Irish Court of Appeal

THE COURT OF APPEAL

CIVIL

Neutral Citation Number; [2025] IECA 31

Appeal Number: 2024/223

           

 

Allen J.

Meenan J.

Hyland J.

 

 

BETWEEN/

OSSORY ROAD ENTERPRISE PARK LIMITED

PLAINTIFF/RESPONDENT

- AND –

 

DECLAN ROGERS, TOM HARTY

AND

ROGERS RECYCLING LIMITED

DEFENDANTS/APPELLANTS

 

EX TEMPORE JUDGMENT of Mr. Justice Allen delivered on the 7^th day of February, 2025

 

Introduction

1.                  This is an appeal by  Mr. Declan Rogers and Rogers Recycling Limited ("the appellants") against the judgment and order of the High Court (Oisín Quinn J.) delivered and made on 31^st July, 2024 ([2024] IEHC 483) by which the appellants were permanently injuncted from interfering with or demanding payment of money from the occupiers of a number of industrial units at Ossory Road, Dublin 3 which were formerly owned by Mr. Rogers but are now owned by Ossory Road Enterprise Park Limited ("the respondent") and by which the appellants was ordered to pay €150,000 damages for trespass and the costs of the action, to be adjudicated on a legal practitioner and own client basis.

2.                  Although a Mr. Tom Harty was named as a defendant, the summons was never served on him.

Background

3.                  The units were purchased by Mr. Rogers in the 1990s and mortgaged to Allied Irish Banks plc ("AIB") by deed dated 13^th January, 2005 to secure repayment of various loans.  Mr. Rogers defaulted in payment and on 20^th February, 2016 AIB appointed a receiver.  On 17^th January, 2020 AIB assigned the loans and security to Everyday Finance DAC ("Everyday").  Mr. Rogers failed to pay anything to Everyday but continued to collect the rents and otherwise to manage the units.

4.                  On 9^th April, 2021 Everyday put the properties up for online auction on the BidX1 platform.  The properties were offered for sale as a job lot, "warts and all" and with Mr. Rogers in possession.  They were then knocked down for €1.424 million but the highest bidder soon after pulled out.

5.                  A second auction was held on 17^th September, 2021 at which there were no bids, and a third on 24^th September, 2021 at which the properties were knocked down to the consortium behind the respondent for €1.251 million.  The sale and purchase was completed on 6^th December, 2021 and the respondent moved promptly to restrain Mr. Rogers from interfering with the properties, specifically, by continuing to collect the rents.  On 8^th April, 2022, the High Court (Stack J.) made an interlocutory order restraining Mr. Rogers from collecting the rents.

6.                  Along the way, Mr. Rogers alleged that he had let one of the units to a company controlled by him, Rogers Recycling Limited, and Rogers Recycling was joined as a defendant.  On 7^th October, 2022 the interlocutory orders were extended to Rogers Recycling.

7.                  The action eventually came on for trial before the High Court in July, 2024 and was heard by Quinn J. over seven days.

The High Court judgment

8.                  The judgement of the High Court now under appeal identified four issues: (i) the title to the property, (ii) the alleged conspiracy, (iii) the alleged leasehold interest of Rogers Recycling, and (iv) damages.

The title to the properties

9.                  In his defence and counterclaim, Mr. Rogers challenged OREP's title to the properties.  The substance of that challenge - if substance is the mot juste – was that the assurance by Everyday to OREP was not a conveyance of the freehold but only an assignment, for only 10,000 years.  At the trial of the action the respondent went through the hoops of proving its title.  By then, the technical wrinkle in the original assurance had been ironed out by a deed of rectification. The trial judge found that OREP held the fee simple in possession and there is no appeal against that finding.

The alleged conspiracy

10.              The foundation for the alleged conspiracy was an allegation that the underbidder at the first action - a Mr. Robert Healy, who had then bid €1.413 million - had been deliberately excluded from the later negotiations and auctions.  Mr. Healy's bid at the first auction was obviously greater than the €1.251 million eventually paid by OREP.

11.              The case pleaded by Mr. Rogers in defence to OREP's claim and in support of his counterclaim for a declaration that the sale to OREP was contrary to s. 103 of the Land and Conveyancing Law Reform Act, 2009 and null and void and of no effect, was that there had been a conspiracy between Everyday, the receiver, the consortium, and the respondent to exclude Mr. Healy from the negotiations or later auctions which resulted in the sale to the respondent.  The price paid by OREP - €1.251 million - was less than the price previously bid by Mr. Healy - €1.413 million.  Mr. Rogers' core argument was that if Mr. Healy had not been deliberately excluded and been informed that the property was back on the market, he would have paid the same price as he had bid in April, 2021.

