THE COURT OF APPEAL
Neutral Citation Number: [2018] IECA 354
Record Number 2017/113
Irvine J. Whelan J. Kennedy J. BETWEEN/ KEN TYRRELL
- AND -
DAVID WRIGHT AND ROPE WALK CAR PARK LIMITED
JUDGMENT of Ms. Justice Irvine delivered on the 15th day of November 2018
1. This judgment relates to an application by Mr. David Wright, who was the appellant in an appeal determined by this court earlier this year, to set aside the judgment of Whelan J. delivered on the 28th September 2018 and the court's order consequent thereon.
Background
2. The appeal brought my Mr. Wright was against an order made in the High Court (Costello J.) on an application for an interlocutory injunction. On the 24th February 2017, she ordered Mr. Wright to deliver up possession of a number of properties to Mr. Ken Tyrrell, who was appointed receiver over those properties by Launceston Property Finance DAC on the 22nd August 2016. The High Court judge granted a stay on her order insofar as it related to the property at 1B Swan Lake, Chapelizod Road, Dublin until the 30th June 2017 and that order was extended by this court until the 21st December 2017.
3. Mr. Wright brought an application to extend that stay and that was heard by Ryan P. on the 26th January 2018. On the same date he also sought liberty of the court to introduce new evidence on the hearing of the appeal concerning what he then described as "conflicting security documents" which he stated had not been before the High Court judge when she made her order. The receiver maintained that the point which Mr. Wright wished to raise, relying on the new documentation in his possession, was without foundation because it was not disputed that in order to procure his loan he had entered into a mortgage in respect of each property and had drawn down loan monies. Despite adopting this position, junior counsel on behalf of the receiver did not object to the copy document being admitted on the hearing of the appeal.
4. It is clear from p. 24 of the transcript of the hearing of the 26th January 2018 that Mr. Wright's principle concern was that he be allowed to introduce, before this court, the new evidence on the basis that it had been fraudulently excluded by the receiver in the High Court. It is also abundantly clear from the transcript that the Court had granted Mr. Wright liberty to introduce new evidence albeit limited to the security documentation supporting his loan. That said, no formal court order was drawn to reflect the directions given by the president on that date.
5. In an affidavit filed by Mr. Wright dated the 21st February 2018, the day upon which his appeal was heard, he referred to the fact that his appeal was "about the veracity of mortgage deeds" relied upon by the receiver who claimed to have been appointed by mortgage deed dated the 18th December 2008. According to Mr. Wright there was no such document. In his affidavit he referred to the fact that in his view there were three different copy mortgages, all attested to be true copies of the original. That affidavit also exhibited what he referred to as the third alleged copy of the original mortgage deed.
6. It is also the case that in accordance with the directions given by Ryan P. on the 26th January 2018, Mr. Wright delivered amended written submissions which deal in detail with two of the copies of the mortgage deed pursuant to which Mr. Tyrrell was appointed receiver. His submissions also detailed what he described as a number of discrepancies between those copy documents and the inferences which the court was asked to draw from them.
7. Of significance to the background facts relevant to this application are a number of exchanges between the parties and the court which took place in the course of the appeal itself. The first was an exchange which followed a statement made by Mr. Wright concerning (i) the collapse of the property market, (ii) an agreement allegedly made with Anglo Irish Bank that the properties be rented and (iii) a proposal that he would make substantial borrowings on credit cards. Counsel for the receiver objected to what he described as Mr. Wright giving evidence, as a result of which Mr. Wright was reminded that the court had to confine itself to a consideration of the evidence in the proceedings. In response to a suggestion by the court that he might best present his appeal by addressing the grounds set out in his notice of expedited appeal, Mr. Wright advised the court that Ryan P. had granted him permission to pursue "other grounds" and that he was entitled to introduce new evidence.
8. In response to this statement by Mr. Wright, senior counsel on behalf of the receiver made the following statement to the court: "my client dissents from that. There is no order to that effect and that was not what the President said."
