What's another day? It's delay!

The jurisprudence generated by receiverships over the last two decades has provided welcomed guidance on various aspects of contract law and equitable principles. The recent ex tempore decision in the matter of Patrick McCann v Start Mortgages DAC, Ken Fennell, James Anderson and BRG Gibson Auctions[1] demonstrates that parties must come to the Court for assistance in a timely manner and with clean hands. The facts
 
The Plaintiff brought an application for interlocutory relief to prohibit the Defendants from offering, by way of auction a portion of charged property in County Meath.
 
Although all the details did not appear to be before the Court when interim relief was granted, the timeline of events is important.
 
A Plenary Summons issued on Thursday, 22 September 2022. At approximately 17.20 on Tuesday, 27 September 2022 an application was brought for short service of a motion for interlocutory relief returnable to Thursday, 29 September 2022 at 11am.
 
The auction of the property was to take place on the Thursday, 29 September 2022 at 12noon.
 
A vacation judge was obliged to hear the interlocutory application to prevent the auction while the auction was in fact ongoing. The Defendants volunteered an undertaking not to progress the sale until the matter next came before the Court, but could not stop the auction proceeding at such a late stage. The Court Order was made at 13.24, but in fact, the property sold at 13.31.
 
The Defendants argued that the Plaintiff's relief be denied on the grounds of delay. 

The Judgment
 
While full details of the date of the appointment of a Receiver are not recited in the judgment, it was evident that the Plaintiff was aware of the Receiver being appointed and subsequently securing the property from early August 2022 and accordingly, the Court held that "the Plaintiff was at least aware of the risk that the Property might be sold". Furthermore, the Court commented that the Plaintiff had to have been aware "relatively quickly after the first publication of the action" of the intention to sell the Property.
 
Proceedings issued on 22 September 2022, but were not served on the Defendants. Despite a Motion seeking short service coming before the Court on the following Tuesday, it was only on the morning of the auction on the Thursday that a copy of the Motion papers were served on the Defendants. In the context of an application for short service and urgent relief of this kind, the Court held that this constituted "excessive delay".
 
The Court went on to consider the balance of issues such as whether there was a fair issue to be tried and concluded, inter alia, averments at the level of general level of assertion and inconsistencies between affidavit and oral evidence deprived the Plaintiff of an entitlement to the relief sought.

Commentary
 
Interlocutory relief is sought to maintain the status quo and protect the rights of parties but the Court has now held that applications for such relief  must be brought in a timely manner. An eleventh-hour application to frustrate or ambush the sale of a property is rarely likely to succeed but if there is to be any hope of the success of such an application, it should be brought on notice to all relevant parties as soon as possible.
 
This judgment serves as a useful reminder that once on notice of a sale of a property, act sooner rather than later as "delay of that kind negates any entitlement to such urgent, mandatory relief".
 
As a final analysis, interlocutory relief is governed by the law of Equity and as such subject to the various equitable maxims. This case clearly reaffirms the equitable maxim that Delay Defeats Equity!

 

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Written by: Joanne Cooney and Mark Woodcock