Court awards borrower €550,000 in damages over 'wrongful action' of receiver
High court reporters
The High Court has awarded a man €500,000 in damages against a receiver who acted “without lawful authority” in possessing five properties and selling three without a court order.
Mr Justice Anthony Barr was satisfied it was appropriate to make an award of exemplary damages as a mark of the court’s disapproval of the receiver’s “wrongful action”.
The judge said receiver Michael McAteer, of Grant Thornton, did not sell the three properties at an undervalue or mismanage any of the 12 under his control. He was satisfied Niall Hade, who ran a hostel business in Tallaght, did not suffer any direct financial loss due to the receiver’s possession and sale of some of the properties.
However, the court was entitled to mark its disapproval of the “egregious action” of selling three properties and of possessing five without a court order by awarding Mr Hade €550,000 damages against Mr McAteer, Mr Justice Barr said.
Loan
He made the order in an action brought by Mr Hade, who represented himself before the court, against Bank of Ireland Mortgage and Mr McAteer.
In proceedings brought by the bank against Mr Hade and his wife, Joyce Hade, the judge granted judgment against them jointly and severally in the sum of €2 million.
This is on foot of a €2.7 million loan taken out in June 2006 to refinance borrowings for their family home and other properties. It was secured over eight properties.
He gave further judgment of €1.4 million against Mr Hade, for borrowings advanced to him in September 2007 for the purchase of four properties at St Maeiruns Park, Oldbawn, Tallaght, Dublin 24, which also acted as security.
Between about 1985 and 1999 Mr Hade operated two plant hire companies, before operating a hostel, under contract with the government, from a premises at Kilakee Way in Dublin until 2016.
The couple, who have five children, fell into arrears during a period when interest only was due on the loans, the judge explained.
Repayment demands
The bank demanded immediate full repayment of both loans, plus interest, totalling €3.9 million, in September 2011. Between 2011 and 2013 it appointed Mr McAteer as receiver over all 12 security properties.
In his recent ruling, the judge found that five of the properties were subject to a December 17th 2009 mortgage that agreed these would be treated as “housing loans” and “housing loan mortgages”, under the Land and Conveyancing Law Reform Act of 2009, even though they did not strictly come within the qualifying criteria set out in the Act.
This Act bestows a duty on a receiver, in respect of certain mortgages created after December 1st, 2009, to obtain a court order enabling him to take possession of the mortgaged property and a court order allowing for the sale of the property, the judge said.
Such a duty can be circumvented by the terms of a mortgage deed, except for when the loans are deemed to be “housing loans” within the meaning of the 2009 Act, he added.
Mr Justice Barr gave a view that the parties should be responsible for their own legal costs.
