The High Court has refused Danske Bank’s application to have a dispute over security for loans connected with the Clearstream Court development heard as a preliminary issue. The court said the application came too late and declined to determine the underlying priority dispute.
The proceedings were brought by liquidator Aidan Garcia and Panshire Limited, which is in liquidation. Their claims include allegations under company law concerning proceeds from apartment sales at Clearstream Court in Finglas, Dublin 11. Those claims have not been decided in this judgment.
The Bank asked the court to decide whether its security ranked ahead of any claims or interests asserted by the applicants in the development and its sale proceeds. It also sought an order that, if the answer were yes, the proceedings be struck out. The application was made by motion dated 19 October 2015.
For the purpose of the proposed preliminary issue, the parties admitted that the Bank lent money to Mark Kilkenny, not to Panshire, and held a mortgage over Mr Kilkenny’s interest in the development lands. They also admitted that the Bank received apartment sale proceeds, including part of the amounts attributed to building agreements with Panshire, and applied them to reduce Mr Kilkenny’s loan debt.
The Bank argued that its mortgage covered the completed development and gave it priority over the apartment sale proceeds. The applicants disputed that interpretation and argued that the Bank’s conduct and the structure of the sales raised issues about the nature and effect of its security. They also argued that the dispute was unsuitable for preliminary determination and that the Bank had delayed its application.
Mr Justice Hedigan found that the Bank could have sought a preliminary hearing from the time the case entered the Commercial List. The court noted that the Bank’s position on its security had been set out in an affidavit in January 2015, but it did not bring this application until October. In the interim, directions had been before the court on nine occasions and another preliminary issue had been tried.
The judge said parties in the Commercial Court were expected to proceed with expedition and that multiple applications to determine issues piecemeal were undesirable. He refused the application. The judgment did not decide whether the Bank’s security had priority, whether the applicants’ claims under section 139 could succeed, or whether the proceedings should be struck out. The court said it would make orders to bring the case on for trial as soon as possible.