The High Court has refused two injunction applications in a dispute over ownership of the Ibis Red Cow Hotel, finding that the plaintiffs had raised serious issues to be tried but had not shown that an injunction was needed to prevent a significant risk of injustice.
The applications were brought by Duddy Hospitality Ireland Holdings Limited and Brendan and Lawrence Duddy. They sought to prevent changes to the boards of companies controlling the hotel and to stop receivers from selling it. Mr Justice Rory Mulcahy delivered his judgment on 9 April 2024. He had indicated on 22 March 2023 that both applications were refused; the written judgment set out his reasons.
The plaintiffs allege that Propiteer Group companies and individuals breached agreements intended to transfer ownership of the hotel or its owning companies to them. They say the defendants failed to use reasonable efforts to secure lender consent or refinancing, and pursued a strategy to gain control of the hotel. The defendants deny wrongdoing. They contend that the plaintiffs’ entitlement was conditional and that required refinancing conditions were not met.
The court found an arguable case that obligations under the agreements could have been breached through DADAC Limited, a company the plaintiffs say was used to acquire the Fairfield loan facility. It also found an arguable case that changes to company boards breached the agreements. Those questions, including whether the agreements remained enforceable and DADAC could be liable, were left for trial. The judgment did not decide the underlying contractual dispute or determine the allegations of misappropriation raised by both sides.
The court held that the dispute was commercial and that any loss could, in principle, be compensated with damages. It was not persuaded that the plaintiffs had a special interest in the hotel beyond their commercial investment, or that the defendants would be unable to meet a damages award. The plaintiffs remained free to bid for the hotel in the receivers’ sale process. The judge also considered that restraining the receivers could risk prejudice to the defendants, including through possible enforcement against other Propiteer Group assets.
The judge said the plaintiffs had not delayed in a way that would have justified refusing relief, and that the disputed evidence did not establish a lack of clean hands sufficient to deny an otherwise justified injunction. Those points did not alter the outcome: both injunctions were refused. The court directed that the case be listed on 16 April 2024 to set directions aimed at an early hearing and consider ancillary orders.