The High Court has ordered The Property and Investment Company (SE) Limited to provide security for the receiver’s costs of proceedings over property at Grange, Balrothery West. The order was made under Order 29, rule 1 of the Rules of the Superior Courts after the court found the company had not shown it could pay those costs if the receiver succeeded in defending the action.
The ruling, delivered by Mr Justice Keane on 15 May 2015, concerned an application by receiver George Maloney and the Governor and Company of the Bank of Ireland. They sought security under the Companies Act 1963 or, alternatively, under the court rules, and also sought a stay pending provision of security.
The company’s underlying proceedings, begun by plenary summons in February 2014, seek to restrain Mr Maloney from trespassing on the property and challenge the validity of a 2007 charge and the bank’s 2014 deed appointing him receiver. The company says it became the property’s registered owner in March 2013 after a transfer from Jeremiah Donovan. The judgment records that the receiver and bank asserted the charge had been granted by Mr Donovan and that the receiver had been appointed to realise the security. The court was deciding the security application, not the underlying ownership and charge dispute.
Mr Maloney presented evidence that the company’s 2013 abbreviated accounts showed total fixed assets of £150,000 and net assets of £1. The receiver’s estimated costs of defending the proceedings were £199,432.50. The company responded with unaudited accounts for August 2014, claiming net assets of £200,001, including a £150,000 property and a £200,000 shareholding in Canview Limited.
The court noted that, at the hearing, the company accepted that the property listed as its tangible asset was the same property at the centre of the case. The remaining evidence of its ability to meet the receiver’s costs was its Canview shareholding. The receiver’s accountant raised concerns about transactions involving Canview and other companies, the basis for a substantial revaluation of Canview’s assets, and the lack of supporting details. Those concerns were submissions supported by affidavit evidence; the court did not make findings resolving the underlying transactions.
Mr Justice Keane found that the receiver had established the company would be unable to pay his costs if he successfully defended the action. He was not persuaded by the company’s unaudited accounts and the director’s uncorroborated statements, noting the absence of audited accounts, bank statements or other independently verifiable evidence. He ordered security for the receiver’s costs. The judgment does not quantify the security ordered or state that the proceedings were stayed.