Supreme Court dismisses appeal against receiver appointment and loan recovery orders in Irish property dispute.

THE SUPREME COURT

[Appeal No: 473/2013]

Clarke J.

Laffoy J.

Dunne J.

Between/

Tom Kavanagh and Bank of Scotland plc

Plaintiffs/Respondents

and

Patrick McLaughlin and Roseann McLaughlin

Defendants/Appellants

Judgment of Mr. Justice Clarke delivered the 19th March, 2015.

1. Introduction

1.1 This is yet another case which stems from the collapse of the property market. Before the property crash, and in connection with

a series of transactions relating to the sale, purchase and partial redevelopment of houses, the defendants/appellants ("The

McLaughlins") borrowed significant sums of money from the Irish subsidiary of the second named plaintiff/respondent ("BOS"). That

subsidiary was called Bank of Scotland Ireland Limited ("BOSI"). In circumstances which are of some relevance to one of the issues

which arises on this appeal, BOSI ceased to exist as a result of a cross-border merger under relevant European legislation to which it

will be necessary to refer in due course. In that context, BOS claims to be entitled to stand in the shoes of BOSI for all purposes

connected to those loans.

1.2 There is no doubt but that the relevant loans have not been repaid. It was in that context that BOS appointed the first named

plaintiff/respondent ("the Receiver") as receiver of some of the properties which were the subject of the relevant loans.

1.3 Disputes having arisen between the parties, these proceedings were commenced, in which the Receiver sought declaratory relief

designed to confirm the validity of his appointment as such. BOS sought judgment in respect of the monies which were said to be

owing on foot of the various loans. Both legs of the claim were successful, and the High Court (Bermingham J.) made an order

declaring that the Receiver was validly appointed over certain properties specified in the order. In addition, it was ordered that BOS

was entitled to recover a sum of €4,064,138.01 from the McLaughlins. An order for costs was also made against the McLaughlins.

1.4 The McLaughlins have appealed to this Court against those orders. The course that the appeal to this Court took is of some

relevance to the way in which it is appropriate to approach the issues now before the Court. Therefore I propose to outline some

aspects of that process.

2. Relevant Procedural History

2.1 It will be necessary, in due course, to identify the specific issues which arose between the parties, both before the High Court

and before this Court. However, for present purposes, it is necessary only to note that one of those issues concerns the question of

whether the security which BOSI undoubtedly obtained over the relevant properties transferred to BOS as a result of the cross-border

merger. I will turn to the relevant European and Irish implementing legislation in respect of cross-border mergers in due course.

However, on any view, it was clear that the legal issue raised had the potential to be of significant importance well beyond the scope

of this case. The point made on behalf of the McLaughlins was in no way specific to their circumstances. Rather, it was alleged that

the cross-border merger effected between BOS and BOSI did not, as a matter of law, transfer the benefit of any security held by

BOSI to BOS. If that point were valid, then it would have a profound effect on the position of BOS. It would also, potentially, have an

effect on other cross-border mergers where one of the undertakings to be merged engaged in secured lending.

2.2 On the basis of the importance of the point concerned, the Chief Justice acceded to an application that the case be afforded

priority. Written submissions were exchanged in the usual way, and when the case came to be mentioned some short period before

the date on which the appeal was listed to be heard, it was intimated that there had been a change of solicitor on the part of the

McLaughlins, but that the appeal would still go ahead. However, on the morning of the appeal when the Court assembled, counsel

(who had not previously been instructed in the case) appeared on behalf of the McLaughlins and indicated that he felt in some

difficulty, by reason of the lateness of his instructions in the case, in being able to adequately present his clients' case. Counsel did

not, in fairness, suggest that he would be unable to present the appeal, but rather indicated that he would not be able so to do as

well as he might have wished. On that basis, an adjournment was sought. The adjournment was opposed by counsel who acted for

both the Receiver and BOS.

2.3 Having taken a little time to consider the matter, the Court ruled that an adjournment would not be appropriate. I should record

the reasons for the Court's view. This was a case in respect of which priority had been granted and an early date (at the expense of

other cases) allocated. The only intimation of the need for an adjournment came at literally the last moment as the case was about

to commence. While a party is more than free to change its legal representation, it cannot do so in circumstances which affect the

run of the case or, at least, cannot do so without taking a significant risk that the court will not be sympathetic to an adjournment

where that course of action would sufficiently affect the orderly conduct of the court's business (to the detriment of other litigants)

and might also prejudice the interests of other parties to the case. It is important that parties realise that a change of legal team

must be done in good time in order to allow the new legal team to fully prepare for the case. Unless there is some very compelling

reason why the change could not have been effected earlier, a late change will not permit a legitimate argument to be made to the

effect that the new team has not had an adequate opportunity to prepare. No reason was put forward to suggest that there were

any extraordinary circumstances about the change of legal team in this case. In the circumstances, the Court declined to allow the

adjournment.

2.4 Counsel had, as already noted, indicated that he would do his best in such circumstances, and the appeal proceeded. For the

record, it is also important to note that counsel identified three issues, raised in the notice of appeal and expanded on in the written

submissions, which were stated to be the principal grounds of appeal put forward, and the ones which would be addressed in oral

argument. In so doing, it is important, however, to note that counsel was quite clear in indicating that he was not, by adopting that

course of action, abandoning any of the other points raised in the written submissions. The Court is, therefore, faced with those

three principal issues, but will also have to deal with the additional issues in respect of which counsel rested on the written

submissions. I, therefore, turn to the issues.

3. The Issues

3.1 In addition to the cross-border merger point already touched on, two other central issues were raised.

3.2 First, it was argued that the arrangements between BOSI and the McLaughlins were such that the bank (whether BOS or BOSI)

was not entitled to call in the relevant loans until such time as a property known as "Latona", situated in Foxrock in Dublin, had been

sold. "Latona" was the residence of the McLaughlins. They wished to move to smaller accommodation, and took out a so-called

"bridging loan" to enable them to purchase a property known as 40 Kerrymount Rise. While further variations in the arrangements

between the parties occurred at a later stage (including the provision of further loans for other projects), the core factual argument

advanced on behalf of the McLaughlins at the appeal was that their arrangements with BOSI were such that it had been accepted

that the loan in question could not be called in until "Latona" had been sold. A secondary issue arose under the same heading, which

concerned whether the relevant loans were non-recourse so that any shortfall, arising in the event that the sale of "Latona" was

insufficient to pay off the loans, could not be visited on the McLaughlins. I describe that as a subsidiary point because it appears to

have arisen in the context of an argument about whether BOSI could be expected to wait indefinitely to have the loan repaid. It was

in that context that it was said that it might be the case that BOSI could require a sale at a point in time when the realisable value of

"Latona" was insufficient to pay off the loans, but that if BOSI made such a requirement, it would have to forgo any remaining balance

of the loans in question.

