The High Court declared that Paul McCann was validly appointed receiver over Elektron Holdings Limited and Crossplan Investments Limited, and was entitled to take possession of properties owned by the companies.
Mr Justice Michael Peart ruled that “close of business” in the companies’ demand letters meant the end of the banking business day. The letters required payment by close of business on 17 February 2012. The receiver’s appointment documents were signed at 4pm that day.
The companies were in receivership after loans from Irish Nationwide Building Society, whose rights had transferred to Irish Bank Resolution Corporation (IBRC). The borrowing totalled €25 million. Most funded Crossplan’s purchase and redevelopment of Merrion Hall, on Merrion Road in Dublin. Elektron used about €1 million to refinance existing borrowing and guaranteed Crossplan’s loan. Director Patrick Halpin personally guaranteed loans to both companies.
The receiver sought directions on whether his appointment was valid. The companies’ directors, Patrick Halpin and Anne Keane, argued that the appointment was premature because 4pm was earlier than the ordinary meaning of “close of business”. They submitted that the bank’s doors remained open beyond 4pm and that the companies should have had until 5pm or 5.30pm to pay. They did not claim the companies could have paid if given that extra time; the judgment records that both were hopelessly insolvent.
The judge found that the phrase was flexible and depended on the business context. In a banking context, he said, it could reasonably mean no later than 4pm, the traditional time banks closed to customers. He did not decide the bank’s separate argument that it could have appointed a receiver after making demand and before the stated deadline.
The court also noted that the respondents had abandoned their earlier contention that Aberdeen Lodge, which Elektron owned, was their family home. The judge said the dispute could be decided as a matter of contract, without relying on constitutional protection of the home.
Mr Justice Peart granted a declaration that the receiver had been validly appointed over both companies and was entitled to take possession of their properties. He said he would hear counsel on other requested relief if necessary, while indicating it might no longer be required.