The High Court has dismissed deferred claims over security held by First Active plc on property owned by Salthill Properties Limited, and dismissed Kanwell Developments Limited’s well charging proceedings against Salthill.
In a judgment delivered on 17 July 2009, Mr Justice Clarke held that a clause in Salthill’s debentures created a first fixed charge over immovable property Salthill acquired after entering the debentures. The charge applied immediately when such property became vested in Salthill, the court said, and operated independently of any crystallisation of the debentures’ floating charge.
The dispute concerned three Galway development parcels known as Lot C2, Lot A2, or the M & G Triangle, and Lot M. Salthill and Kanwell argued that conveyancing events could mean interests in those parcels remained with or later became vested in Salthill, free of First Active’s security. First Active disputed their account and argued that the debenture terms covered any such after-acquired interests.
The judge did not decide the contested conveyancing questions. He said they were irrelevant to the outcome: even if Salthill and Kanwell’s account were correct, any relevant interest that became vested in Salthill was immediately subject to the fixed charge under clause 4.1.6. He also found it unnecessary to determine issues concerning crystallisation or possible de-crystallisation of the floating charge, or First Active’s alternative arguments under clauses 4.1.5 and 4.1.14.
Kanwell had registered judgment mortgage affidavits against Salthill’s assets and sought a well charging order. The court said Kanwell’s interest could extend no further than Salthill’s, and the judgment mortgages ranked behind First Active’s existing charge. It therefore found that a well charging order would be redundant.
The order dismissed the deferred aspects of the linked main proceedings and the Kanwell well charging proceedings. The judgment did not set out a monetary award.