The High Court has ruled that the transfer of a ferry charter to Fabjoll Limited was invalid because the vessel’s owner had not consented. But the court also found that Galtee Plant Hire Limited could not take control of the ferry before a 14-day period it had given for a replacement to be found had expired.
The decision, delivered by Ms Justice Murphy on 1 July 2016, addressed two preliminary questions in a wider dispute arising from the liquidation and receivership of companies involved in Waterford Castle Hotel and Golf Course. The court considered whether the plaintiffs had standing to bring the proceedings and whether the charter of the ferry Loreley had been validly assigned from Cendant Limited to Fabjoll.
Cendant had chartered the Loreley from Galtee under a five-year agreement made in January 2012. The vessel provided access to Little Island, where the resort’s hotel, lodges and golf course were located. After Cendant entered liquidation and receivership in 2013, its liquidator purported to assign the charter to Fabjoll, which was managed by receiver Eoin Ryan. Galtee objected and later said the charter had been terminated.
The court rejected Galtee’s arguments that the plaintiffs lacked standing. It found Fabjoll had prima facie standing because it held the purported assignment when proceedings began; the assignment’s ultimate invalidity did not retrospectively remove that standing. It also found Ryan could bring the case as receiver because of the close connection between the ferry charter and the secured assets, which depended on ferry access. Ryan was also an appropriate person to seek urgent relief when events on 27 September 2013 raised a public safety concern. The court said director Noel Simpson could face claims in tort, even though he was not personally party to the contract.
On the assignment, the court held that this charter was not assignable without Galtee’s prior consent. The ongoing obligations to pay hire and maintain, insure and license the vessel meant the owner’s interests could be affected by who took over as charterer. The assignment to Fabjoll was therefore invalid and of no effect.
The court found Cendant’s breaches, including substantial unpaid hire, entitled Galtee to terminate the charter. However, after treating with the plaintiffs, Galtee’s letter of 16 September gave them 14 days to find another ferry. The court held Galtee could not resile from that notice and take control on 27 September. Once the period expired on 1 October, Fabjoll’s continued presence on the vessel amounted to trespass, the court said.
The ruling was a preliminary determination, not a final resolution of all claims or remedies. The court said it would hear from the parties about what should follow from its finding that the assignment was invalid.