The High Court has granted interlocutory injunctions to a receiver seeking to carry out a receivership over a property at Fairgreen Industrial Estate, Trim, Co. Meath. The court found a fair question to be tried about the receiver’s appointment and entitlement to exercise his functions, but did not finally decide those issues at this stage.
The application was brought by insolvency practitioner Tom Kavanagh against property owner Seamus Murphy. Mr Kavanagh had been appointed receiver by Bank of Scotland in April 2014 over property charged as security for a loan. The bank later assigned its interest in the loan and security to Ennis Property Finance Limited.
The loan facility, agreed in 2003, was for up to €725,000. A demand for €705,071.45 was made in April 2014, and no payment followed. The judgment records evidence that no loan repayments had been received since September 2010 and that no rent had been paid to the receivership since the receiver’s appointment.
The receiver said he had been obstructed in performing his duties and sought prohibitory and mandatory injunctions. Mr Murphy disputed that the receiver had been validly appointed, challenged the authority of the bank signatory, and argued that he had not consented to the assignment. He also said the property was insured and subject to a lease, and that it provided his income and pension fund. The receiver disputed the asserted basis for occupation. The judgment recounts differing claims about the occupier and the lease, and notes that no lease was attached to the letters described in the evidence.
Applying the interlocutory injunction test, the court said the mandatory relief sought was ancillary to the primary prohibitory relief and that the receiver did not have to meet a higher “strong case” threshold. It held that a fair, bona fide question existed about the appointment and the receiver’s entitlement to act. It noted that the loan security, unpaid demand and contractual provisions concerning receiver appointments and assignment were not disputed, while Mr Murphy’s objections concerned formalities and consent. The court expressly left factual and legal questions for trial.
On damages, the court considered that Mr Murphy would not be able to meet a substantial judgment and costs, and noted an earlier judgment referring to further significant indebtedness to another financial institution. On the balance of convenience, it said sale of the property to discharge the debt and continuing interest was in both parties’ interests. The court said the receiver’s undertaking as to damages was supported by his position as a member of a significant accountancy firm. It then granted the orders sought. The judgment does not set out the terms of those orders.