Court of Appeal refuses attempt by partner of borrower to frustrate repossession of property

In a judgment delivered by Mr. Justice Meenan on 21 February 2025 in Ooi -v- Ireland & Ors[1], the Court of Appeal dismissed an appeal of an Order of the High Court refusing an injunction to restrain the Sheriff from executing an Order for Possession of a property in which the Appellant resided. The judgment gives a good summary and analysis of the factors to be taken into account by the Court in considering an injunction application.

Background

The Appellant was the partner of the Third Named Respondent (Mr. McDonagh). Mr. McDonagh had a number of judgments obtained against him in the High Court, Court of Appeal and Supreme Court in respect of his default in his borrowings of very substantial sums of money from Ulster Bank and First Active plc, being the predecessors in title to Promontoria Scariff DAC (“Promontoria”). The property in question was Dromin House, Co. Wicklow (the “Property”) and was purchased by Mr. McDonagh in 2005 in his sole name with the benefit of a loan obtained from First Active in the amount of €3 million, which was in turn secured by way of mortgage over the Property. This loan was restructured in 2007 which resulted in Mr. McDonagh obtaining a further loan for a sum in excess of €5 million and this was secured by a second mortgage over the Property. Mr. McDonagh provided a Family Home Protection Act declaration that the Property was not a family home for the purposes of the Family Home Protection Act 1976 (the “Act”) and that no other person had an interest in the Property. No repayments had been made in respect of that mortgage since 2013, resulting in arrears of over €2 million being owed. The Appellant asserted that she moved into the Property with Mr. McDonagh in 2006.

Timeline leading to the appeal

• Promontoria obtained an Order for Possession (“OFP”) of the Property on 18 January 2023 following a contested hearing in the Circuit Court. A stay of 18 months was placed on the OFP, and the Appellant was represented by both solicitor and Counsel at the hearing.
• The OFP was appealed to the High Court and this came on for hearing on 15 February 2024.
• Two days prior, the Appellant issued proceedings which challenged the constitutionality of Section 2[2] of the Act (the “Constitutional Challenge Proceedings”). On the morning of the hearing of the appeal, the Appellant applied for an adjournment pending the determination of the Constitutional Challenge Proceedings, but this application was refused on the basis that it had already been determined in an earlier decision of the High Court that the Property was not a family home for the purposes of the Act. The High Court dismissed the appeal and affirmed the OFP.
• An Execution Order in respect of the OFP was issued on 25 September 2024 and by letter dated 15 October 2024, the Sheriff informed the Appellant that she must vacate the Property by 22 October 2024.
• On 23 October 2024, the Appellant sought leave of the Supreme Court to appeal the Order of the High Court and on 18 October 2024, she was granted an interim order of the High Court restraining the Sheriff from executing the OFP. She also sought an interlocutory injunction in those terms by separate notice of motion.
• By earlier notice of motion, Promontoria sought an order striking out the Constitutional Challenge Proceedings on the grounds that no reasonable cause of action was disclosed and that they were bound to fail.
• Both applications were heard on the same date and on 19 November 2024, the High Court refused Promontoria’s application to strike out and refused the Appellant’s application for an interlocutory injunction.

Judgment of the High Court

Cahill J. was not satisfied that Promontoria had discharged the onus showing that the Appellant’s claim was bound to fail. In considering the Appellant’s application for an interlocutory injunction, she referred to the principles as set out in Merck Sharpe and Dohme v Clonmel Healthcare[3] and identified six broad topics that must be assessed, as follows:

• The existence of a serious issue to be tried;
• The availability of a permanent injunction;
• The assertion of delay in seeking injunctive relief;
• The absence of an undertaking as to damages;
• Allegations of material non-disclosure; and
• Other factors in the balance of justice.