9. Mr. Wright then reminded the court that the new evidence was in his affidavit. In turn, the Court responded by indicating that it had that affidavit and that senior counsel for the receiver was making no objection to that affidavit forming part of the evidence. From the exchanges that followed, it is clear that Mr. Wright highlighted to the court the importance of the additional information and documentation in his affidavit and that the court had accepted his statement that the receiver had in fact consented to the admission of the new evidence on the 26th January 2018.
10. For the reasons set out in the judgment of Whelan J. delivered on the 28th September 2018, with which judgment the other members of the court agreed, Mr. Wright's appeal was dismissed. In that judgment, Whelan J. dealt with each of the grounds of appeal contained in the notice of expedited appeal after which she addressed, under the heading "Further arguments" Mr Wright's submissions concerning the significance of the copy security documentation which had come to light since the hearing in the High Court. She did so in the context of reviewing the approach of the High Court judge to the granting of the interlocutory injunction, as was appropriate having regard to the nature of the appeal, and concluded that any discrepancies in that documentation was not sufficient to deny the receiver the injunction which he sought.
The present application
11. In his affidavit grounding the present the application, Mr. Wright essentially provides three reasons why the judgment and order of this court should be set aside. First, he maintains that the receiver withheld from the High Court judge the actual mortgage filed in the Land Registry which was undated and had failed to explain the inconsistencies in the copies of the security documentation furnished to the court. Second, Mr. Wright maintains that the sum claimed for interest in other proceedings brought by way of summary summons was incorrect and the statements of account relied upon by the bank were inconsistent in this respect. Third, and most importantly, the Court of Appeal had been misled by senior counsel acting on behalf of the receiver when it had been informed that Mr. Wright had not been granted liberty to introduce new evidence by Ryan P. on the 26th January 2018. He had obtained such an order and junior counsel for the receiver had agreed that the evidence could be admitted on the appeal. Thus, Mr. Wright maintains the Court of Appeal was misled on an issue of fundamental importance. He also submits that whilst the court's judgment notes his reliance upon the new evidence and refers to the different copies of the mortgage instrument, that evidence was tainted by what was said by senior counsel on behalf of the receiver. This was apparent from the fact that his argument, which was at the heart of his appeal, had been dealt with very briefly in the court's judgment. Further, in her judgment Whelan J. had referred to the fact that, without leave of the court he had sought to advance further additional grounds of appeal beyond those in his notice of appeal. This observation, Mr Wright maintains, supports his contention that his submission concerning the consequences that flowed from the differences between the copy documents was not considered with appropriate deference.
The Prevailing Legal Principles
12. The circumstances in which a court will set aside a final order are rare indeed. Some of the better known judgments which engage with the prevailing principles are those of Denham J. in Re Greendale Developments Ltd (No3) [2000] 2 I.R. 514, Murphy J in Tassan Din v. Banco Ambrosiano S.P.A [1991] I.R. 569 and Fennelly J. in Kenny v. The Provost, Fellows and Scholars of the University of Dublin, Trinity College [2008] 4 JIC 1001. These judgments make clear that the party who seeks to set aside a final order must discharge the burden of establishing that there are exceptional circumstances showing that the remedy is necessitated by the interests of constitutional justice. Further, the mere assertion of a breach of constitutional rights does not provide a sufficient basis for seeking to set aside a final order.
13. It is nonetheless correct as a matter of law that fraud can provide a basis for setting aside a final order. However, once again the onus of proof is and exceptionally high one as was stated by Murphy J. in Tassan Din (at p. 581) where he approved of the judgment of Lord Simon the Ampthill Peerage Case [1977] A.C. 547 at p. 591 where he said the following:-
"To impeach a judgment on the grounds of fraud it must be proved that the court was deceived into giving the impugned judgment by means of a false case known to be false or not believed to be true or made recklessly without any knowledge on the subject. No doubt, suppression of the truth may sometimes amount to suggestion of the false: The Alfred Nobel [1918]. But, short of this, lack of frankness or an ulterior or oblique or indirect motive is insufficient."
14. It is clear from all of the authorities that nothing less than proof of fraud in the strict legal sense of that word will suffice to set aside a final order. The applicant must establish conscious and deliberate dishonesty on the balance of probability. Further, as was stated by Fennelly J. in Kenny at para. 55:- "the fraud alleged must be such as to affect the impugned decision in a fundamental way. It will not suffice to allege that the new situation revealed by the uncovering of the fraud might have affected the judgment".
