Man fails to stop sale of €3m Spanish villa

In a judgment today, Mr Justice Senan Allen agreed the Spanish court had exclusive jurisdiction in the matter. File picture: iStock

A man has failed to get High Court orders preventing the sale of his Spanish villa bought for €3m 14 years ago.

Joe Donovan sought the injunctions against a company which bought the mortgage loan for the villa, Calle Wagner, Sierra Blanca, Marbella, Malaga, from the National Assets Management Agency (Nama).

OCM Emru Debtco DAC, with registered offices at Merrion Square, Dublin, argued the Irish court had no jurisdiction in the matter and was bound by an order of a Spanish court, acknowledged by both sides to be a final order, for the sale by public auction of Calle Wagner.

In a judgment today, Mr Justice Senan Allen agreed the Spanish court had exclusive jurisdiction in the matter.

He said the appropriate order was one declaring the Irish court recognises the judgment given by a court in Marbella in favour of OCM for mortgage foreclosure on foot of a December 2009 mortgage deed, secured by the villa property.

He said he would also make a declaration the High Court has no jurisdiction to hear or determine Mr Donovan's challenge to the validity of the security held by OCM in respect of the property or his claim for damages.

Formal orders will be made after the parties have considered the judgment.

Earlier, the judge noted Mr Donovan, Richmond Road, Kingston-upon-Thames, UK, bought the villa in 2006 with a €3m loan from Anglo.

Shortly before the purchase, he gave a general power of attorney to his Spanish lawyer and his ownership of the property was registered in the Land Registry of Marbella as was a form of mortgage in favour of Anglo, dated December 15, 2009.

Around January 28, 2018, he received a letter from OCM saying, inter alia, it had acquired the mortgage loan from Nama in July 2016.

OCM claimed the balance outstanding on the mortgage was €3.55m and, invoking Spanish law, demanded payment of the full amount within seven days failing which mortgage foreclosure proceedings would issue.

On April 5, 2018, OCM commenced foreclosure proceedings in a Marbella court.

Mr Donovan had instructed a Spanish lawyer to contest those but, while the lawyer entered an appearance on behalf of Mr Donovan, he did not contest the proceedings.

In the meantime, Mr Donovan brought criminal proceedings in Spain against some directors of IBRC, Anglo's successor in title, in special liquidation, and against his former Spanish lawyers who had signed the mortgage form of December 15, 2009.

He claimed the power of attorney provided to those lawyers was limited to completing the loan documents and purchase of the villa and did not authorise execution of the mortgage. He claimed his signature had been forged on a later document purporting to confirm the authority of the attorney to sign the mortgage.

Mr Donovan sought to stay the civil proceedings pending the outcome of the criminal proceedings.

However, on July 16 last, the Spanish court confirmed an auction decree made in respect of the property as final.

Mr Donovan, represented by Martin Hayden SC, with Hugh McDowell BL, initiated his High Court proceedings against OCM on September 2 and got an urgent hearing of his injunctions application because he believed the sale of the property was imminent.

OCM, represented by James Doherty SC, with John Lavelle BL, brought a counter application arguing the proceedings should be dismissed or stayed on grounds the Irish court had no jurisdiction in the matter.

Mr Donovan had claimed he could not be bound by the Spanish court's jurisdiction because that derived from a mortgage document which was not signed by him and not validly executed on his behalf. He also claimed security over the Spanish property for his "purported indebtedness" was released in 2007 by Anglo by an agreement made in Ireland.