The Court of Appeal has upheld the refusal of an interlocutory injunction sought by Pat Ryan and Phil Monaghan to stop a receiver marketing or selling partnership property in Dublin 2. The court found a fair issue to be tried over whether Dengrove DAC was entitled to appoint the receiver when it did, but concluded that the appellants had not established grounds to restrain a sale pending further proceedings.
The dispute concerns commercial development property at City Quay, Gloucester Street and Moss Street, owned by two partnerships in which Ryan and Monaghan have interests. Dengrove holds security over the assets. The parties disagree sharply about the debt attributable to the facilities: the appellants put the relevant redemption sum at about €17.3 million, while Dengrove’s position was that the secured liabilities exceeded €430 million.
Ryan’s 2018 action against Dengrove went to trial in October 2019. On the third day, they signed a settlement providing for an open-market sale by the partners, with the proceeds applied according to agreed terms. The required partner majorities approved the sale. The agreement gave six months for the sale process, with provision for the parties to agree an extension; if the sale was not completed, they would seek a resumed hearing and the settlement would cease to have legal effect.
The planned sale did not complete. Ryan said the Covid-19 pandemic delayed it and disputed that he had stalled the process. Dengrove said the sale had stalled indefinitely. The Court of Appeal noted that the jointly appointed solicitors had advised that, unless certain charges were released, the sale should proceed by Dengrove as mortgagee in possession. Ryan had not agreed to that approach. No extension of the settlement period had been sought before Dengrove appointed a receiver on 25 June 2020.
Ryan and Monaghan then brought proceedings seeking to restrain the receiver. The High Court refused the interlocutory relief in September 2020. On appeal, the Court of Appeal accepted that there was a fair issue about the settlement’s effect on Dengrove’s right to appoint a receiver. It nevertheless held that the evidence did not establish that a receiver-led open-market sale would reduce the price or otherwise cause compensable loss. The court also said the appellants had not shown that damages would be inadequate or that the balance of justice favoured an injunction. It rejected the argument that a demand for payment was required before the receiver’s appointment.
The appeal was dismissed, leaving the refusal of the injunction in place. The court also declined to interfere with the High Court’s costs order against the appellants. Its view on costs was provisional: the appellants could seek a separate hearing by notifying the Court of Appeal office within seven days of the judgment.