The High Court has adjourned a dispute over rent from a Leeson Street guesthouse, leaving the money in an escrow account while Allied Irish Banks plc (AIB) seeks further court orders.
Mr Justice Ryan said the court could not decide the renewed application on the basis AIB proposed. The bank was not a party to the original interpleader proceedings, which Derek Byrne brought because both his landlord, Desmond Killoran, and receiver Tom O’Brien claimed the rent. Byrne had been paying it into escrow since 1 January 2013.
The case had previously been argued on the basis that O’Brien was appointed receiver by Allied Irish Finance Ltd (AIF). On the resumed hearing, the parties addressed evidence that AIF’s assets and liabilities had transferred to AIB in 2007, before the relevant receiver appointment. The judgment records that O’Brien and the bank accepted his appointment as receiver was invalid because AIF no longer had the power to appoint him.
AIB instead relied on its position as mortgagee and on O’Brien’s separate appointment as its agent to take possession of secured properties and collect rent. The court said AIB’s claim required several steps, including joining the bank to the proceedings, addressing the invalid receiver appointment and rectifying a 2009 mortgage deed that named AIF rather than AIB.
Mr Justice Ryan said the deed’s named mortgagee was not merely a mistaken label: AIF was the intended party, but the wrong party in light of the earlier transfer. He considered formal rectification necessary and declined to order it within the interpleader case. He said AIB might have a prima facie entitlement to the rents, but that its new claim raised issues beyond the procedure and case previously before the court.
The judge did not decide who is ultimately entitled to the rent. He said it would be unjust to pay the escrowed money to Killoran, who had not succeeded in his claim, while AIB’s further applications remained unresolved. Byrne must continue paying rent into escrow. If AIB succeeds in new proceedings, O’Brien as its agent may become entitled to receive it; if it does not, entitlement will still have to be decided.
The application was adjourned until further proceedings are determined or the court makes another order.