The High Court has refused to pause a damages action over the failed purchase of the Hazel Hotel while a separate appeal concerning the plaintiff’s position as liquidator remains pending.
In a judgment delivered on 15 March 2016, Mr Justice Barr refused the defendant’s application for a stay. The ruling addressed only whether the proceedings should be paused pending the Court of Appeal’s judgment in a case brought by the Revenue Commissioners. It did not decide the damages claim.
The judgment says the hotel was auctioned in May 2011 during the liquidation of Ballyrider Limited. Michael Phibbs was the successful bidder at €630,000 and paid a €34,000 deposit, but the sale did not close by the agreed date. After the property was re-advertised, it was sold to another buyer for €479,000, with the price reflecting a €1,000 allowance for vandal damage.
Anthony J. Fitzpatrick, identified in the case as the company’s liquidator, brought the present proceedings in January 2012, seeking €150,000—the difference between the two sale prices. The action had not advanced to trial. The defendant’s solicitor said replies to two notices seeking particulars were outstanding, and that no prosecution steps had been taken for more than three years before a motion for judgment in default of defence was made in 2015. That motion was dismissed with costs for the defendant.
The defendant argued that the action should wait until the appeal over Mr Fitzpatrick’s removal as liquidator was decided. A High Court order had removed him in July 2015; that order was stayed by the Court of Appeal pending appeal, subject to conditions on withdrawals and payments from liquidation funds. The defendant also argued that continuing the case would breach those conditions and could leave him unable to recover legal costs if he successfully defended the claim.
The plaintiff responded that solicitors had advised orally on the case and had written in October 2014 that the proceedings were well founded and necessary for the liquidation. He also argued that Committee of Inspection approval was not required before starting the action.
Mr Justice Barr said it was appropriate to institute proceedings over the resale shortfall. He noted that the Revenue Commissioners’ objection to continuing the claim was based on whether pursuing it served the liquidation’s interests and the prospect of recovering damages, rather than on the claim being legally unsound. He said a new liquidator might later decide not to pursue it if the removal order was upheld, but that possibility did not entitle the defendant to a stay until an indeterminate future date.
Because the action remained at the particulars stage, the judge considered it almost certain that it would not be ready for trial before the Court of Appeal delivered judgment. The defendant would therefore incur no substantial costs in the meantime and, in the judge’s view, would not be prejudiced. The application for a stay was refused.