3.3 Second, a separate point was made in respect of the registration of BOS as the registered owner of some of the charges which

arise in this case. Some of the lands in question are registered land. No specific registration of BOS has been made as the new

registered owner of the charge originally executed in favour of BOSI. It was argued on behalf of the McLaughlins that the failure of

such registration means that, at least so far as registered land is concerned, neither BOS nor the Receiver can enforce the charge in

question at this stage. Beyond those core issues are the additional questions raised in the written submissions, to which I will return

in due course.

3.4 As can be seen the three core issues are really quite different in nature and can, therefore, be dealt with entirely separately. I,

therefore, turn to the first issue which concerns the "Latona" point.

4. The "Latona" Issue

4.1 As noted earlier, the issue raised by the McLaughlins on this appeal under the "Latona" heading is primarily based on an assertion

that there was an understanding or arrangement between the parties, (being BOSI and themselves) at the time when the original

bridging loan in respect of "Latona" was taken out, which was to the effect that the loan would be fully repaid out of the proceeds of

the sale of "Latona". On that basis, it is said that the loan has not fallen due because "Latona" had not been sold or, alternatively, if

BOS were to insist on a sale now, then same could only be done on the basis of writing off any shortfall.

4.2 The starting point has to be to address the way in which this issue was approached both by the parties and the trial judge in the

High Court. First, it is necessary to note the pleadings. The claim made in their statement of claim by the Receiver and BOS is

relatively straightforward. Reference was made to five facility letters, each dated the 7th April, 2008, on which a variety of sums

totalling €3,204,011.65 were said to have been advanced by BOSI to the McLaughlins. Further reference was made to what have

been described as letters of amendment, dated between the 31st July, 2008, and the 1st August, 2008, which were said to have

extended the terms of the earlier facilities. Later reference was made to various other documentation, which was said to vary or

amend the relevant facilities. Thereafter, it was pleaded that the monies have not been repaid, and that the Receiver was appointed.

On that basis, a declaration as to the validity of the appointment of the Receiver was sought, together with certain injunctions

restraining the McLaughlins from interfering with either the Receiver or the relevant properties. A claim was also made on behalf of

BOS for the monies said to be outstanding on the various loan agreements together with interest.

4.3 A lengthy defence was filed on behalf of the McLaughlins. Many legal issues have been raised, including the cross-border merger

question, to which reference has already been made, and the absence of registration of the ownership of a charge or charges in the

name of BOS. Other issues concerning the validity of the appointment of the Receiver were also raised. However, so far as liability to

pay the monies said to be due on foot of the loans is concerned, it was said, at paras. 4 - 8 of the defence, that the later loans or

credit facilities were no more than extensions of existing loans, and in particular, were not subject to any new or varied conditions.

There was a blanket denial that the sum claimed was due, and BOS and the Receiver were said to be placed on full proof thereof.

There was also a denial of any failure to pay. There is nothing, however, in the defence as filed, which suggested that a case was

going to be made to the effect that the reason why the monies were not due was because of some arrangement or understanding

between the parties that the monies would not become so due until "Latona" had been sold.

4.4 I do not note these points for the purposes of suggesting that these proceedings should be determined on a pleading point. No

such suggestion was canvassed by counsel for the Receiver and BOS. However, it is always necessary to look at the documents

which have been exchanged between the parties in advance of a trial in order to understand the course which the trial took. The

purpose of pleadings, particulars, discovery and other pre-trial procedures and, where present, exchanged witness statements and

written submissions, is to define the parameters of the case before the trial starts. The trial does not, therefore, start on a blank

canvas. The way in which evidence is presented by either party, and the arguments addressed both on the facts and on the law will

necessarily be coloured by the issues as they appear to be in advance of the trial. While BOS was, therefore, put on proof of

establishing the debt, and was also alerted to the fact that the McLaughlins denied that there could have been any material change

of terms during the course of the various facilities agreed, there was nothing in the pre-trial process which could reasonably be

expected to have alerted BOS to the fact that a claim was being advanced about an understanding or collateral agreement,

independent of the facility letters, which would have postponed the entitlement of BOS to call in the loans until "Latona" was sold.

4.5 Against that background, it is next necessary to turn to the evidence. First, it should be noted that the first named

defendant/appellant ("Mr. McLaughlin") accepted that the relevant facility letters had been signed in circumstances where he had

received legal advice. Next, it is important to note that the various loans, at least so far as the relevant facility letters were

concerned, were all specified to be for a fixed period of time expressed in a number of months. In whatever way it might be

appropriate to characterise the subsequent loans, each followed on from a previous loan (sometimes with variations where a new plan

in respect of the properties had been devised), which amounted to allowing the same monies to continue to be borrowed for another

specified period of months. It is in that context that a debate emerged as to whether the monies were truly due on foot of the final

set of facility letters, or whether those letters were, in reality, simply extensions of existing facilities. For reasons which I will address,

I am not at all convinced that that debate has any effect on the rights and wrongs of the case.

4.6 In any event, when pressed in cross-examination as to whether the final set of loans were not simply, as their terms provided, for

a period of four months, Mr. McLaughlin answered:-

"Well, if we take this loan in isolation the premise is probably correct, but it wasn't an isolated loan, there’s a history

attached here. This agreement is built on many previous extensions and many previous loans".

4.7 In like vein, Mr. McLaughlin suggested that "as the loans were subject to the sale of Latona, there was no way that they were

ever going to be or they could be paid without that sale. That was always - that was the position from day one. We had no other

bank money like. That was understood by Bank of Scotland (Ireland) that the money could only be repaid from the sale of

properties". During his examination in chief, Mr. McLaughlin did suggest that his understanding was that "ultimately until we could get

a sale the loans would be rolled over, as they had been on all occasions prior".

4.8 Insofar as evidence from BOS/BOSI is concerned, the principal witness called, being the official who was most closely involved in

the matter, was a Mark Carney. In re-examination, Mr. Carney was asked whether "[i]t was envisaged by the Bank and by the

Borrower that the sale of Latona would play a role in the repayment of the borrowings". In the context of that question, the answer

was that it was a term of the original agreement but it was not a "specific agreement of the 2008 agreements".

4.9 Next, it is necessary to turn to how these issues, having been touched on in the evidence, were dealt with by counsel on behalf

of the McLaughlins at the close of the hearing. First, it needs to be noted that, in his closing submissions to the High Court, counsel

for the McLaughlins made no mention good, bad or indifferent of an argument to the effect that the loans could not be called in until

"Latona" had been sold. However, the point goes further. Counsel did submit that the loan had not been called in and that the monies

were not due, but a very different reason was given for making that suggestion. On day three, at p.54 of the transcript of the

hearing, counsel said the following:-

"The argument in terms of my contention that the monies had not fallen due relates to the contracts themselves and

these have been opened to the Court."