15. The reason for the existence of such a high threshold before a final order will be set aside is obvious. There must be finality to litigation. Parties in most cases, such as the present one, have the opportunity to contest proceedings at first instance and also have an opportunity to have any judgment pronounced against them tested in a review process on an appeal. However, at that point, save in exceptional circumstances the rights of the parties are determined for all time and the successful party is entitled to rely upon the fact that the outcome of the litigation will not later be disturbed.
Discussion
16. Bearing these principles in mind I will now return to deal with Mr. Wright's submissions. I will deal with each of his arguments in turn.
17. First, it is not open to Mr. Wright, at the conclusion of the hearing before this court to seek to set aside the court's judgment on the basis of anything that occurred in the course of the High Court proceedings. If he was of the view that the receiver had perpetrated a fraud on the High Court judge and this had operated to his detriment, his remedy at that point was to seek to set aside the High Court judgment. However, it is clear that he eschewed that option when the undated mortgage deed came to hand in May 2017. Instead, he elected to seek to have new evidence admitted on the hearing of his appeal. Even if this was not the strict legal position, Mr. Wright's has produced no concrete evidence to support his contention that the receiver fraudulently withheld the copy security documentation from the High Court judge. Whilst Mr Wright has been in a position to produce three copy deeds of mortgage which have some minor discrepancies between them, absent a bald assertion of fraud, there is no evidence to support any intentional or deliberate wrongdoing on the part of the receiver for failing to have all those documents before the court for the purposes of his interlocutory injunction application.
18. Neither in my view has Mr. Wright demonstrated how the availability of that documentation at the time of the injunction would have altered the result of the High Court application, having regard to the principles which prevail on such an application. Substantive issues of law are not determined on an application for interlocutory relief and are inevitably left to be resolved at a plenary hearing. Damages will be the remedy if it be established at the plenary hearing that the receiver was not validly appointed and had no entitlement to the order for possession.
19. For completeness, I would here observe that as yet the plenary hearing of these proceedings has not taken place. Thus, it remains open to Mr. Wright to seek to force on that action for hearing as a means of challenging the validity of the receiver's appointment and his entitlement to sell the property. Should he do so he will be entitled to rely upon all of the evidence that was before this court on the hearing of the appeal and if successful in that challenge, he would of course be entitled to damages.
20. Second, insofar as Mr. Wright wishes to rely upon an incorrect calculation of interest claimed in summary summons proceedings, those are matters that are wholly extraneous to the within proceedings. Mr. Wright had every opportunity to defend those proceedings and to appeal the outcome. He cannot use anything that occurred in those proceedings which were finally and conclusively determined as a basis upon which he might seek to reopen the within possession proceedings.
21. Finally, as to Mr. Wright's submission that the court's judgment should be set aside because of what was said by senior counsel to the court concerning the admission of new evidence on the appeal, that is a submission which I would reject both as a matter of fact and as a matter of law.
22. What was stated by counsel and what is reported in the transcript could never amount to proof of fraud, on the balance of probabilities, as is required.
23. It is indeed regrettable that senior counsel acting on behalf of the receiver made a statement to the court which was incorrect insofar as he maintained that Mr. Wright had not been granted permission to introduce "other grounds" and "other information in the new booklets and the new evidence" into the case. It is, however, clear from the transcript of the directions given by the President that Mr. Wright was at that stage given liberty to introduce the undated deed of mortgage which had come to his attention in May 2017. Nonetheless, what is abundantly clear from the exchanges between Mr. Wright and the court, which immediately follow senior counsel's intervention, is that the court well understood that Mr. Wright was seeking to rely upon the discrepancies between each of the three copy documents referred to in his affidavit of the 21st February 2018, which the court had in its possession and that the members of the court were aware of the fact that the receiver was making no objection to the introduction of that evidence. Senior counsel did not contest Mr. Wright's assertion that his junior counsel had, on behalf of the receiver, agreed that this documentation could be admitted on the hearing of the appeal.
