The High Court refused an application by Komady Limited and Michael O’Reilly to restrain two joint receivers from acting in relation to Belgard Retail Park in Tallaght, Dublin 24. The ruling concerned an interlocutory injunction; it was not a final determination of the underlying proceedings.
The receivers, Kieran Wallace and Shane McCarthy, had been appointed under a deed dated 24 October 2014. The plaintiffs had obtained an interim order on 6 November 2014, but at the hearing confined their application to restraining the receivers. Justice Brian J. McGovern delivered judgment on 23 January 2015.
The dispute arose from loan facilities offered in 2005 and 2006. The judgment records borrowing of €24.44 million under the 2005 offers and €2.5 million under the 2006 offers, secured principally by mortgages over the plaintiffs’ interests in the retail park. The bank said events of default entitled it to demand repayment and appoint receivers.
The plaintiffs argued that the bank’s course of dealing prevented it from relying on its strict contractual rights, and alleged that the bank acted to enhance the value of adjoining land in which it had an interest. They also raised questions about default, enforcement in good faith and the bank’s claimed right to use rental funds against loan accounts.
The judge said the loan and security documents allowed repayment to be demanded and gave the bank rights over security. He found that the plaintiffs had not produced correspondence or other evidence showing that the bank had waived those rights. The evidence instead included letters in which the bank reserved its position.
The court also considered the plaintiffs’ failure to direct rent into accounts required by the security documents. The judgment records that the bank had raised the issue in a letter dated 12 August 2014 and that an affidavit acknowledged the plaintiffs had refused to pay the sums into an account with the bank. The judge treated this as a breach capable of constituting an event of default. He also noted that the 2006 loan, due on demand or by 1 June 2010, remained unpaid.
The judge rejected the allegation of an improper motive, saying evidence that a disposal might benefit adjoining land did not establish that the bank acted for that purpose or in bad faith. He concluded that the plaintiffs had not shown the essential requirement of a serious issue to be tried. Because they failed at that stage of the test for an interlocutory injunction, he did not consider whether damages would be an adequate remedy or the balance of convenience. The application was refused.