Counsel then refers to the various provisions in the contract and continues, at p.56:-

"And in essence what I am going to argue and submit to the Court is that the Bank never before declaring an event in

default served a notice specifying the breach and informing my clients what must be done to remedy the breach in the

time specified".

4.10 Thus, it is clear that an argument was put forward that the monies were not due, but that argument was not in any way based

on a suggestion that the monies could not be called in until "Latona" had been sold. Rather, the argument was based on a suggestion

that the bank had not properly issued a demand notice.

4.11 But the matter did not even end there. Doubtless because the issue had been at least tangentially raised in the course of the

evidence, counsel for the Receiver and BOS said the following in his replying submissions (at p.68 of the transcript, on day four):-

"I understood, and indeed I think I articulated this to the court in the course of the proceedings, that the only point

being made was some form of standstill or reliance on some form of standstill agreement or some form of agreement

which never really took precise shape but the effect of which, it appeared, was that the bank could not move until

Latona was sold and then only if the proceeds of sale of whatever sale took place were insufficient".

4.12 Counsel then went on to draw attention to the fact that his opposite number had "made no submissions at all on that point so

presumably it is not being advanced, Judge, or not being pressed". Counsel went on to state that it was a point which was of no

merit in any event.

4.13 It follows that this "Latona" issue was not referred to in any way in the pleadings or in any other formal pre-trial documents

designed to frame the case. The issue was only tangentially referred to in the course of evidence. Counsel for the McLaughlins made

no mention of the point at all in his closing submissions, and despite the fact that counsel for the Receiver and BOS drew attention to

the fact that no submissions had been made in relation to it, and suggested that the inference to draw from that fact was that it was

not being pursued, no reply was made. In that latter context, it is important to note, as counsel for the Receiver and BOS fairly

pointed out during the appeal, that in the course of an oral hearing, it is to be expected that counsel may omit to mention something

that should have been dealt with. No court should impose an over-technical approach in these matters. But this is not a case of an

inadvertent failure to mention a point. It is a case where the fact that the point was not pressed was drawn to the court's attention

without any intervention on the McLaughlins' side to suggest that the Receiver and BOS were mistaken if they believed that the point

was no longer being pursued.

4.14 Against that background, it is hardly surprising that the trial judge dealt very briefly with the matter in the course of his

judgment, where he said at para. 47:-

"There is just one other topic that I should refer to even though it was not pressed as an issue. These loans were

advanced for property development purposes. When they were advanced there was an expectation that the sale of one

of the mortgaged properties Latona on Torquay Road, Foxrock would see the loans repaid. There has been a suggestion,

which has never really been spelled out that because it has not been possible to sell Latona or the other properties that

the bank was not entitled to call in the loans. Because the point has not been pressed I do not propose to say too much

about this, save to say there does not appear to be any basis for suggesting that the bank was obliged to stand back

indefinitely because of the difficulty in disposing of Latona and indeed the other properties."

4.15 It would, in my view, be entirely reasonable for the Court, in those circumstances, to decline to entertain any points concerned

with the "Latona" issue at all. The point was not on the table when the trial commenced because it had not been placed there by the

McLaughlins. It was only dealt with in a very tangential and highly imprecise way in the evidence. It was not pursued in closing

despite the fact that, in substance, the McLaughlins had that fact drawn to their attention and made no comment. In those

circumstances, the trial judge was more than entitled to treat the point as having been abandoned. Against that background, there

would be a strong case for suggesting that the point cannot now be relied on at all.

4.16 However, in deference to the difficulties with which counsel for the McLaughlins was faced, and in the light of the fact that the

trial judge did, in any event, go on to briefly consider the matter, I think it is appropriate that I should set out the reasons why I do

not consider that this point had any merit in the first place. In that context, the starting point has to be the terms of the loan

facilities.

5. The Facility Letters

5.1 The original loan agreement in respect of "Latona" is dated the 12th May, 2005. A number of aspects of the terms of that facility

letter need to be noted. On page 3, under the heading "Term of Agreement/Expiry of Loan", it is said that "This agreement shall

expire 8 months after the date of first drawdown of the loan. Please note that this date may change in accordance with the

provision of Paragraph 5(a)(iii) of the Standard Conditions, Appendix 1".

5.2 Next, on the same page and under the heading "Security", the following is included at item (i):-

"Letter of Undertaking from Borrowers Solicitors to clear existing mortgage (to be properly identified) and to hold the

title deeds to the principal private residence at ‘Latona’, Torquay Road, Foxrock, Dublin 18 to the order of Bank of

Scotland (Ireland) Limited, and on closing of the sale of property at ‘Latona’, Torquay Road, Foxrock, Dublin 18, to

discharge this Bank of Scotland (Ireland) Bridging Term Loan account in full".

The other security provisions concern the putting in place of a legal charge.

5.3 Insofar as the matter was raised at all before the High Court, the argument made seems to have been that all subsequent loan

agreements were not truly new and separate agreements at all, but rather were simply renewals (sometimes with minor revisions) of

the existing arrangements. I am prepared, for the purposes of the argument, to accept that point in favour of the McLaughlins.

However, that point is only of some relevance if it can be said that the original agreement, as specified in the facility letter just cited,

can in some way be said to impose different terms to the subsequent facilities.

5.4 Two things seem to me to be absolutely clear from that facility letter. First, it is for a specified period of time being, in that case,

eight months from draw down. Second, there is nothing in the text of the agreement to suggest that the only means of repayment

can or must be from a sale of "Latona". Rather, what the agreement says in its terms is that the McLaughlins' solicitor is to give an

undertaking to pay off the loan on closing the sale of "Latona". That is a standard clause, the meaning of which is very obvious. It

does not require any particular expertise in banking to understand its terms. The clause is under the heading "Security". It is,

therefore, designed to provide the bank with security for its loan. The security is in the form of a professional undertaking by the

McLaughlins' solicitors that they would retain, out of the proceeds of sale of "Latona", so much as was necessary to discharge the

loan, and pay that sum over to (then) BOSI to pay off the loan in full. If, for example, "Latona" had been sold well within the eight

month period of the loan, then that term would have required those solicitors, on foot of the undertaking, to pay it off early. But that

term does not in any way require or imply that the loan was not to be repayable in the event that "Latona" was not sold.

5.5 There is nothing, therefore, in the terms of the original facility letter which suggests that BOSI had to wait until "Latona" was sold

in order to be repaid. It was, indeed, the case that BOSI had to wait for eight months. In the absence of a breach of some other term

of the agreement justifying early intervention, it would not have been open to BOSI to seek repayment within that eight month

period, except to the extent of calling on the relevant solicitors to discharge their undertaking in the event that the property was

sold. But there is nothing in that agreement to suggest that BOSI was not entitled to repayment in full after eight months irrespective

of whether "Latona" was sold. Indeed, the existence of a specific period of eight months is completely inconsistent with the

suggestion that the proper interpretation of the facility letter is that BOSI had to wait until "Latona" was sold, whenever that might

be. Furthermore, it would be highly surprising, if there were to be an agreement which required a lending institution to wait until a

property had been sold in order to be entitled to repayment, that there would not have been detailed arrangements as to what was

to happen in the event that difficulties were encountered in the sale.

