The High Court dismissed negligence claims brought by Austin Kenny against receiver Tom Kavanagh and rejected defamation claims brought by Kenny and Alan Farrelly. The judgment, delivered by Ms Justice Costello on 25 February 2015, concerned three properties in Greystones, County Wicklow, placed in receivership over loans from ACC Bank.
Farrelly and Kenny claimed Kavanagh should not have accepted his appointment and had mishandled the properties and tenants. They argued, among other things, that he should have carried out works before selling and that the properties were sold for too little. The court heard that the Cleevaun development had planning, fire safety, title and tenancy difficulties, and that completing required works was estimated to cost €355,000, excluding VAT.
The court found that Kavanagh had no obligation to improve the secured properties before sale. It also found that the evidence did not establish that the properties were sold below value. Lisney, the appointed agent, had advised on the sales, and the court accepted evidence that the €430,000 price for Cleevaun was a strong one. Kenny had provided no valuation evidence to challenge that assessment.
The judgment also rejected the challenge to Kavanagh’s appointment. The plaintiffs alleged that their signatures on a 2009 mortgage were obtained through undue influence by their solicitor. The mortgage had not been set aside, the bank was not a party to the case, and there was no evidence the bank or Kavanagh knew of the alleged undue influence. The court therefore proceeded on the basis that the mortgage and appointment were valid.
On defamation, the plaintiffs relied on an engineering report about the absence of a fire safety certificate, emails concerning a proposed auction, and Kavanagh’s continued description of himself as receiver. The court found no evidence that Kavanagh published the emails or that the report was published to someone who read the disputed passage and formed a negative view. It also said the report was published by Lisney, with no evidence it acted as Kavanagh’s agent. The court noted that the report was correct when written and that a certificate was later produced. It found no defamation in Kavanagh continuing to act as receiver while his appointment remained in force.
The court rejected the remaining complaints about management, tenants, expenses, an electricity disconnection and alleged conflict of interest. It said the receiver’s primary duty was to the bank and found no evidence that fees were improperly incurred or that Kavanagh breached a duty owed to Kenny. An earlier order had limited Farrelly’s claims because he was an undischarged bankrupt. The final order dismissed Kenny’s claims and both plaintiffs’ defamation claims.