson was only a rent receiver without power of sale at the time of the injunction application.
• The Plaintiff asserts trespass by Mr. Anderson entering possession unlawfully, supporting a claim for damages.

Defendants' Arguments

• The Plaintiff was never entitled to interlocutory relief as he could not establish a fair question to be tried.
• Damages were always an adequate remedy, making interlocutory injunction inappropriate.
• The Plaintiff deliberately delayed the application until the last possible moment to frustrate an online auction.
• Mr. Anderson was agent of the Bank prior to the formal appointment by deed on 20 November 2024, thus the proceedings were misconceived and should fail.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court examined the evidence to determine whether Mr. Anderson had authority as agent of the Bank at the time of the interlocutory injunction application. The Court found that the charges over the Plaintiff’s properties did not confer a power of sale on the Receiver, who was appointed solely as rent receiver by deed dated 28 September 2023. Documentary evidence, including the draft contract for sale and letters from Mr. Anderson, consistently described him as receiver without agency authority. The Court found the affidavit assertions that Mr. Anderson acted as agent prior to formal appointment to be contradictory and unsupported by corroborative evidence such as correspondence or formal agreements.

The Court noted the Plaintiff had no knowledge of any agency prior to service of the replying affidavit dated 28 November 2024, shortly before the hearing. The interlocutory injunction became moot due to the unilateral appointment of Mr. Anderson as agent of the Bank on 20 November 2024, conferring the requisite authority to market and contract for sale. The Court also addressed the alleged trespass by Mr. Anderson entering possession without lawful authority, concluding that the Plaintiff had a valid claim for damages for this historic trespass.

Regarding delay, the Court acknowledged the Plaintiff’s late application but found no basis to refuse costs on that ground, as the injunction was narrowly tailored and did not impede the Bank’s power of sale. The Court rejected the Defendants’ contention that the interlocutory relief was granted solely due to delay and found no evidence that the relief frustrated the Bank’s sale efforts. The Court emphasized the Plaintiff’s standing as registered owner to challenge the naming of the Receiver as vendor and to seek protection against trespass and slander of title.

Holding and Implications

The Court held that the interlocutory injunction application became moot due to the Defendants’ unilateral appointment of Mr. Anderson as agent of the Bank with authority to market and sell the properties from 20 November 2024. Consequently, the Plaintiff is entitled to the costs of the interlocutory application and the action.

The Court awarded costs of the action to the Plaintiff despite the Plaintiff’s indication that the action will be discontinued, noting that the Plaintiff had a valid claim for damages arising from the Receiver’s unlawful entry onto the property. The Court found no basis to refuse costs on the ground of delay.

No new legal precedent was established; the decision applies existing principles regarding interlocutory injunctions, mootness, costs entitlement, and evidentiary standards for agency authority.