The High Court directed a statutory receiver appointed over Poppyfield Retail Park in Clonmel and West City Retail Park in Ballincollig to apply income and sale proceeds under the borrowers’ loan arrangements. It also ruled that unpaid rent belongs to the receivership, while West City service-charge arrears must be kept for tenant or other existing claims.
The application was brought by receiver Declan Taite under section 316 of the Companies Act 1963, with notice given to the four borrowers named in the judgment. The judgment was delivered by Ms Justice Laffoy on 15 August 2013. The receiver sought directions on how to allocate income and possible sale proceeds between the loan facilities, whether he could recover rent arrears, and how to handle service-charge money held by West City Estate Managers Limited.
For Poppyfield, the court directed that income and any sale proceeds first go towards the borrowers’ liability for the Poppyfield Facility. Any surplus may then be applied to Facility 2 for West City, which was also secured on Poppyfield.
For West City, the receiver may apply income and any sale proceeds to Facility 1 and Facility 2 in whichever order he considers best for National Asset Loan Management Limited (NALM). The court rejected the borrowers’ asserted entitlement to require that Facility 2 be paid first.
The court also held that the receiver may recover unpaid rent that accrued before his appointment, as well as rent accruing afterwards, from tenants at both properties. He must apply those rent receipts according to the same directions for Poppyfield and West City income.
Service charges were treated differently. The court said the available evidence did not establish what claims West City tenants might have against service-charge money held by the management company, or whether the company had a beneficial claim to some or all of it. The receiver was directed to take control of the money held in the company’s name and keep it in a separate account pending an inquiry into those claims. It could not be used for NALM’s benefit while claims remained unresolved.
The formal order requires West City service-charge arrears, including money held by the management company, to be applied towards the borrowers’ obligations to West City tenants or other existing obligations. The court said it could give further directions if needed once the factual position was established.