5.6 Be that as it may, it seems to me to follow that the question of whether there was, or could have been, any variation in the

arrangements between the parties brought about as a result of subsequent facility letters does not arise. The original facility letter

was for a specified period, and was most assuredly not one which required BOSI to wait until "Latona" was sold before the money

could become due. Even if no change had been brought about by any subsequent security letters (which not only extended or

renewed the term of the loan but also provided in some cases for additional facilities for other projects), the original facility letter

does not give any assistance to the argument which the McLaughlins make under this heading.

5.7 That is not, of course, the end of the matter. The next question concerns the evidence given in relation to this assertion.

However, that evidence must be seen against the backdrop of the fact that the written terms of agreement between the parties

entitled BOSI (and, therefore, arguably BOS after the cross-border merger) to full repayment when the term of the relevant facility

ran out. It is, of course, the case that further facility letters, extending the period of various loans for specified terms, followed. Each

subsequent facility letter was, again, stated to be for a specific term, although the length of the terms varied. So far as the facility

letters themselves are concerned, their meaning is clear. BOSI/BOS was prepared, from time to time, when a facility expired, to renew

it by affording an additional facility for a further period of time. But there is nothing in any of those facility letters which suggests that

BOSI/BOS was committing itself to continuing with the facility beyond the additional period agreed in the event that "Latona" was not

sold during the relevant period. The backdrop to a consideration of the evidence must, therefore, be that, on the proper

interpretation of the facility letters, BOSI/BOS was entitled to call in the loan at the end of any of the periods specified in the various

facility letters. Those facility letters did not give to the McLaughlins any entitlement to any further extensions in the event that

"Latona" was not sold.

5.8 The reason for emphasising that fact is to attempt to identify the legal basis for any argument to the effect that there was an

agreement or arrangement or understanding, legally binding, between BOSI/BOS and the McLaughlins, to the effect that the various

loans did not have to be repaid unless and until "Latona" was sold. Any such arrangement would have to have been collateral to the

written facility letters. While it is, of course, the case that a court may, on the evidence, conclude that there was some agreement

or understanding of sufficient certainty and clarity so as to vary the written terms entered into between the parties, it would be

necessary, in order to establish that such a situation existed, that a very clear evidential and legal basis be put forward for

suggesting that the written terms which had been signed up to by both parties did not apply.

5.9 It might, for example, be suggested that there was a sufficient level of specific agreement entered into between the parties to

effect an oral variation in the terms of their written contract. It might be suggested that the conduct of a lender created an

estoppel. Perhaps other legal bases might also be advanced. But each of the legal bases on which it might be argued that the Court

should depart from the written terms of a contract require that very specific facts be clearly established on the evidence.

5.10 It is in that context that it must be recalled that no legal basis for departing from the terms of the written contract was, in fact,

advanced at the trial at all. The height of the McLaughlins' case stemmed from a number of comments made in the course of the

evidence of Mr. McLaughlin and evidence given during the cross-examination and re-examination of Mr. Carney for BOS. I propose to

deal with the evidence of Mr. Carney first. Mr. Carney did accept, during re-examination, that it was his understanding that the earlier

loans (i.e. those prior to 2008) did have a term which postponed the bank's entitlement to call in the loans until "Latona" had been

sold. However, he suggested that that term was no longer present after 2008. There can be no doubt but that Mr. Carney was

incorrect in his recollection of the terms of the facility letters. No such clause existed. No realistic interpretation of the facility letters

could imply the presence of such a term. However, it might be that a trial judge might infer from the evidence of Mr. Carney that,

despite his being mistaken about the terms of the written agreements, there was some understanding at some time between the

parties about the postponement of repayment until "Latona" had been sold.

5.11 Next, it is necessary to turn to Mr. McLaughlin's evidence. When questioned about the specific term of months set out in the

2008 facilities (which were the facilities which, on the case made by BOS, were the operative facilities), Mr. McLaughlin said that that

term needed to be seen in the context of the fact that there had been many renewals in the past. While that much is true, it does

not seem to me to advance the McLaughlins' case at all. The fact that a lending institution may be prepared, from time to time, to

renew facilities does not, certainly of itself, create any legal obligation on that financial institution to renew them again. Indeed, the

suggestion that there could be any such legal obligation is entirely inconsistent with the fact that each renewal was itself for a

specified period of time and was subject, in the event that there was to be a further renewal, to still later facility letters, which

themselves were for specific periods of time. That pattern of periodic renewal for a specified period of time is, quite frankly, entirely

inconsistent with the suggestion that the lender was under any continuing obligation to extend the loans beyond the repayment dates

specified in the current facility.

5.12 Next, Mr. McLaughlin suggested that everyone knew, at the time when the original loan was extended, that the only means by

which the McLaughlins might repay the loan was the potential sale of "Latona". That may well be the case. There may well be all sorts

of assumptions made by the parties to a lending contract as to how the loan will be repaid. To take an absolutely simple case, a

standard mortgage over 25 or 30 years may operate on the assumption that it will be repaid out of the income of the borrower

deriving from what appears to be relatively secure employment. Everyone might well understand that the borrower would find

considerable difficulty (if not impossibility) in meeting the repayments if they were to lose their employment and not be able to secure

alternative work. But that is a far cry from suggesting that the lender would be obliged to refrain from calling in the loan just because

the parties would have understood that the only means by which the loan could be repaid was if the borrower continued in

employment. It is, of course, the case that codes of practice now oblige lenders to attempt to work through difficult periods such as

the one which I have postulated. But that is a very different thing from a suggestion that, as a matter of the contractual terms

between the parties, a lender is obliged to refrain from seeking to enforce a loan simply because the means, which might have been

assumed to be the way in which the loan would have been repaid, no longer exist.

5.13 The height of the evidence was, therefore, to the effect that there might have been some sort of vague understanding or

acceptance by the parties that some latitude might be given to the McLaughlins in the event that there was difficulty in selling

"Latona". However, it must be emphasised that the sort of evidence which would have been needed, to establish a legal obligation on

the part of the bank to refrain from calling in the loan until "Latona" had been sold, would have been altogether different from the

evidence presented in this case. Vague assertions would have been a long way short of sufficient. The Court would need to have

been satisfied of precise commitments given on behalf of the lender, on the basis of which the Court could assess whether those

commitments amounted to an alteration in the legally binding rights and obligations of the parties appearing in the facility letters.

Vague assumptions or "understandings" cannot displace the effect of written terms signed up to by the parties. A lot more is required

to alter the legal effect of a written contract.

