The High Court refused a receiver’s application to strike out a counterclaim by Dominic Gallagher concerning the receiver’s appointment and sale of an industrial unit. The court said disputed facts about the appointment and its later ratification required a trial. It did not decide whether the appointment or sale was valid, or whether damages were due.
The dispute arose after the receiver obtained an interlocutory order in November 2013 directing Gallagher to deliver up possession of the unit. The order recorded the receiver’s undertaking to abide by any damages order the court might make. The receiver discontinued his claim in March 2015 without applying to discharge that undertaking.
Gallagher’s counterclaim, delivered in November 2014, alleged negligence and trespass in connection with the sale and challenged the receiver’s appointment and power of sale. The receiver sought to strike it out, arguing, among other grounds, that it disclosed no reasonable cause of action and was an abuse of process. He relied on the deed of appointment, security documents and a Bank board resolution in August 2015 that he said ratified his appointment.
Justice Tony O’Connor said Gallagher had a credible basis to challenge how the deed was executed, including in light of an earlier judgment involving the Bank. The effect of the later resolution was also disputed. The judge said the court had to take the counterclaimant’s case at its height on a strike-out motion, and that the receiver could not rely on a presumption of due formality to resolve the disputed issues at that stage.
The court refused the strike-out motion and directed the parties to exchange information and submissions ahead of a plenary hearing on the counterclaim. It also proposed that the receiver pay the defendant’s expenses for the relevant period, excluding costs of the 2013 interlocutory application, and invited counsel to address costs of the unsuccessful motion. The judgment set out proposed orders and directions and stated that counsel would be heard on them.
A postscript records that on 26 June 2019, after counsel informed the court that the parties had settled, the court by consent struck out both the claim and counterclaim with no further order. The judgment does not record a decision on the disputed appointment, sale or damages.