The High Court has ordered Lynette Williams and Edward Fahy to permit a receiver to enter into possession of Barry’s Hotel at 1 Great Denmark Street, Dublin. The order was based on the receiver’s right, as agent of Ravenshaw Limited, to possession under a tenancy agreement with White Lace Limited.
The ruling followed an application by receiver Declan Taite under section 316 of the Companies Act 1963. The court had already made a consent order in December 2010 declaring valid the 2001 debenture over Ravenshaw’s assets and Taite’s appointment as receiver and manager. The issue left for decision was whether he could obtain possession of the hotel.
White Lace granted Ravenshaw a “Short Term Business Letting Agreement” on 4 July 2011 for four years and nine months, at annual rent of €200,000. Taite argued that the agreement gave Ravenshaw a right to possession. Fahy resisted, arguing that the agreement was invalid because Ravenshaw did not own all of White Lace’s shares and because the 1999 share purchase involved unlawful financial assistance under section 60.
Justice Laffoy rejected those arguments. She held that the share purchase agreement transferred all White Lace shares to Ravenshaw in 1999, and that neither Fahy nor his wife, Jane Fahy, had a beneficial interest in them. The judge found the evidence offered for a claimed 10% beneficial interest insufficient and inconsistent with company filings. She also held that the 1999 transfer of shares was not a transaction directly involving White Lace that could be set aside under section 60(14). The 1999 loan and mortgage debenture had been repaid or were not relied on by the receiver in seeking possession.
The judge concluded that the receiver had power under the 2001 debenture to procure the tenancy agreement and, as Ravenshaw’s agent, was entitled to possession for the term it created. The order directs Williams and Fahy to permit entry. It does not determine any separate claim concerning a later letting to Mark Ralphe & Partners: Fahy had raised that in an earlier affidavit, but did not pursue it at the hearing.