The High Court has restrained a receiver from acting over commercial units in County Cork after finding that their registered owners had an arguable case that the lender lacked power to appoint him.
In an interlocutory application, Ms Justice Baker held that a 2015 transfer of the charge to Gulland Property Finance Limited had not been registered. Under section 64(2) of the Registration of Title Act 1964, she said, the transfer did not confer an interest in the charge until registration. The owners had therefore made out an arguable case that Gulland could not use the charge’s contractual power to appoint Stephen Tennant as receiver.
The dispute concerns units on lands in Folios 118347F and 152304F, County Cork. The plaintiffs, brothers Michael Harrington and Anthony (otherwise Tony) Harrington, are registered owners as tenants in common. The properties were subject to a charge originally held by Anglo Irish Bank Corporation. The loan facilities were later transferred to Gulland, which appointed Tennant in February 2016.
The court did not decide the case at trial or finally determine the validity of the appointment. It considered only whether an interlocutory injunction was justified pending the substantive proceedings. The judge said the plaintiffs had established an arguable basis for treating the receiver as a trespasser, and that damages would not be an adequate remedy for them. She found the balance of interest favoured the plaintiffs.
The defendants also relied on the plaintiffs’ failure to disclose the 2003 facility letter on the earlier, without-notice application. That letter set July 2012 as the repayment deadline. Justice Baker considered the omission material, but not sufficiently serious to outweigh the case for an injunction, given evidence that the bank and its successor may have continued dealing with the facilities as though the deadline had been extended or was not binding.
An interim injunction had been granted on 18 March 2016, with rent collected from the properties to be held by the plaintiffs’ solicitor. The court continued the injunction, restraining Tennant from acting as receiver over the lands. The judge said the question of ongoing rent payments remained unresolved and invited submissions from counsel on how they should be handled.