Facts 

In Farrell & Kelly v Petrosyan & Ors (linked to McLoughlin & anor v ACC Loan Management Ltd), High Court, O'Connor J, 2 March 2016 the High Court considered an application for possession on behalf of receivers appointed by ACC Loan Management Limited (ACC).  One of the issues before the court was whether the receivers had authority to act in the proceedings in view of their deeds of appointment by ACC. 

Mrs McLoughlin, in challenging the possession proceedings, referred the Court to the decision of Cregan J in McCleary v McPhillips [2015] IEHC 591 which held that deeds of appointment by ACC of receivers were invalid by reason of the failure to have authorised signatories on the deeds of appointment. In that case, the failure arose as the deeds of appointment had been executed under hand rather than under seal as required by the mortgage deed. 

O'Connor J noted that the judgment of Cregan J is under appeal. However, he went on to hold that even if he accepted that there was some omission on the part of ACC to have authorised the signatories to the deeds which appointed the receivers in the present case, this was remedied by a resolution of the Board of ACC made on 19 August 2015.  That resolution ratified the appointment of receivers which may have been invalidated by reason of any interpretation of the judgment delivered by Cregan J in the McClearycase. 

O'Connor J also had regard to the judgment of Clarke J in Kavanagh & anor v McLaughlin & anor [2015] IESC 27 which considered arguments in relation to the validity of the appointment of a receiver.  In that decision Clarke J endorsed the view of Birmingham J in the High Court that the receiver was acting as agent of the bank and her actions had been approved of and ratified by bank. 

Comment 

The McCleary decision had given rise to considerable uncertainty in relation to deeds of appointment of receivers and this acceptance of the ratification process will be welcomed by financial institutions.