The Supreme Court has dismissed an appeal by Patrick Halpin and Ann Keane over the appointment of a receiver to Elektron Holdings Limited and Crossplan Investments Limited, both in receivership.
The appeal concerned whether the receiver was validly appointed by Irish Bank Resolution Corporation Limited (IBRC) on 17 February 2012. The High Court had declared the appointment valid. The appellants argued that IBRC’s demand letters allowed payment until “close of business” that day, so the receiver could not be appointed at 4pm.
The letters, dated 15 February 2012, demanded payment forthwith. They said that if payment was not received by close of business on 17 February, IBRC reserved the right to enforce its security, including by appointing a receiver. The aggregate demanded from Elektron was €986,397.90; the corresponding demand to Crossplan was €25,170,660.24. The appellants received the letters on 16 February.
The Supreme Court agreed with the High Court that, in this banking context, “close of business” meant the end of IBRC’s banking business day. It accepted that this was 4pm. The Court also rejected the argument that “by 4pm” required IBRC to wait until after 4pm before enforcing its security: 4pm was the deadline, and the power could be exercised once that deadline was reached without payment having been received.
The judgment referred to evidence that at a meeting that morning, IBRC officials told Halpin that next steps would follow after 4pm. A witness statement from an IBRC case manager said the receiver was appointed with effect from 4pm, and that no payment or offer to pay had been received. The Court’s conclusion rested on the meaning of the deadline and the non-receipt of payment.
The receiver had been appointed under security documents over assets of both companies. The Court held the appointment valid on the issue argued in the appeal and dismissed the appeal. It did not decide IBRC’s separate argument that it could have appointed a receiver after making demand but before 4pm. It also expressed no view on the so-called “mechanics of payment” test or the legal effect of the demand letter beyond what was necessary to decide the appeal.