A fund-appointed receiver can sell a Dublin city pub property after a High Court judge refused to grant injunctions restraining the sale.
Receiver Michael McAteer has received bids of about €1.6m for the property comprising Nash’s bar and upstairs offices and a residential unit, at the junction of Patrick Street and Kevin Street.
Ennis Property Finance appointed the receiver last December on foot of repayment demands issued from August 2016 after it acquired loans concerning the property from Bank of Scotland.
The fund opposed proceedings initiated last October by builder Paul O’Reilly, O’Curry Avenue, South Circular Road, Dublin, and his company Donore Garages Ltd (DGL), with offices at Harold’s Cross Road, Dublin, aimed at restraining sale of the property. The fund claimed Mr O’Reilly had provided a guarantee over loans concerning the property made by Bank of Scotland to DGL.
Mr O’Reilly argued that he and DGL had reached a “binding” agreement with Bank of Scotland in 2014 to buy out various loans at agreed prices and that agreement involved five separate settlements. Four of the five settlements had been completed on foot of which the plaintiffs had bought back loans and security for 10 of 11 properties.
Substantial repayment
The outstanding property was the Nash’s pub building, he said. He claimed the fifth partially completed setlement initially envisaged a single payment of €2.1 million of which €1.85 million had been repaid, leaving some €285,000 outstanding.
He claimed completion of that settlement has been delayed largely due to a failure by Bank of Scotland and/or Ennis Property Finance to address deficiencies in title.
When Ennis demanded repayment of some €1.4 million on December 1st 2016, Mr O’Reilly and DGL argued that demand was untenable, claiming the asserted debt had been settled and a substantial repayment had been made.
On December 8th, Ennis appointed the receiver. Mr O’Reilly argued the appointment was invalid and sought orders to restrain the receiver dealing in any way with the property.
Ennis and Mr McAteer, of Grant Thornton, represented by Rossa Fanning SC, brought their own proceedings aimed at restraining any interference with the receiver in his dealings concerning the property.
The receiver alleged the plaintiffs had failed to pay, by an “unequivocal” March 2015 deadline, the sum of €285,000 which they argued was necessary to release the bank’s security on the upper-floor properties. After that deadine passed, the plaintiffs were told no settlement had been reached with Bank of Scotland in relation to the upper-floor properties and, as a result, the bank’s security and the plaintiffs’ outstanding indebtedness remained.
Full hearing
In his judgment on Thursday, Mr Justice Brian McGovern refused to grant Mr O’Reilly and DGL injunctions preventing the property being sold pending the full hearing of the dispute between the sides.
While stressing his decision did not involve a final determination of the issues raised, the judge found Mr O’Reilly had not made out an arguable case for the injuctions. Damages would be an adequate remedy should Mr O’Reilly succeed at the full hearing, he also said.
The balance of convenience was against granting injunctions restraining the receiver dealing with the property, including proceeding to sell it, he further held.
He said he could not find any legitimate basis for the registration by Mr O’Reilly/ Donore Garages Ltd of a legal claim concerning the property.
Refusing the injunctions would not prejudice the plaintiffs who had agreed in principle to the bar being sold for a certain figure, the judge held.
