The High Court has refused James Ryan’s application for an interlocutory injunction to stop a bank-appointed receiver taking steps over two commercial properties in Limerick and Kenmare. The court said Ryan had not shown an arguable case for the relief sought. The ruling did not concern a receiver over his family home, and it left open arguments in any later court application to seek possession of that home.
The judgment, delivered by Ms Justice Baker on 29 April 2014, concerns commercial premises known as Franciscan Hall, at 1 Henry Street and 2 Sarsfield Street in Limerick, and registered lands at Kenmare Holiday Village, County Kerry. Danske Bank A/S, named in the judgment as trading as “Dankse Bank”, appointed Stephen Tennant receiver over the registered lands in November 2013 and the unregistered premises in January 2014.
Ryan sought to restrain Tennant from acting as receiver and to prevent the bank from taking steps under loan agreements. He argued that the bank had to engage fairly with his proposals to address arrears, including an offer to pay €40,000 and a proposed self-managed sale of the Limerick premises. He also alleged the bank had engineered a default to call in the loans. Those were Ryan’s claims; the judge said there was no cogent evidence that the receivers had been appointed for a reason other than the loan arrears.
The judgment records that Ryan’s commercial loans had been performing until August 2013 and his home loans until October 2013. The bank sent demands concerning the Kenmare loans in October and November 2013, and the Limerick loans in November. Baker J noted a period of serious illness and a gap in communication, but found no evidence of bad faith by the bank.
For the injunction application, the judge accepted that Ryan had an arguable case that he was a personal consumer entitled to the Consumer Protection Code. She held, however, that the Code did not give him a standalone cause of action against the bank. It could be relevant when a court exercised discretion over possession, but that was not the application before her.
Baker J said the bank had a contractual right to appoint a receiver after demand, subject to an implied obligation to act fairly and honestly and not capriciously or in a way that unfairly prejudiced the borrower. She rejected the proposed broader duties to consult Ryan, act in his interests or provide a hearing before enforcement. The court did not decide any duties that might arise if the bank or receiver later sold the properties.
The bank had not appointed a receiver over Ryan and his wife’s principal private residence in County Limerick. The judge said a sale of that home would require a court order for possession unless the parties agreed otherwise, and that Ryan could rely on the MARPS code in such proceedings. She refused the injunctions sought.