12.              Section 103 of the Act of 2009 imposes a duty on the mortgagee, in the exercise of a power of sale, to ensure as far as is reasonably practicable that the mortgaged property is sold at the best price reasonably obtainable.  That is a duty imposed on the mortgagee.  In principle, there is no obligation on the purchaser of a mortgaged property to justify the price paid.  However, by the allegation of conspiracy, the appellants sought to fix the respondent with knowledge of, and what were alleged to be the consequences of, a sale by Everyday at a price which was said to be less than the best price reasonably obtainable.  It is not necessary for present purposes to contemplate how Mr. Rogers might have hoped to set aside the sale by Everyday by an action to which Everyday was not party.

13.              Incidentally, all of the bids for the properties were a fraction of the secured debt so that the immediate effect of a sale at a lower price than might have been achieved was a loss to Everyday, but for present purposes that is not material either.

14.              No evidence was called on behalf of Mr. Rogers to support the pleaded case.   In his cross examination of the witnesses called on behalf of the respondent, counsel for the appellants suggested that the underbidder at the auction on 9^th April, 2021 had been deliberately excluded from the later negotiations and auctions.  They all denied it.  The judgement records that Mr. Thomas O'Dowd, the witness from BidX1 who was responsible for the sale, made the point that the auctioneer's commission depended on the price achieved, so that it would have made no sense that BidX1 would have done anything to supress the price.  If the witness from Everyday did not make the same point, it made no sense that Everyday would have supressed the price, not least in circumstances in which the immediate loser would have been Everyday itself.  There was no suggestion that Mr. Rogers was being pursued for - or had any intention of paying - the balance of the debt.  The judge found that there was no credible evidence of the alleged conspiracy and no explanation or theory advanced as to why BidX1 and Everyday might have conspired to damage their own interest by reducing the field of bidders.

15.              There is no appeal against any of the judge's findings of fact in relation to the alleged conspiracy.

The alleged leasehold interest of Rogers Recycling

16.              The case made by Rogers Recycling Limited was that it had a lease on one of the units - Unit No. 1 - for 21 years from 1^st July, 2012 at a rent of €300 per week from January, 2014.   In the ordinary way, there was a negative pledge in the mortgage but at the trial of the action Mr. Rogers produced a purported letter from AIB dated 10^th March, 2014 consenting to the lease. 

17.              The purported letter of 10^th March, 2014 was comprehensively demonstrated to have been a fabrication.  There is no appeal against any of the findings of fact on foot of which the judge came to the conclusion which he did.  Neither is there any appeal against the finding that the respondent was not bound by the purported lease.   Rather - as I will come to - the argument is that the judge could and should have gone no further than to say that the purported lease did not bind OREP because the purported consent post-dated the purported lease; and ignored the fact that it was a fabrication.

Damages

18.              The judge found that Mr. Rogers had wrongfully interfered with OREP's ownership rights from the beginning; that he had sought to ensure that the tenants and licensees would pay their rents and fees to him rather than OREP; and that by reason of those wrongful acts, OREP had been deprived of the income it otherwise would have derived from the properties.  The judge assessed damages for trespass at €150,000 and decreed both appellants in that sum. 

19.              There is no appeal against the award of damages for trespass or the findings of fact on which it was based.

The appeal

20.              By notice of appeal filed on 28^th August, 2024 the appellants appealed against the judgment and order of the High Court on 27 grounds.

21.              The proposition subtending the first four grounds is that, on the evidence, the respondent knew that the price which it paid was less - variously €162,000 less, and 13% less - than Mr. Healy's bid on 9^th April, 2021.  While the respondent in its written submissions contests this, it seems to me that, since the consortium behind the respondent had been a participant in the first auction, it probably was aware of the amount of Mr. Healy's bid and so - if it had done the sums - of the difference between Mr. Healy's bid and the price which it later paid.  However, the grounds of appeal asserted variously that the bargain struck by respondent in September, 2021 - and I use the word bargain in the sense of agreement rather than a good deal - was made "in knowing disregard of s. 103 of the Land and Conveyancing Law Reform Act, 2009" was "13% lighter than said s. 103 several bids of April, 2021" and was "fully €162,000 lighter than open market."

