Michael Cotter and Another v Landscape House Golf and Leisure Ltd and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice David Keane |
| Judgment Date | 25 February 2015 |
| Neutral Citation | [2015] IEHC 128 |
| Court | High Court |
| Date | 25 February 2015 |
[2015] IEHC 128
THE HIGH COURT
BETWEEN
AND
Company Law – Voluntary Liquidation – Receivers – Company Property and Assets – Leases
Facts: The plaintiffs were joint receivers of property and assets of a limited liability company. Allied Irish Banks appointed the receivers when Keelgrove Construction Limited (‘the company’) went into voluntary liquidation. The plaintiffs sought an order for the possession of the property and various orders to restrain the defendants from trespassing on the property or interfering with the receivership. The plaintiffs also claimed damages for trespass. The company used the property at issue as security for various commercial loans from the Bank. When the company defaulted on the repayments the Bank sent letters demanding the sums due and owing on foot of the relevant facilities. The defendants occupied portions of the property pursuant to a lease granted by the company. The director of Landscape House Golf & Leisure Limited (‘Landscape’) gave the receivers a copy of the lease.
Held by Keane J: The test applied by the court was whether the receivers made out a strong prima facie case. The defendants argued they were in possession of portions of the land by way of leases and/ or letting agreements that had been entered into with the knowledge and consent of the lending institution, AIB Bank. The Bank argued that it had not given consent to the company to let the security property nor had it consented to the lease between the company and Landscape. The defendants contended that the bank had acquiesced in or recognised the lease by demanding rent in place of the company. This meant the receivers and, by extension the bank, could not repudiate the lease.
The court considered the correspondence relied upon by the defendants to support their argument. The court did not accept the defendants” arguments because the receivers had not seen the lease until the director of Landscape provided them with a copy. The court determined that the receivers would not have acquiesced on behalf of the Bank to an unknown lease, with an unknown party, at an unknown rent, subject to unknown terms and conditions. The court accepted that the letters sent by the receivers were to ensure that any monies due in respect of the security property were not paid in error to the directors of the company.
The court determined that the receivers had offered to enter into an amended version of the lease with Landscape but said that this did not amount to an acquiescence to the original lease should Landscape fail to accept the receivers” offer. The court determined that the defendants had failed to make out an arguable defence. The receivers had made out a strong prima facie case for the reliefs sought. In relation to the damages claim, the court was satisfied that the balance of convenience favoured the injunctions being granted where the continued occupation of the security property was frustrating the receivership. The court accepted the receivers undertaking to compensate the defendants for any damage or loss sustained should the injunction ultimately prove to have been wrongly granted.
JUDGMENT of Mr. Justice David Keane delivered on the 25th February 2015
1. The plaintiffs have issued the present proceedings as joint receivers ("the receivers") of the property and assets of a company known as Keelgrove Construction Limited ("Keelgrove"), a limited liability company having its registered office at Parkroe, Ardnacrusha, County Clare.
2. Keelgrove went into voluntary liquidation on the 1 st November 2012. The receivers were appointed by deed of appointment executed by Allied Irish Banks plc ("the bank") and dated the 18 th December 2012. The property concerned includes the lands and premises contained in Folio No. 2456 of the Register of freehold lands for County Clare to which a seven-day publican's licence is attached.
3. The reliefs sought in the plenary summons that issued on the 12 th March 2014 include an order for possession of the property and various orders restraining the defendants from interfering with the receivership or trespassing upon the property, together with a claim for damages for trespass.
4. By notice of motion issued on the 20 th March 2014, the receivers now seek substantially the same reliefs by way of interlocutory injunction, leaving aside only the damages claim. Specifically, the receivers apply for the following orders:-
a) An Order directing the Defendants their servants or agents and any other person having notice of the Order of this Honourable Court to vacate [the property].
b) An Order restraining the Defendants and each of them, their servants and agents, and all persons having notice of the Order of this Honourable Court from trespassing upon and/or entering upon [the property], and
c) An Order restraining the Defendants and each of them, their servants and agents, and all persons having notice of the Order of this Honourable Court from interfering with the functions and office of the Plaintiffs as Receivers of [the property].
