The High Court has restrained a lender and a receiver from taking steps under a disputed receivership over a Glenageary property used by a crèche, pending the trial of the case.
In a judgment delivered on 12 November 2020, Ms Justice Nuala Butler granted interlocutory relief to Emma Thompson and Beautiful Minds Crèche and Montessori Ltd. The court found fair issues to be tried over whether the company had a tenancy binding on the lender and whether the receiver’s acceptance of his appointment extended beyond the property covered by the appointment deed.
The judgment does not decide those issues or declare the appointment invalid. The court also did not need to decide whether the receiver’s appointment itself raised a fair issue to be tried, and left that question open for the substantive proceedings.
The dispute concerns no. 2 Upper Eden Road, where Thompson and the company operate a crèche. The lender, Promontoria (Aran) Ltd, held security over properties at both no. 2 and no. 4 Upper Eden Road. It appointed Stephen Tennant as receiver over no. 2, described in the appointment deed as a portion of the mortgaged property. However, the receiver’s acceptance referred to acting as receiver of the mortgaged property, which the mortgage deed defined as both properties. The plaintiffs argued that this mismatch raised a question about the scope of his authority.
The plaintiffs also argued that the company’s rent payments to Promontoria, which the court accepted were evidenced in bank statements, could support an implied tenancy. The defendants disputed that a tenancy binding on them existed. The judge said it was unnecessary at this stage to decide whether a new tenancy had arisen.
The court heard that the crèche served about 55 children and employed 16 staff. The plaintiffs argued that taking possession could end the crèche’s operations at the premises and disrupt childcare and employment. The judge considered the balance of convenience in favour of interim relief, noting that potential losses to the defendants from delay could be assessed in damages and that the evidence did not establish that the plaintiffs’ undertakings as to damages were insufficient.
The order restrains the defendants from taking steps pursuant to the purported receivership, pending trial. It does not prevent Promontoria from bringing separate proceedings to enforce its security. The judge said the detailed wording of the order could be addressed with the parties if necessary.