22.              The evidence established that by plenary summons issued on 13^th April, 2021 - hot on the heels of the first auction and the newspaper reports of the outcome - Mr. Rogers issued a plenary summons in which he named AIB, Everyday and the receiver as defendants, and registered those proceedings as a lis pendens.  If by reference to the particulars and conditions of sale, the April bidders had reason to believe that they might become embroiled in litigation with Mr. Rogers if they bought the properties, the September bidders must have known more or less for certain that they would.  As witness the fact that the highest bidder at the April auction pulled out, there was a difference between what was on offer in April and in September.

23.              That apart, the grounds of appeal and the appellants' written submissions simply ignore the fact that the trial judge found as a fact that there was simply no evidence of a conspiracy or of a "contrived monopsony" and did not even challenge, still less engage with, the correctness of that finding.

24.              The fifth ground of appeal is that the evidence of Mr. Healy that he was never contacted after April, 2021 by the mortgagee vendor "remained throughout unchallenged."  That is not so.  Mr. Healy's evidence was that he had not been contacted after the first auction.  The evidence of Mr. O'Dowd of BidX1 was that all of the bidders at the first auction had been or would have been contacted after the first sale fell through.  Counsel for the appellants sought to lead a hearsay account of a conversation between Mr. Healy and a BidX1 manager, but the judge ruled it inadmissible: and there is no appeal against that ruling.  To my eye, the judge did not definitively resolve the issue as to whether Mr. Healy had or had not been contacted but it was irrelevant.  Leaving to one side the fact that it would have made no commercial sense for Everyday or BidX1 to suppress the price, the issue as far as the parties to the proceedings were concerned was whether OREP was aware of any irregularity - if any - in the way in which the property was being sold.  The trial judge found as a fact that there was no evidence of any conspiracy and there is no appeal against that finding.

25.              The next ground characterises the evidence of Mr. Healy - that he had not been contacted after the April, 2021 auction - as evidence of his wilful exclusion.  All that Mr. Healy could say was that he had not, in fact, been contacted by anyone after the April, 2021 auction. Having heard the evidence of all those who were involved in the sale of the property to the respondent, the trial judge found that there was no evidence of any conspiracy.  If what is behind this ground of appeal is a suggestion that the trial judge erred in failing to infer from the fact that Mr. Healy was not contacted after the April, 2021 auction that Everyday, BidX1, the receiver and the respondent all conspired together to damage the commercial interests of Everyday and BidX1 by selling at a lower price than they all knew was readily and easily obtainable, and then erred in failing to find that such inference trumped all of the direct evidence which he had heard and accepted, it is fanciful.

26.              On the same analysis, I would reject the suggestion at Ground No. 7 that "mortgagee vendor in September 2021 signally ducked public advertisement ('not generally open to the public')" and Ground No. 8 "Mortgagee's August and September overtures were ever pointedly restricted."

27.              Ground No. 9 suggests that Mr. Healy's bid in April, 2021 was 19% higher that the respondent's - at that time the consortium's - bid at that time.  If what is behind this is the proposition that the gap between the bids was all the more reason why Mr. Healy should have been contacted after the sale fell through, I do not think that Mr. O'Dowd would have disagreed.  However, as far as the parties to the proceedings were concerned, the issue was not whether Mr. Healy had been contacted or not, or even whether Mr. Healy had been deliberately excluded from the process or not, but whether OREP was aware of the dealings between Everyday and BidX1 and anyone else.  The judge found that it was not so aware and there is no appeal against that finding.

28.              Grounds Nos. 10 to 13 suggest this way and that that the irresistible inference from the fact that the respondent's bid was accepted in September, 2021 was that Mr. Healy had been excluded.  For the reasons already given, I do not believe that any such inference could sensibly be drawn, still less that it was irresistible.  More to the point, all this talk of inference ignores the clear and careful reasoning of the trial judge and the findings of fact on which his conclusions were based.

29.              Grounds Nos. 14 to 23 are directed to the question of fraud.  If the grounds of appeal I have dealt with heretofore are clearly misconceived, what the appellants have to say about their effectively acknowledged fraud is truly astonishing.