5.14 It is in that context that the finding of the trial judge, to which reference has already been made, must be viewed. Precisely

because the matter was not pressed, it is not at all surprising that the trial judge dealt with it as briefly as he did. But if the matter

had been pressed, then an argument would have to have been advanced on behalf of the McLaughlins as to the precise legal basis on

which it was said that the terms of the facility letters had, in substance, been varied by some form of collateral agreement or

conduct. The evidence would need to have been assessed on the basis of seeking to identify whether the legal requirements thus

arising had been met. None of that was done. In substance, the finding of the trial judge amounted to no more than a general

comment that, even if there were some form of understanding or arrangement, and even if (which, for the reasons already set out, is

far from necessarily the case) that understanding or arrangement altered the legal rights and obligations of the parties, the evidence

fell a long way short of establishing a commitment to refrain indefinitely from enforcing the loan until "Latona" was sold.

5.15 It is in that latter context that the final point under this heading arises. It concerns the suggestion that, perhaps, BOSI/BOS

might have been entitled to insist on a sale, but if so doing, it would have to have foregone any entitlement to recover any shortfall.

There is just nothing in any of the facility letters or in the evidence to suggest that BOSI/BOS had ever agreed to any such

arrangement. It would, again, require very clear evidence of a legally binding commitment on the part of a lender (to the effect that a

loan was non-recourse) to impose such an obligation where the written agreement between the parties does not make such lack of

recourse clear. Parties do, of course, sometimes enter into non recourse loans. But such loans are usually carefully negotiated

between borrowers and lenders and include very specific terms as to the precise recourse which the lender is or is not entitled to

invoke. There is nothing of that sort to be found in any of the facility letters in this case. There is nothing in the evidence to suggest

that any representative of BOSI/BOS ever agreed to any such arrangement. The height of the evidence was an assertion by Mr.

McLaughlin as to what might be the consequence of the loan being called in at a time when the value of "Latona" was not sufficient

to pay off the entirety of the sum then due. But such an assertion falls a very long way short indeed of the kind of evidence which

would be needed to entitle a court to find that, contrary to the terms of a facility letter, a loan was truly a non-recourse loan, or

that a lender was estopped from pursuing recourse beyond the assets secured by the loan.

5.16 Finally, I should not leave this aspect of the case without making one further comment. Counsel for the McLaughlins, not

unreasonably, drew attention to the fact that it may well have been in the interests of BOSI/BOS at various stages to give the

McLaughlins more time. That may well have been the case. If a borrower has no other means of repayment then, irrespective of

whether any shortfall remains technically due and owing, a bank may face the risk of having to write-off, in practise, some of its debt

if a secured asset is not worth enough to pay off the loan. Depending on the view of the market for an asset of the relevant type at

the time in question, it may well make sense for a lender to wait, even if not legally obliged so to do.

5.17 But that is not the issue with which this Court is faced. This is not a question of whether it might or might not have made

business sense for the lender to wait. It probably did. The issue for this Court is whether, in circumstances such as those which arise

in this case, the lender is legally obliged to wait. It was suggested on behalf of the McLaughlins that, ultimately, the matter became

something of a joint venture in the sense that it was in the interests of both lender and borrower to wait. Again, there may have

been times when this was the practical reality. But this was not, in any sense, truly a joint venture. Obviously, any lender has an

interest in getting back all, or as much of, the loaned money as possible. There may be many cases where it makes sense to work

with a borrower in difficulty to attempt to achieve such a result. In that type of circumstance, both sides can benefit. The lender will

recover more (or perhaps all); the borrower will be left with a smaller residual debt (or perhaps none).

5.18 But that practical fact does not alter the legal rights and obligations of the parties which are to be found in their contractual

arrangements. This was not a case where the lender had "bought in" to a venture in the sense of contractual arrangements which

allowed the lender any additional benefit from its success. It must be recalled that there can be such arrangements. So called

mezzanine finance involves an arrangement in some form which gives a lender or investor a greater return if the venture succeeds

beyond specified parameters. Likewise, perhaps, and depending on the terms, a lower return may have to be accepted if the venture

proves unprofitable. But in a straightforward lending transaction, such as the one at issue in this case, the lender does not get any

additional benefit no matter how successful the venture is. If the property crash had not occurred, and "Latona" had sold for a

spectacular price, then, quite properly, the sole beneficiaries would have been the McLaughlins. BOSI would not have received an

extra cent. But the flip side of that arrangement is that BOSI was entitled, in the absence of any clearly defined term to the contrary,

to get back the money loaned in accordance with the terms of their agreement.

5.19 For the reasons already set out, the facility letters did not impose any contrary obligation. I am more than satisfied that the trial

judge was not only entitled to but, indeed, obliged to find that there was far from sufficient evidence from which he could conclude

that some form of legally binding collateral agreement, or other arrangement with legal effect, was in place such as would have

prevented BOSI/BOS from enforcing what would otherwise be their entitlements under the terms of the facility letters. On that basis,

the appeal under this heading would necessarily have failed, even if it were permissible for the McLaughlins to run such a point in the

light of the manner in which the case was conducted in the High Court. I next turn to the question of the effects of the cross-border

merger.

6. "Assets" and the Cross-Border Merger

6.1 As noted earlier, the issue which arises under this heading is relatively net. The McLaughlins gave security over several properties

in favour of BOSI at the time when the relevant lending transactions took place. It is BOS which has sought to enforce that security

by appointing the Receiver. It follows that, in order for the Receiver to be properly appointed, BOS must now have the benefit of that

security. In simple terms, the McLaughlins argue that the relevant cross-border merger has not had the effect of transferring the

benefit of the security in question from BOSI to BOS.

6.2 The cross-border merger was made under the European Communities (Cross-Border Mergers) Regulations 2008 (S.I. No. 157 of

2008) ("the Irish Regulations") in Ireland and the Companies (Cross-Border Mergers) Regulations 2007 in the United Kingdom. The

orders approving the merger in this case were made by the High Court (Kelly J.) on the 20th October, 2010, and, so far as Scotland is

concerned, by the Court of Session on the 10th December, 2010. The effect of those orders was to ensure that all assets and

liabilities of BOSI were transferred to BOS at 23:59 on the 31st December, 2010, and that BOSI then stood dissolved without

liquidation and ceased to exist.

6.3 As pointed out by the trial judge, the central assertion made on behalf of the McLaughlins is that the relevant security does not

constitute "an asset" within the meaning of Council Directive 2005/56/EC of the 26th October, 2005 on cross-border mergers of

limited liability companies (O.J. L310/1 25.11 2005) ("the Directive"). There was, before the High Court, some question of seeking to

join the Attorney General for the purposes of questioning the validity of the Irish Regulations, but that point was not pursued before

this Court.