24. Having considered the affidavits filed and submissions made by the parties on the present application I am satisfied that there is nothing in the evidence that has been put before this court by Mr. Wright which could possibly cause me to conclude that the receiver, or his counsel, sought to deliberately deceive or mislead the court concerning the directions given by Ryan P. on the 26th January 2018, so as to prohibit the court considering the new evidence upon which Mr. Wright wished to rely to supplement his original grounds of appeal. Further, I am quite satisfied that regardless of the intervention made by senior counsel which misstated what had occurred on the 26th January 2018, the court did not exclude from its consideration the new evidence introduced by Mr. Wright.
25. Senior counsel's intervention was, for the reasons already stated, regrettable. It is important here to state that judges depend not only on the independence and integrity of counsel, but also rely on counsel for a truly accurate account of what may have happened before another court on another day because often times the court will not have a transcript of what transpired on that occasion. The accuracy of any such statement made by counsel is of even greater importance where the other party is unrepresented. However, not only is there no evidence of any intentional deceit or fraud on the part of the receiver or senior counsel acting on this behalf when he incorrectly advised the court that the President had not permitted Mr. Wright to introduce new evidence, but Mr. Wright has not established that anything that was said on behalf of the receiver on 21st February 2018 adversely affected the outcome of the appeal. All of the evidence points the other way.
26. The following are but some of the reasons why Mr. Wright's application must fail:-
(i) it is clear from the transcript of the proceedings before the Court of Appeal to which I have earlier referred and from Mr. Wrights affidavit of 21st February 2018, that the court, in accordance with the earlier directions of Ryan P., accepted the new evidence for its consideration on the hearing of the appeal;
(ii) as a result of the order of Ryan P., Mr. Wright filed a detailed amended submission which was delivered on the 13th February 2018 wherein, over the course of four pages, he drew the court's attention to what he considered to be significant differences between two of the copy security documents. These submissions and the documents therein referred to were all considered by the court for the purposes of determining the appeal;
(iii) in the course of his oral submissions, Mr. Wright took the court through what he considered to be the material differences between the various copy security documents and made submissions as to the consequences he maintained flowed from those inconsistencies. Those submissions were all considered by the court for the purposes of determining the appeal;
(iv) counsel for the receiver also addressed these, what he referred to as, minor discrepancies between the counterpart mortgage and the certified copy in his submissions;
(v) in the course of her judgment, Whelan J. addressed Mr. Wright's arguments which centred upon the three different copies of the mortgage instrument which had come to light since the High Court hearing. She did so in the context of an appeal against an interlocutory injunction and correctly, as a matter of law, concluded that any such discrepancies did not undermine the receiver's entitlement to the interlocutory relief which he sought. She considered the technical disparities to be largely "specious and unmeritorious" (at para. 92);
(vi) the fact that in her judgement, Whelan J. deals at some length with each of the grounds of appeal proposed by Mr. Wright in his notice of expedited appeal does not support his contention that his submission based upon the copy security documentation which became available since the High Court hearing was not considered. She went on to give separate consideration to the significance of the new evidence in the context of the interlocutory injunction which had been granted. Given the principles that apply on an application for an interlocutory injunction, it would have been wholly inappropriate for the court to make any final determination concerning the validity of the receiver's appointment or his power of sale based on those documents. Those were matters which could only fully be determined at a plenary hearing.
Conclusion 27. A court may only set aside a final judgment in exceptional circumstances. Where the applicant seeks to rely upon a claim of fraud, as is the case here, they must be in a position to establish, on the balance of probabilities, deliberate and purposeful dishonesty which likely affected the impugned decision in a fundamental way.
28. On the facts as identified by Mr. Wright there is simply no evidence of fraud or deceit of any kind. Whilst there was a statement made to the court which was incorrect as a matter of fact, it comes nowhere near to the type of conduct that would be required for the court to set aside a final order. Further, for the reasons earlier set out in this judgment the error on the part of counsel for the receiver, has not been shown to cast doubt over the validity of the decision which it is now sought to impugn.
29. For all of the reasons earlier stated I would refuse the application.