30.              Part of the case made by the appellants in the High Court was that Unit 1 had been demised by Mr. Rogers to Rogers Recycling for a term of 21 years from 1^st July, 2012 at a rent of €300 per week from January, 2014 and that that lease had been granted - as required by the mortgage - with the consent in writing of the then mortgagee, AIB.   The appellants tendered in evidence a printed form of lease which provided for an annual rent of €24,000 payable by monthly instalments of €2,000, which had been overwritten in manuscript in the margin with the words "Jan 2014" and "300 per week from Jan 2014".  For the reasons given, the trial judge found that Mr. Rogers' evidence as to the execution of this purported lease was false: and there is no appeal against that finding.

31.              The appellants also tendered in evidence to the High Court a purported letter of consent from AIB dated 10^th March, 2014.  The trial judge found that it was - as it was - self-evident that the purported letter of consent post-dated the execution of the purported lease and went on to find - for the reasons set out over six pages - that the document had been fabricated.  There is no appeal against the finding that the appellants put into evidence a fabricated document.

32.              The first of the grounds in this group - Ground No. 14 - is that the judge permitted an allegation of fraud by the respondents, "although OREP had never made such case, still less advanced particulars of fraud distinctly required."  Absent a challenge to the findings of attempted fraud, what this boils down to is the proposition that the respondent was not entitled to challenge the fabricated document without having first anticipated the production of a fabricated document, and then identified and pleaded precisely the manner in which it proposed to demonstrate it to have been fabricated.  Unsurprisingly, no authority was cited in support of this proposition.   The fabricated documents were first provided to the respondent as exhibits to an affidavit of Mr. Rogers sworn on 28^th March, 2023 in response to a motion for attachment and committal for breach of the interlocutory orders which had been made by the High Court.  That was after the pleadings had closed.  Thus, the proposition is that because the respondent had not amended its pleadings, the appellants were entitled to adduce false evidence and fabricated documents.  That - not to put a tooth in it - is ridiculous.

33.              At the trial of the action, there was no objection by the appellants to the evidence given in examination in chief by Mr. Philip Foley, the AIB bank manager by whom the letter of 10^th March, 2014 had allegedly been signed; or to the cross-examination of Mr. Rogers by which his evidence was shown to have been false, and the purported letter of consent a forgery - and a poor one at that.  It is correct that a plaintiff whose case is based on fraud must clearly allege and particularise the alleged fraud.  But in this case, it was not the plaintiff's but the defendants' case which was based on fraud.

34.              It is said repeatedly, this way and that, that the trial judge readily let in testimony of fraud without any prior plea and - variously - that he admitted "testimony of fraud" and "irrelevant testimony of fraud" and "inadmissible opinion evidence by a non-expert."   This, I think, must all be directed to the evidence of Mr. Foley who in 2014 was a Credit Manager in AIB. 

35.              The case pleaded by the appellants was that the lease was entered at the suggestion of Mr. Foley and that he had signed a letter of consent on behalf of AIB.  The pleading did not specify the date of the alleged letter of consent. Mr. Foley was called on behalf of the respondent to say: "I didn't write it; I didn't sign it and I didn't author it."  In circumstances in which the appellants were relying on the letter I fail utterly to see how Mr. Foley's evidence - one way or the other - could be said to have been irrelevant.  Unsurprisingly, at the trial there was no objection to the relevance or admissibility of that evidence.  In oral argument, counsel for the appellants confirmed that the "opinion evidence" was the evidence of Mr. Foley that he was 99% sure that he had not written or signed the purported AIB letter of 10^th March, 2014.  That was not opinion evidence but evidence of Mr. Foley's direct recollection that he had not written or signed what had been introduced into evidence by Mr. Rogers.

36.              It is said - variously - that the judge "readily ran to make a finding of fraud" and "jumped to a finding of fraud".  By the way, it is perfectly clear the judge did not jump to any conclusion but reached the conclusions he did after a careful analysis of the evidence.  But what is striking is that there is no suggestion that the judge's conclusion - however he came to it - was wrong.

37.              Ground No. 22 is that the judge jumped to - or came to - a finding of fraud when it would have been sufficient to hold that any consent in writing by AIB Bank was, on any view, not prior in time to the lease and that on the timing issue alone, could not bind AIB or OREP.  What this boils down to is a proposition the judge should have ignored the false and fabricated evidence and contented himself to approach the case on the basis that the appellants pleaded and put up a case that until the recent changes in the Rules of the Superior Courts would have been characterised as frivolous and that their counterclaim ought to have been dismissed as frivolous rather than fraudulent.  Of course, it was never suggested to the judge that he should approach the case on that basis.