Having carefully considered each of the above criteria with regard to the issue of the balance of convenience, Cahill J. held the following:

• Promontoria’s application for a strike out had failed, therefore it followed that the Appellant had reached the threshold of a serious issue to be tried.
• on the availability of a permanent injunction at the full hearing, it seemed more likely than not, based on the information before the Court, that a permanent injunction would be refused. The granting of a permanent injunction would effectively erase the loan and thus cancel the right of Promontoria to recover monies secured on the Property.
• on the issue of delay, the Appellant was aware since 12 March 2024 (being the date of the High Court dismissing the appeal against the OFP) that Promontoria were entitled to possession, but she waited until 18 October 2024 to seek an injunction. In addition, the Appellant offered no explanation for her delay and the delay caused prejudice to Promontoria, which had acted on the basis that it was entitled to possession on 7 September 2024.
• the absence of an undertaking as to damages weighed against the grant of an injunction, notwithstanding that there was no cross-examination of the Appellant on her assertion that she lacked the means to give an undertaking, and no evidence had been adduced to support or contradict that assertion.
• while the Property was the home of the Appellant, no payments had been made since 2013, and a stay of 18 months had been placed on the OFP which allowed the Appellant to make alternative accommodation arrangements.

Court of Appeal Judgment

Meenan J. of the Court of Appeal agreed with the findings of Cahill J. and held that while there was a serious issue to be tried, the balance of justice lay against the granting of the injunction. The Court also agreed that the factors identified by Cahill J. above as weighing against the granting of the injunction plainly outweighed the factors on the other side of the equation. In particular, Meenan J. held as follows:

• while the Property was the Appellant’s home, Cahill J. was correct to identify the extent of the indebtedness, the fact that no payments had been made for such a significant period of time and also the extent of the stay placed on the OFP which gave the Appellant more than sufficient time to seek to make alternative accommodation arrangements.
• in circumstances where an equitable jurisdiction had been invoked, the general principle of “He (She) who comes to equity must come with clean hands”[4] was of particular relevance in this case. In particular, the Court had to consider the manner in which the proceedings were prosecuted by the Appellant and whether any delay in seeking an injunction had a reasonable explanation. The Court commented that since the Appellant had been represented by solicitor and Counsel at the hearing of the OFP in January 2023, then she must have been fully aware that she could not avail of the protection offered, if any, by Section 2 of the Act. Further, any constitutional challenge should have been mounted in early 2023, or earlier, but it wasn’t and there was no real explanation for the delay. The Appellant waited five months until after the Order of the High Court dismissing the appeal of the OFP before seeking the injunction restraining repossession and four days before she was required to vacate the Property. In the Court’s view, this was more than a tactical delay and was a “clear and deliberate attempt” by the Appellant to frustrate Promontoria in exercising its legal entitlements.
• the Court also agreed with Cahill J.’s findings that “there would be several hurdles” to the granting of a permanent injunction to the Appellant for the hearing of the action. The Court reiterated that no payments had been made since 2013 and while that was Mr. McDonagh’s responsibility, the Appellant has benefited from this fact in that she has lived in the Property for 13 years without paying anything towards the debt.
• while the Court agreed with Cahill J’s conclusion that the absence of the undertaking as to damages weighed against the granting of the injunction sought, it disagreed with the reasoning. Meenan J. commented that the High Court did not put enough emphasis on the failure to put evidence of the Appellant’s lack of means before the Court, merely a bare assertion, and that this is a vitally important requirement in any application for an injunction.

Conclusion

Meenan J. was satisfied that the High Court was correct in refusing the injunction and dismissed the appeal. It also dismissed Promontoria’s cross-appeal of the High Court’s Order refusing the motion to strike out the Appellant’s proceedings. On the question of costs, the Court was provisionally of the view that since Promontoria was “wholly successful” in opposing the appeal, then it is entitled to its costs. The Appellant was invited to deliver written submissions within 14 days if she wished to contest that proposed Order. Ultimately, by a written judgment dated 28 February 2025[5] and following receipt of written submissions by the parties, Meenan J. awarded Promontoria its costs of the Appellant’s appeal and made no order as to costs on the cross-appeal.

[1] [2025] IECA 40

[2] Section 2 of the Act defines the meaning of “family home” in the Act to be, “primarily, a dwelling in which a married couple ordinarily reside”. It goes on to say that the “expression comprises, in addition, a dwelling in which a spouse whose protection is in issue ordinarily resides or, if that spouse has left the other spouse, ordinarily resided before so leaving”.

[3] [2019] IESC 65; [2020] 2 IR 1

[4] This is one of the so called “maxims of equity” which are general principles which the Court will apply in granting or withholding equitable remedies, such as injunctions, orders for specific performance or declarations, for example. They are broad principles and are applied when the Court is asked to exercise its discretion in applications for such remedies.

[5] [2025] IECA 51