6.4 A starting point must be to consider the terms of the Directive itself. It is abundantly clear from the terms of Recitals (1) to (3)

that the overriding purpose of the Directive is to facilitate cross-border mergers of limited liability companies governed by the laws of

different member states. It is the very fact that difficulty would be encountered in attempting to secure the merger of corporate

entities whose governing law is different that led to the desirability of the Directive in the first place. In the context of that overriding

objective, it would indeed, as the trial judge suggested, be surprising if the way in which the Directive was formulated was such that

it had the effect of not transferring securities held by one of the merging entities. While it is true, as counsel for the McLaughlins

argued, that legislation, even European legislation which is required to be interpreted with significant regard to its purpose, may

sometimes fail to achieve its object because of the means adopted, nonetheless it would require very clear wording to the contrary to

create a situation where such an important part of the business of a particular type of company (i.e. any financial institution involved

in secured lending) was not to transfer on foot of an otherwise valid cross-border merger. Indeed there could be similar consequences

in the case of any company whose business includes reliance on security, such as, for example, commercial guarantees in the case of

trading companies.

6.5 It must be recalled that one of the consequences of such a merger is that one or more of the entities involved are likely to cease

to exist. Where, as here, the entity which ceases to exist (being BOSI) is the one in whose favour security is held, then it follows

that, if the argument put forward on behalf of the McLaughlins is correct, that security can no longer be held by BOSI (because it has

ceased to exist) nor by BOS (because it was not transferred). Thus it must, in substance, be accepted that a consequence of the

McLaughlins' argument is that the involvement of a company holding security in a cross-border merger may lead to that security

simply ceasing to have effect by virtue of it being neither capable of being owned by an entity which has ceased to exist, nor being

transferred to another entity which is to continue in existence in the aftermath of the relevant merger. It cannot be doubted that

such a result would have a consequence which was the direct opposite of the intention of the Directive (being to facilitate cross-

border mergers). It would mean, in effect, that, despite there being no intention to be found to that effect in the wording of the

Directive, the cross-border merger regime would have little or no application in the case of secured lenders.

6.6 It is then necessary to turn to what the substantive measures provided for in the Directive actually say. Article 2(2)(c) provides

that a "company, on being dissolved without going into liquidation, transfers all its assets and liabilities to the company holding all the

securities or shares representing its capital". In this case, BOSI was, by virtue of the court orders to which I have referred, dissolved

without going into liquidation, and it follows that all of its "assets" and liabilities were to be thus transferred.

6.7 Article 14 deals with the consequences of cross-border mergers. It provides as follows:-

"1. A cross-border merger carried out as laid down in points (a) and (c) of Article 2(2) shall, from the date referred to in

Article 12, have the following consequences:

(a) all the assets and liabilities of the company being acquired shall be transferred to the acquiring company;

(b) the members of the company being acquired shall become members of the acquiring company;

(c) the company being acquired shall ceased to exist.

2. [...]

3. Where, in the case of a cross-border merger of companies covered by this Directive, the laws of the Member States

require the completion of special formalities before the transfer of certain assets, rights and obligations by the merging

companies becomes effective against third parties, these formalities shall be carried out by the company resulting from

the cross-border merger.

4. The rights and obligations of the merging companies arising from contracts of employment or from employment

relationships and existing at the date on which the cross-border merger takes effect shall, by reason of that cross-

border merger taking effect, be transferred to the company resulting from the cross-border merger on the date on

which the cross-border merger takes effect."

6.8 Regulation 19 of the Irish Regulations is in similar form. It provides as follows:-

"19.(1) Subject to paragraph (2), the consequences of a cross-border merger are that, on the effective date-

(a) all the assets and liabilities of the transferor companies are transferred to the successor company,

(b) [...]

(c) the transferor companies are dissolved"

6.9 The argument put forward on behalf of the McLaughlins came down to the following. It was said that security is not an asset.

Reference was made to one of the documents which is required to be put in place by merging entities for the purposes of cross-

border merger applications. The Directive requires that so-called "common draft terms" be published, which are intended to protect

the interests of both the shareholders of the merging entities and third parties. Those common draft terms are required to include

"information on the evaluation of the assets and liabilities which are transferred to the company resulting the from the cross-border

merger". (See Recital (5) and Article 6(2)(c) of the Directive).

6.10 The evaluation to which reference has been made was, in this case, conducted on the basis of the balance sheet of BOSI as of

31st December, 2009. It was said that an examination of that balance sheet does not disclose that any securities are included as an

asset. It is true that there is no specific line in the relevant balance sheet attributing any particular value to an asset in the form of

security.

6.11 However, as counsel for the Receiver and BOS pointed out, those same accounts contain a clear statement of the accounting

practice adopted. It is my understanding that the accounting practise mentioned is standard practice in accordance with relevant

national and international accountancy requirements. In that context, it is necessary to say something about the nature of a secured

loan. When a lending institution lends money to a borrower, normal accounting practice requires the accounts of the institution

concerned to reflect the value of that loan by calculating the value of the anticipated receipts to be derived from the repayment of

the loan (with interest) on the dates specified in the loan contract. That calculation does not, of course, have any particular regard

to whether the loan is secured or not, or indeed, to the strength of any security. What appears on the balance sheet of the relevant

financial institution is the value of the loan thus calculated. In the ordinary course, and provided that the loan is performing as

planned, that sum will be recalculated each year to reflect any payments made and a value arrived at of the continuing payments

expected to be made in accordance with the loan contract.

6.12 However, if the loan runs into trouble, then different considerations apply. There has, indeed, been a debate about whether

previous accounting standards were sufficiently robust to deal properly with the way in which financial institutions ought to deal with

potentially unperforming loans. But the debate about the precise mechanism to be employed, important though it is in other contexts,

is not relevant for the purposes of this case. What is relevant is that a lending institution is required, in the context of a loan which

may, in accordance with the relevant standards, need to be looked at because of doubts over whether the loan will be capable of

being properly repaid, to re-evaluate the sum to be included in its balance sheet in respect of the loan in question. That requires an

assessment to be made as to whether, and if so to what extent and when, some or all of the loan may be capable of being repaid. In

that context, it is only common sense that security may potentially loom very large. A loan secured on a house which is valued at

90% of the sum outstanding must have a much greater likelihood of repayment (and thus value) than an entirely unsecured loan given

to a borrower who no longer has the capacity to repay. Lending institutions are required to make provision in their accounts for any

anticipated shortfall in the recovery of monies loaned.

6.13 The mechanism for determining when that exercise should be done has been the subject of review. But the broad requirement

that such an exercise must be carried out has always been part of standard accounting practise. It simply reflects the fact that a

lending institution has a much better chance of getting back some or all of the money advanced on a loan to an impecunious or

financially troubled borrower where that borrower has provided significant security compared with a similar loan given on an unsecured

basis. Even if, for example, in the latter case, a bank might be able to obtain judgment, convert that judgment into a judgment

mortgage, and ultimately secure a sale of property for the purposes of seeking to repay its debt, that process could take a long time,

might cost a lot of money and the bank might also find itself jostling in a queue of other unsecured creditors seeking payment. The

whole point of security is that it puts the security holder at the head of the queue, at least so far as the relevant asset is concerned.