38.              I have not the slightest hesitation in rejecting this ground.  If - as the appellants' pleaded case was - Mr. Foley had suggested the creation of a lease and AIB had later - albeit after the granting of the lease - provided a letter of consent, there would surely have been an issue as to AIB's and Everyday's and OREP's entitlement to rely on the letter of the negative pledge by making the case that the consent in writing was not a prior consent.

39.              Grounds Nos. 24 to 27 are directed to the costs.

40.              It is first suggested that the trial judge ignored the prescriptions of the Mediation Act, 2017.  If what is behind this is that the respondent failed to file a mediation certificate, there is no suggestion that it would have made any difference.  The statutory requirement that a solicitor should discuss the possibility of medication before embarking on proceedings is a matter between the solicitor and his client, not the proposed defendant. It is not difficult to imagine what Mr. Stokes' reaction might have been if his solicitor had proposed that there should be a mediated discussion as to the terms on which Mr. Rogers might be permitted to continue to collect the rents.

41.              Next it is said that the trial judge "ignored proceedings wilfully precipitated but days from contract completion without letter before action."  The fact is that on completion OREP was the legal owner of the units, but Mr. Rogers was continuing to collect the rents; and he continued to do so after the proceedings were commenced and after the interlocutory orders were made enjoining him from doing so.  In circumstances in which the appellants refused to recognise the validity of the respondent's purchase of the properties and continued to collect money from the occupiers, the absence of a letter before action is neither here nor there.

42.              The final point is that the judge is said to have erred in awarding the respondent costs to be adjudicated on a legal practitioner and own client basis, rather than on the usual party and party basis.  It is acknowledged that among the circumstances in which costs may be ordered on a legal practitioner and own client basis are cases in which there has been a breach of trust or a breach of fiduciary duty.  In this case - it is said - "the alleged breach of statutory fiduciary duties, exercise of power of sale by mortgagee, if any, and knowing capital gain by OREP, was entirely the other way."  What appears to be behind this is the proposition that the judge ought not to have awarded legal practitioner and own client costs because the appellants ought to have won.  But the appellants did not win.  And the reason the judge awarded costs on the higher level was to mark the court's displeasure at the fact that the appellant's defence to the action and counterclaim was grounded on false evidence and fabricated documents.

43.              All that is said in the appellants' written submissions in relation to the costs order is:-

"17.  Excesses in costs all round"

44.              There is not a single word under what appears to be a subheading.

45.              The written submissions filed on behalf of the appellants clearly spell out - as is evident from the notice of appeal - that the appeal is not about any of the title issues or the alleged lease to Rogers Recycling.  What is decidedly less clear is what the appellants say the appeal is about.

46.              The appellants' argument - citing Holohan v. Friends Provident and Century Life Office [1966] I.R. 1 - is that a purchaser who is in fact on notice, actual or constructive, of an irregularity in the exercise of a power of sale before completion by conveyance could not get a good title.  The central issue on the appeal - it is said - is "whether Everyday and its privies ... arranged in secrecy or obscurity with OREP ... a bargain for sale designedly other than 'at the best price reasonably obtainable' in clear and high handed breach of that of s. 103."

47.              Well, it is not.  The issue in the action was whether there was a conspiracy to which OREP was party which might somehow have gone to the validity of the purchase of the property.  That was fought and lost in the High Court and there is no appeal against the findings of fact or reasoning on foot of which the action was lost.  It is not an issue on the appeal.

48.              Otherwise the written and oral submissions sought to rehearse the case pleaded without - to this day - positing any theory as to why Everyday and BidX1 would have conspired together to damage their own interests, never mind why they would have conspired with the respondent to take from the respondent a lesser price than was otherwise immediately available from Mr. Healy.  Being as charitable as I can, the appellants' submissions are rambling, entirely divorced from the findings, reasoning and conclusions of the judgment under appeal, and sprinkled with references to cases and bits of Latin in the hope that they will lend verisimilitude to what is said - which they do not.

49.              I have not the slightest hesitation in dismissing this appeal on all grounds.

Result:     Appeal Dismissed

 

[Meenan and Hyland JJ. agreed]