The High Court has refused an application by Noel Martin to have Brendan O’Donoghue discharged as receiver of Mardon Property Developments Limited, holding that the orders sought could not be made under the statutory provision relied on.
Mr Martin, a director and member of Mardon, applied under section 438 of the Companies Act 2014 to 2020 for directions concerning the continuation of the receivership. He sought an order requiring Mr O’Donoghue to file a Form E11 with the Companies Registration Office, or an order discharging him.
Mr Martin argued that the receiver had been appointed over specified properties, all of which had been sold, and that the receivership was therefore exhausted. He also said the receiver’s refusal to discharge himself was not justified. The receiver’s position was that his appointment covered the company’s assets under the security documents, and that he needed to remain in office to defend ongoing proceedings concerning his conduct as receiver, including because he needed access to Mardon’s books and records.
The court recorded that the receiver had been appointed in 2015 and sold the real properties on 19 April 2018. It also noted other litigation involving claims about the receiver’s management and disposal of property. Those claims were described as allegations; the court did not determine them in this application.
Justice Conor Dignam accepted that Mr Martin had standing to apply under section 438 because he was an officer of Mardon. The judge left open whether the provision’s requirement for evidence of unfair prejudice affects standing or instead the entitlement to relief, saying that point had not been fully argued.
However, the court concluded that the orders sought would, in substance, remove the receiver. Section 435 expressly provides for the court to remove a receiver on cause shown. The judge held that section 438’s broad power to give directions did not extend to removing a receiver in circumstances where the Companies Act made specific provision for removal under section 435. The statutory receiver’s appointment under the National Asset Management Agency Act did not displace the court’s section 435 power.
The judge said that if sufficient cause for removal were established, the route identified by the legislation would be an order removing the existing receiver and appointing a replacement to take steps to bring the receivership to an end. He made no finding that sufficient cause existed, or that the receivership was exhausted. Other issues raised by the parties were left undecided. The court refused the relief sought.