The High Court has refused an application to restore Allenton Properties Limited to the companies register, declining to facilitate a lender’s proposed appointment of a receiver over a Naas site where a purchaser had built a home.
In a judgment delivered on 16 November 2021, Ms Justice Butler held that Promontoria (Oyster) Designated Activity Company had not established that restoration would be “just and equitable” under section 738 of the Companies Act 2014. The purchaser, whose interests could be seriously affected, had not been notified of the application or given an opportunity to be heard.
The company was dissolved in 2014 for failing to file annual returns. Its sole fixed asset was a site at 22A South Main Street, Naas, County Kildare, subject to a mortgage originally held by Ulster Bank. Promontoria acquired the loan and related security in 2016 and applied in July 2019 to restore the company so it could seek to appoint a receiver and enforce the security.
The court accepted that Ulster Bank had consented to a 2013 sale of the site. The purchaser paid the price to her solicitor and entered possession, then built a dwelling. But the sale was never formally completed: the purchase funds were not initially passed to the company’s solicitor, the title deeds were not transferred, and the bank did not receive the sale proceeds. The company’s solicitor later received the funds and undertook to remit them to the appropriate party once it was established whether Ulster Bank or Promontoria was entitled to them.
Promontoria argued that it had a stateable claim against the company and that the purchaser’s contract did not bind the lender absent repayment of the mortgage. The company’s sole director involved in the application maintained that the bank had approved the sale and that the contract remained enforceable. The judge accepted that Promontoria had a stateable case concerning the security, but said the partly completed sale and the purchaser’s position could not be treated as irrelevant.
The court said the 2014 Act requires an applicant to show that restoration would be fair and proportionate to everyone whose interests may be affected. It was not persuaded that restoration to enable steps against property in the purchaser’s possession would meet that test, particularly when she had not been put on notice. The court did not decide all the other arguments raised. It refused the restoration application; it did not rule on the purchaser’s ultimate title or determine whether a receiver could be appointed.
The judge said the company’s filing obligations and the practical difficulties of filing returns did not provide a reason to refuse restoration. She also considered the funds held by the solicitor, who had undertaken to pay the party entitled to them, and found no material concern on that point.