The High Court granted interim orders allowing two receivers to take control of lettings and income from parts of the St Angela’s College student residences in Co Sligo, pending trial of the action. It did not make a separate order granting them possession of the property.
In a judgment delivered on 31 August 2011, Ms Justice Laffoy found that the receivers had been validly appointed under mortgages held by Bank of Scotland and Irish Life & Permanent. For the purposes of the interlocutory application, she was satisfied that they had power to take possession of the respective secured property. She said the defendants had not shown a fair issue to be tried that their refusal to provide access did not amount to trespass.
The first receiver, Tom Kavanagh, claimed rights over 21 residential units, common areas and ancillary buildings under the Bank of Scotland security. The second, Fergus Lowe, was appointed over another 21 units under Permanent’s mortgage. The residences form part of a development described in the judgment as four apartment blocks with 72 units and facilities including a convenience store, gym, laundry and administration building.
The defendants, Jeremiah Lynch and St Angela’s Student Residences Limited, disputed the receivers’ entitlement. Lynch said the mortgaged property was held on behalf of a partnership in which he claimed a 60% interest, and raised objections to Kavanagh’s appointment and the scope of the security. He also argued that the company owned furniture, equipment and the treatment plant. The judge said ownership of disputed items and the final extent of the secured property could not be determined on this interim application. She said items claimed by the defendants that could not be removed without damaging the buildings should remain pending agreement or trial.
Laffoy also considered Lowe’s appointment as receiver of rents and profits, finding that the mortgage conditions implicitly gave him powers to take possession of the 21 units to carry out that role. She noted that Permanent had received €30,450 from rents for those units during the 2010/11 academic year under an arrangement with Lynch, but had decided he should no longer collect the income.
The court ordered, pending trial, that the defendants not remain in or obstruct access to the relevant property or interfere with the receivers’ functions. It also ordered delivery of keys and access devices, records concerning the property and tenants, and restraint against impeding collection of rents and fees. The orders were made on the receivers’ undertakings as to damages. The court said a separate order granting possession was unnecessary to maintain the status quo. It left the underlying disputes for trial.