The High Court ruled that Kieran Wallace, acting as receiver for Ashcoin Ltd., had no standing under the debenture to pursue Moriarty Holdings Ltd. for a disputed share of a grant payment. The decision resolved a preliminary issue of law; it did not determine whether Ashcoin was entitled to the money or prevent other recovery steps on its behalf.
Sustainable Energy Ireland agreed in April 2007 to make a grant to Moriarty Holdings for a housing development at Spicers Mill, Balbriggan, County Dublin. Ashcoin, which provided engineering solutions for energy-efficient dwellings, alleged that Moriarty Holdings agreed in June 2007 to share the grant proceeds equally. Sustainable Energy Ireland paid Moriarty Holdings €328,500 in June 2008, but the alleged share due to Ashcoin remained unpaid and disputed.
Ashcoin’s December 2007 debenture charged its debts other than book debts in favour of Ulster Bank Commercial Services Ltd., and also created a first floating charge over the company’s property and assets. The debenture holder appointed Wallace as receiver on 20 June 2008. Moriarty Holdings argued that any sum owed to Ashcoin would be a book debt excluded from the debenture, leaving Wallace without standing to bring the proceedings.
For deciding the preliminary issue, Mr Justice Hogan assumed that Ashcoin could prove the alleged agreement and entitlement to half the grant proceeds. He concluded that the claim would be a book debt: it arose from Ashcoin’s trading activity and the provision of services, and the grant had already been paid to Moriarty Holdings. The court’s ruling concerned the character of the alleged debt under this debenture, not whether the sharing agreement existed or what amount, if any, Ashcoin could recover.
The court held that the proceedings were improperly constituted and that Wallace could not maintain them as receiver under the debenture. Hogan expressly left open the possibility of other steps being taken on Ashcoin’s behalf to recover the money.