The High Court ruled that Ulster Bank had not released its security over three houses at Clearwater Cove, Rosslare, and directed Michael Fortune and Cyril Barden to deliver possession of them to receiver Kieran Wallace.
The decision followed an application by Wallace for directions under section 316(1) of the Companies Act 1963 concerning houses 10, 20 and 41. The dispute was whether the bank had agreed to release its security after Ellen Construction Limited’s debt fell to €2 million, allowing the houses to pass to the respondents.
The bank’s evidence was that its agreement to release the security was conditional on the company’s debt being reduced to €2 million through proceeds from the three houses or funding from another source, with the remaining debt secured on nine other Clearwater units. The respondents argued that the bank’s 7 April 2009 letter recorded an agreement to release the houses once the debt was reduced to €2 million, without those additional conditions. Barden said the houses had been informally ceded to him and Fortune as part of their profit from the development.
Justice Roderick Murphy found that the bank’s contemporaneous notes and correspondence supported its account of an agreement reached on 20 January 2009. He also noted that the respondents did not seek release of the houses when the debt fell below €2 million through sales of other units, and that the bank’s evidence was uncontradicted. The judge drew an inference from the absence of evidence from David Sheeran, the company’s financial controller, and found that Sheeran had acted as an agent for the partnership. The respondents had not discharged the burden of proving a different concluded agreement.
The court directed that Ulster Bank (Ireland) Limited had not released its security over the properties and confirmed that Wallace was validly appointed receiver in respect of them and/or the company’s interest in them under the security assignment and debenture. The respondents had not contested the receiver’s appointment; the dispute concerned the three houses and the claimed release of the bank’s security. The court also ordered both respondents to deliver possession of the properties to the receiver.