The consequence of that fact is that the secured creditor is much more likely to be repaid. That, in turn, means that a proper

assessment of the amount that needs to be written down in the lender's accounts to reflect the problematic nature of a loan may be

significantly less in a case where the loan is secured than a case where a loan, which is otherwise identical, is unsecured.

6.14 Thus, while security does not form a separate line in a company's balance sheet, the availability of security has the potential to

have a significant effect on the valuation of the loans which do form part of that balance sheet, at least in cases where loans run

into trouble and where the lender has to rely on its security for the purposes of recovering the loan.

6.15 It must also be recalled that the only statutory purpose for the inclusion of information such as the balance sheet in the common

draft terms is to provide an evaluation of the assets and liabilities of the relevant companies rather than to provide a list of those

assets. That process does not, in any event, take away from the clear statutory language, to be found both in the Directive and the

Irish Regulations, which requires that all assets be transferred.

6.16 I am not satisfied, therefore, that a failure to refer to security in the common draft terms would have affected the transfer of

securities as an asset on the completion of the merger. The cross-border merger has been approved by the relevant courts. Unless

and until (if it were to prove procedurally possible) those orders were annulled in some way, the cross-border merger remains

effective and all of the assets are to be considered to have been transferred to the party contemplated by the merger

documentation.

6.17 Even if there were some failure of proper inclusion of security in the common draft terms, it would not follow that a security

asset not included was not thus transferred. Whether such a failure, if sufficiently significant, could or should lead to a revisiting of

the validity of the cross-border merger itself is not a matter which was canvassed before this Court. However, I am not satisfied that

the documentation fails to include security in any event. Provision had been made against loans in the relevant balance sheets. That

provision would, in accordance with standard accounting practice, have included calculations which required an assessment to be

made of the likelihood of recovering the loans in question. That assessment would, in turn, have required detailed consideration to be

given to the status of any security. Indeed, as we are all aware from the experience of the National Assets Management Agency,

many loans which were required to be transferred to that agency from the various banks concerned were valued at significantly

reduced sums precisely because there was concern about the adequacy of the security for the loans in question.

6.18 The ordinary meaning of the term "asset", in the context of a company, must refer to any element of its business which has the

potential to confer value. A non-performing loan will have its value significantly affected by the adequacy of any security. Security

has the potential to significantly affect the value of any loan. It is, therefore, on any view, an asset in the sense in which that term

is used in the Directive.

6.19 In passing, it is worth mentioning that the standard accounting practise adopted by BOS in this case is stated to have operated

on the basis of making an individual assessment of the likely recoverability of large loans with a global or average assessment being

made in respect of smaller loans. It can hardly be doubted that an individual assessment would necessarily involve looking at the

security held. Likewise, any global assessment of a package of smaller loans would necessarily involve attributing considerable

significance to whether the loans were secured or not and, indeed, some assessment of the average strength of any security in

place.

6.20 As previously indicated, a result of the proper interpretation of the Directive and the Irish Regulations which led to the

conclusion that an extremely important part of the practical business of a lending institution (and, indeed other companies) was not

to be transferred in the context of a cross-border merger would be highly surprising. Such an interpretation could only be reached if

there was clear wording in the body of the relevant measures which could lead only to an interpretation which had that effect. On

the contrary, an analysis of the meaning of the term "asset" leads to the conclusion that it clearly includes security backing up loans,

which loans themselves are part of the assets of the relevant lending institution. The security has the potential to have a significant

effect on the value of those loans. It is, in that context, clearly an asset. The company is better off with the security than it would

be if it had not security in place. For those reasons I am satisfied that it is absolutely clear that, amongst the assets which passed

from BOSI to BOS on the cross-border merger coming into effect, was whatever security BOSI held in respect of loans which were

transferred at that time.

6.21 In that context, it is finally necessary to note that, at the hearing of the appeal, counsel on behalf of the McLaughlins

suggested that this Court might refer two questions to the Court of Justice under Article 267 of the Treaty on the Functioning on the

European Union. The questions suggested were as follows:-

"1. Are the references to "all … assets" of a transferor company in Article 2(a)(c) and Article 14(1)(a) to be interpreted

according to the terms of the Common Draft Terms prepared pursuant to Article 5 and, in particular, by reference to

the "information on the evaluation of the assets and liabilities which are transferred to the company resulting from the

cross-border merger" contained therein as required by an pursuant to Article 5(k)?

2. Are the references to "all … assets" of a transferor company in Article 2(a)(c) and Article 14(1)(a) to be interpreted

as including (a) all contingent assets of the transferor company and all rights enjoyed by the transferor company under

every contract, agreement or instrument to which the transferor company is a party and (b) all such contingent assets

and rights even where no information as to their evaluation is contained in the Common Draft Terms?"

6.22 It is true, as counsel for the McLaughlins pointed out, that the Court of Justice has made it clear that the requirements of the

uniform application of European Union law requires that the terms of a provision of Union law, which makes no express reference to

the law of a member state, must normally be given an autonomous and uniform interpretation throughout the community (see Case C-

55/02 Commission v. Portugal [2004] ECR I-09387 at paras. 44 and 45). In that context, counsel for the McLaughlins made reference

to a list included in Van Gerven, Cross-Border Mergers in Europe (Oxford, 2010), which sets out a description of the way in which

"assets and liabilities" are specified in the implementing measures adopted in the member states. But all of those implementing

measures use the term "assets". For the very reason pointed out by counsel for the McLaughlins, that term must be given an

autonomous meaning in European Union law. But that meaning must be consistent with the purpose of the Directive as a whole. It is

not just financial institutions which would suffer difficulty in availing of the provisions of the cross-border merger regime if legal

entitlements such as securities were not to be included in the definition of assets. Many trading companies, for example, hold

guarantees of one sort or another for debts owed to them by their trading partners. Such a guarantee does not appear on the

balance sheet of the company concerned as a separate item. However, no one could doubt but that availability of an enforceable

guarantee could have a real effect on the recoverability of a debt owed by, for example, an insolvent corporate entity. If it were to

be said that the autonomous interpretation of the term "assets" in European Union law was such that it did not include such

guarantees, many ordinary trading companies would thus lose out by availing of the cross-border merger regime.

6.23 I cannot see that there is any sustainable argument to suggest that the term "assets" as used in the Directive does not cover

the benefit of legal entitlements which have the capacity to enhance the overall value of the company, if only because they reduce

the extent to which it may be necessary to write down the value of debts owed to that company (whether in the form of loans or

otherwise), by providing an effective alternative means of payment.

6.24 I am satisfied that, at least insofar as it is relevant to the issues which arise in this case, the terms of the Directive are clear or,

in the words of the jurisprudence, constitute an "acte clair" (case 283/81 CILFIT Srl v Ministero della sanita [1982] E.C.R. 3415).