3. The receivers' application is grounded on an affidavit of Michael Cotter, sworn on the 19 th March 2014. In that affidavit, Mr. Cotter avers to the receivers' appointment, pursuant to a deed of appointment executed by the bank and dated the 18 th December 2012, under the power to do so conferred on the bank by a Mortgage Debenture dated the 16 th December 1999, made between the bank, as mortgagee, and Keelgrove, as mortgagor of specified mortgaged property, including the property now at issue.
4. Mr Cotter has exhibited a copy of the relevant folio covering the property, which comprises a substantial main residence (named Landscape House) with nine self-contained apartments around a courtyard to the rear, together with several other outbuildings and surrounding farmlands extending to approximately 60 acres. Mr Cotter further avers that one of the apartments has been converted into a public house, to which a public house licence is currently attached, although that licence did lapse for a period between the 30 th September 2013 and the 6 th May 2014. It appears to be common case that the current holder of the licence is the third named defendant Mr Dermot McMahon.
5. Mr Cotter has deposed that, pursuant to the terms of the mortgage, the property at issue formed part of the security provided by Keelgrove in exchange for various commercial loan facilities that Keelgrove received from the bank and upon which it subsequently defaulted. Mr Cotter exhibits a letter from the bank to Keelgrove, dated the 15 th November 2012, demanding payment of the sums then due and owing on foot of the relevant facilities. Mr Cotter goes on to aver that, as of the 3 rd March 2014, the amount due and owing on those facilities stood at €1,497,652.27, upon which sum interest continues to accrue.
6. The receivers have brought the present application on the basis of their understanding that each of the defendants claims some entitlement in respect of the property at issue and, in particular, that the first, third and fourth named defendants are in occupation of a portion of it pursuant to a lease purportedly granted to them by either Keelgrove or the second named defendant Mr Tony McMahon (who, it does not appear to be disputed, was a director of Keelgrove at the material time).
7. Mr Cotter avers that, since their appointment, the receivers have made enquiries and engaged in correspondence with certain parties who appear to have some involvement with the property. The relevant correspondence is exhibited to Mr Cotter's affidavit.
8. In particular, on the 18 th January 2013, the receivers obtained from Ms Andrea O'Grady, a director of the first named defendant, Landscape House Golf and Leisure Limited ("Landscape"), a copy of a lease dated the 23 rd August 2005 made between Keelgrove and Landscape in respect of a significant part of the property described as "Landscape House Golf & Leisure Facility also known as Clonlara Golf Club" ("the 2005 lease").
9. Furthermore, on the 17 th July 2013, the second named defendant Mr Tony McMahon furnished to the receivers a purported lease dated the 1 st February 2011, made between himself as "owner" and the fourth named defendant, Ms Theresa Meskell, as "farmer", in respect of certain agricultural lands that, it seems to be acknowledged, also form part of the property at issue. It is unnecessary to consider the averment by Mr Tony McMahon that this lease should be read, contrary to the plain and ordinary meaning of the words ctually used to describe the parties to it, as a lease between Keelgrove and Ms eskell, rather than as one between Mr Tony McMahon and Ms Meskell, because the defendants have confirmed, both on affidavit and at the hearing of he present application, that they do not seek to place any reliance upon it.
10. The test that I propose to apply on this application is the one identified by Lynch J. in ICC Bank plc v. Richard Verling, Niamh Landy and Wine Dimensions Limited [1995] 1 I.L.R.M. 123, and applied by Birmingham J. in Ferris v. Meagher and Echoforde Limited [2013] IEHC 380, namely whether the receivers have made out a strong prima facie case. The basis for the application of a more rigorous test than that required under the Campus Oil principles is that the relief now sought takes the form of a mandatory injunction, which, if granted, is capable of effectively detennining the dispute between the parties.
11. In this context, for the...
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Thompson v Tennant
...by the second plaintiff. Further, the defendants rely on the judgment of Keane J. in Cotter v. Landscape House Golf and Leisure Ltd. [2015] IEHC 128 as supporting the proposition that a request for information about a tenancy cannot be read as acquiescence or an acknowledgement of the lease......