The High Court granted the Firstwood Partnership an interlocutory injunction preventing steps to take possession of or otherwise act under a receiver’s appointment over its Dublin 2 property. The order is temporary: it preserves the position pending a full hearing and does not decide whether the partnership was in default.
The ruling followed a hearing on 3 February 2017. The partnership, formed by five named plaintiffs, owns a multi-storey car park complex with office and retail units. Launceston Property Finance Limited acquired rights under the partnership’s loan and security agreements in 2014. It demanded repayment of about €6.7 million in September 2016, after requiring the partnership to remit rents, and appointed Stephen Tennant as receiver on 30 September.
The partnership argued that its repayments under an amortisation schedule met its obligations, relying on years of dealings in which rent had not been paid to the lenders. It also argued the lender was estopped from treating the facility as in default or appointing a receiver. The defendants said the written agreements required rents to be paid to the lender, and that the partnership had not established a waiver or the elements of estoppel.
Justice Kennedy found there was a fair question to be tried. She concluded damages would not adequately compensate the partnership if it ultimately succeeded, while the partnership could compensate the defendants if it lost. She also found damages would be an adequate remedy for the defendants and that the balance of convenience favoured maintaining the status quo. The court relied on the partnership’s undertaking as to damages.
The defendants had also alleged material non-disclosure at the October 2016 ex parte hearing, pointing to a rent payment of about €230,000 received shortly before the application. The judge was not satisfied that its omission was a material fact: in her view, it related to urgency, while the central concern was the prospect of a sale of the secured property.
The court said rents and other income no longer had to be held in escrow under an earlier undertaking. It noted that the property’s market value was about twice the outstanding debt and that the debt continued to be paid.