The High Court ruled that Lee Towers Management Company could enforce the transfer of common areas and reversions at the Lee Towers development, but could not use repair orders to secure priority over other creditors of the insolvent developers. The court also held that a Mareva injunction was not an appropriate way to enforce the Circuit Court orders and directed that it be vacated.
The judgment, delivered by Ms Justice Baker on 19 July 2018, concerned two companies in liquidation, Lance Investments Limited and Lance Homes Limited. Their liquidator, Carl Dillon, sought directions under the Companies Act 2014 and appealed an interim Mareva injunction made by the Circuit Court. Lee Towers had brought Circuit Court proceedings under the Multi-Unit Development Act 2011, seeking transfer of the development’s common areas and reversions, completion works, and reimbursement for repairs.
The High Court distinguished the conveyancing obligation from the remedial orders. It held that the obligation to transfer the common areas and reversions arose from the existing Management Company Agreement and attached to the companies’ interests in the land. The MUD Act provided a statutory means to enforce that obligation, including before the last unit was sold. The judge left open who should bear the deed-preparation and engineering costs of identifying and mapping the land, saying she would hear counsel further on that issue.
The Circuit Court had also ordered work to address defects in common areas and reimbursement of costs already incurred by Lee Towers. The High Court held that those remedial orders did not displace the statutory payment priorities in a liquidation. Lee Towers was an unsecured creditor in respect of those claims; the orders did not give it preferential status or require the liquidator to spend assets controlled by the liquidation on construction and repair.
On costs, the court rejected the claim that the entire Circuit Court costs award ranked as a liquidation expense. It held that a portion attributable to prosecuting the claim for transfer of the common areas and reversions could qualify for priority, with the amount to be reasonably ascertained. The judgment records that the costs had been taxed at €132,423.96.
The court further ruled that the Mareva injunction and applications for attachment and committal were not appropriate enforcement methods in light of the High Court’s earlier order staying enforcement pending further order. It directed that the Mareva injunction be vacated. The judgment did not determine the mapping-cost issue or quantify the part of the costs eligible for priority.