While, for the reasons already analysed, there is no specific mention of security as a separate line in the balance sheet contained in

the common draft terms, nonetheless the availability of security has an effect on that balance sheet by virtue of reducing the extent

to which it is necessary to make provision against non-performing loans. The fact that the relevant loans are secured has, therefore,

an effect on that valuation by potentially reducing the provision which needs to be made in respect of non-performing loans. Even if,

therefore, it were necessary to interpret the term "assets" by reference to the common draft terms, that would not exclude securities

from being properly considered to be assets, for security affects the valuation of non-performing secured loans. In making that point,

I should not be taken to accept, in any event, that it is necessarily appropriate to interpret the term "assets" by reference to the

common draft terms. The purpose of the inclusion of an assessment of the assets of a company in those terms is to provide a

valuation rather than to list the assets themselves. There is nothing, therefore, in my view, to suggest that the common draft terms

could alter the clear statutory language contained in the Directive which is to the effect that "all assets" are to be transferred.

6.25 In those circumstances, it seems to me that the McLaughlins' appeal under this heading should be dismissed, and that it is not

necessary to make the reference sought. I next turn to the issue concerning the registration of the charge in the name of BOS.

7. The Need to Register BOS as Owner of the Charge

7.1 In relation to this issue, I agree with the judgment to be delivered by Laffoy J. and have nothing to add.

8. The Remaining Issues

8.1 What remains to be dealt with are the issues which were canvassed in the written submissions filed on behalf of the McLaughlins,

but which were not the subject of oral argument before this Court.

8.2 Most of those issues were concerned with the validity of the appointment of the Receiver. The first such issue concerned the

appointment of a Ms. Whitmore as an authorised signatory. That argument was raised before the High Court. The trial judge set out

the relevant provisions from the security documentation in question between paras. 26 and 32 of his judgment. Thereafter, at paras.

33 and 34, he reviewed relevant case law. At paras. 37 and 38, the trial judge reviewed the specific documents relating to the

appointment of Ms. Whitmore. Leaving aside the careful analysis by the trial judge of the chain of documentation which led to his

conclusion that Ms. Whitmore had been properly appointed, Birmingham J. also held, at para. 39, that he "would, without question,

have concluded by reference to Ms. Whitmore's evidence that she was acting as agent of the bank and that her actions had been

approved by the bank and ratified by the bank. The bank knew full well what she was doing and approved of it". In my view, that is

the end of the point. There was more than ample evidence on which the trial judge could have concluded that Ms. Whitmore had

actual authority on the part of BOS. This is not, it must be recalled, a dispute between BOS and someone purporting to act on its

behalf as to whether that person acted within the scope of their authority. This is a dispute between a third party and BOS in which

BOS stands over the authority of the person who has purported to act on its behalf, and does so in circumstances where there was

more than sufficient evidence to entitle the trial judge to hold that BOS had, by its actions, authorised the actions concerned.

8.3 A power of attorney, or any other formal type of authorisation was not necessary provided that, in truth, the relevant officer or

employee was, in fact, authorised. On the basis of the trial judge's findings of fact, there can be no doubt but that this was the case.

I would, therefore, reject the McLaughlins' appeal on that ground.

8.4 A second leg of the argument as to the validity of the appointment of the Receiver stemmed from the suggestion that, even if Ms.

Whitmore had been lawfully appointed as an authorised agent, she was not authorised to execute deeds. The argument under this

heading is that the power of attorney relevant to this case included a choice of law clause whereby English law applied to its

construction. Evidence was called on behalf of the McLaughlins to the effect that, under English law, the power to execute a deed

must, itself, be conferred by deed. However, that witness, an English solicitor called Mr. Singleton, agreed that, as the mortgage and

charge in this case contained a choice of law clause in favour of Ireland, the question of whether a document purporting to appoint a

Receiver was valid was a matter of Irish law. However, as the trial judge pointed out, the passage from the deed in this case already

cited permits the appointment of a Receiver to be made either by deed or under the hand of a duly authorised officer or employee. In

that context, I am satisfied that the trial judge was correct to conclude that, as a matter of Irish law, the appointment of the

Receiver in this case did not have to be made by deed. Likewise, I am satisfied that the trial judge was correct to hold that a written

document signed by an authorised officer or employee was sufficient to meet the requirements for the appointment of a Receiver

even if it were to transpire that the relevant signatory did not have authority to execute a deed and the document purported to be a

deed. Even though it is not a validly executed deed, the document is still in writing and signed by a person with authority.

8.5 It follows that neither of the technical points made concerning the validity of the appointment of the Receiver in this case are

meritorious. The trial judge correctly determined that the Receiver was properly appointed. In my view, counsel for the McLaughlins

was quite correct to rest his argument in respect of those points on the written submissions.

8.6 The final point raised in the written submissions suggested that the trial judge was wrong to conclude that a letter from Byrne

Wallace, Solicitors, of the 19th April, 2012, satisfied the requirement under the relevant contractual arrangements between the

parties that a notice must be served specifying a breach, and informing the McLaughlins of that breach and what had to be done to

remedy it. This aspect of the case was dealt with by the trial judge between paras. 5 and 9 of his judgment. The case made in the

written submissions, placing reliance on a passage from Bowstead & Reynolds, The Law of Agency, 19th Ed.(London, 2010) at p. 48,

was that an agent could only carry out acts on the part of a principal if the relevant act did not involve a right conferred personally

on the principal, "the exercise or performance of which requires discretion or special personal skill". But the act carried out by Byrne

Wallace in this case was not to make a decision to call in the loan, but rather to act on the instructions of their clients, BOS, to

communicate the calling in of the loan to the McLaughlins. As the trial judge pointed out, the act of demanding payment, on the

instructions of a client, is a very different thing to the type of situation contemplated in the passage from Bowstead & Reynolds cited.

I am, therefore, also satisfied that the trial judge was entirely correct in the conclusions reached on this point, and that the appeal of

the McLaughlins, in that regard, must also be dismissed.

9. Conclusions

9.1 For the reasons set out in this judgment, I am satisfied that this appeal should be dismissed. While it would be proper to reach the

conclusion that the "Latona" point urged on this appeal was, in substance, not pursued in the High Court and should not be permitted

to be pursued in this Court, I am, nevertheless, satisfied that it is a point of no merit in any event.

9.2 Likewise, I am satisfied that the security held by BOSI over the McLaughlins' properties was an asset of BOSI within the meaning

of the Directive, which passed, on the coming into effect of the relevant cross-border merger, to BOS. I also agree with the judgment

to be delivered by Laffoy J. in respect of the point raised concerning the registration or otherwise of charges over registered land as a

result of a cross-border merger.

9.3 Finally, I am satisfied that none of the points which were canvassed in the written submissions, but which were not argued at the

oral hearing, are of merit. I would, therefore, dismiss the appeal.