Perfect Stripe Ltd [Trading as Grafter] v Fennell and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: R. Justice Michael Twomey
• Judgment Date: 31 October 2025
• Neutral Citation: [2025] IEHC 585
• Docket Number: RECORD NUMBER 2025.3891

Between:

Perfect Stripe Limited T/A Grafter

Plaintiffs

and

Ken Fennell and Brendan O'Reilly in their Capacity as Joint Receivers of Wonder Bay Limited (In Receivership), Crossville Properties Limitd (In Receivership) and Discovery Dawn Limited (In Receivership)

Defendants

[2025] IEHC 585

RECORD NUMBER 2025.3891

COMMMERCIAL COURT

THE HIGH COURT

JUDGMENT of M R. Justice Michael Twomey delivered on the 31 ^st day of October, 2025

INTRODUCTION

1 The defendants (the “ Receivers”) took possession of three office buildings in Dublin (i.e. at St. Stephen's Green, Ely Place and Leeson Street) which were owned and operated by a group of companies (the “ McKillen Group”). The Receivers were appointed by a group of companies (the “ RELM Group”) that had lent funds to the McKillen Group to finance the acquisition of those three properties.

2 The Receivers were appointed when one of the companies in the McKillen Group, the plaintiff (“ Grafter”), had failed to pay over €3 million of the rent, as set down in the leases of the three properties. As the rent was used by other companies in the McKillen Group to pay the interest to the RELM Group, this failure by Grafter to pay the rent gave rise to an event of default under the relevant loan and security agreements. This failure by Grafter to pay the rent therefore led to the Receivers ultimately entering the three properties on 23 June 2025 and so Grafter, as the tenant, lost possession of those properties on that date.

3 On 10 July 2025 Grafter issued proceedings seeking, amongst other things, an order that the Receivers vacate the three properties. On the same date Grafter brought a motion seeking an interlocutory injunction requiring the Receivers to deliver up possession of the properties, pending the trial of the action. This judgment relates to that application for an injunction which was heard by this Court on 10 October 2025.

4 In support of this application, the person who controls the McKillen Group, Mr. Paddy McKillen Junior (“ Mr. McKillen”), claims that the balance of justice demands that the Receivers give back possession of those properties to Grafter, pending the trial of the action. Thus, even though Grafter has failed to pay over €3 million of the stated rent in the leases, Mr. McKillen nonetheless claims that ‘justice’ demands the return of possession of the properties to Grafter. In this regard, Mr. McKillen made a number of novel arguments as to why it is just that a tenant, who has failed to pay the rent set out in the leases, should nonetheless be given back possession of the properties.

5 Firstly, Mr. McKillen claimed that the stated rent in the relevant deeds (which, it is to be noted, were signed by Mr. McKillen on behalf of both the landlord and the tenant) is not in fact the actual rent which is due and owing. Instead, he claims that the actual rent, which Grafter is legally obliged to pay, varies depending on the interest, which is due under a loan agreement between the landlord and its lender (to which Grafter was not a party). Thus, in direct conflict with the express terms of the deeds which he signed, Mr. McKillen says that Grafter does not in fact owe rent arrears of €3 million, and so he says that justice demands that Grafter be given back possession of the properties.

6 Secondly, he claims that it is ‘unconscionable’ that he (on behalf of Grafter, as the tenant) was pressurised by a lender into increasing the rent payable by Grafter on the properties. This pressure, he says, was applied so that Grafter would fund its sister companies in the McKillen Group (the landlords), to enable them to meet an increase in repayments, arising from an increase in interest rates. However, this type of pressure on a borrower (or in this case, on the sister company of a borrower) to meet increased repayments, is the type of pressure which most ordinary individuals feel, every time there is an increase in home interest rates. Nonetheless, Mr. McKillen, as a businessman heavily involved in the property business, claims that this pressure on him/Grafter was ‘ unconscionable’. On this basis, he makes perhaps his most novel claim on behalf of Grafter, namely that this alleged unconscionable behaviour means that Grafter should be given back possession of the properties. To put this matter in plain terms, a businessman feels financial pressure to comply with his (or a sister company's) freely entered contract to increase loan repayments, when interest rates rise. However, this pressure, which many individual borrowers feel, does not amount to unconscionable behaviour on the part of the lender.

7 Thirdly, he points out that the business carried on by Grafter was that of providing serviced offices from the three properties to third party licensees. Grafter submitted that this business was ‘very successful’ with ‘ high-profile, high-quality companies, such as OpenAI and others’. However, Mr. McKillen claims that the Receivers, when they took possession of the properties, misappropriated Grafter's business. Grafter claims the Receivers misappropriated its business by, amongst other things, continuing to allow the licensees to use the serviced offices in the three properties and continuing to collect licensee fees from those licensees. However, as noted below, Grafter's business was, in effect, one of sub-leasing office space. The provision of this business by Grafter necessarily came to an end when it had no offices to sub-lease (because it failed to pay the rent on the offices that it was, in effect, sub-leasing). However, in support of this claim of misappropriation, Grafter states that the Receivers did not give Grafter adequate notice that they were going to take possession of the properties, so that Grafter could have shut down that business (‘ We could have shuttered the business if they'd given us proper notice’). Thus, Mr. McKillen appears to be making the novel claim, on behalf of Grafter, that another reason why ‘justice’ demands that Grafter be given back possession of the properties is that Grafter was denied the opportunity to shutter a successful business and force high-profile and high-quality companies to find other offices.

8 Fourthly, he claims that the Receivers did not effect their re-entry to the properties in a ‘ peaceable’ manner. In support of this argument, he states that the Receivers procured the security company, contracted by Grafter for the three properties, to remotely disable the magnetic locks on the properties, thereby enabling Grafter to enter those properties. However, opening a door, whether by releasing the magnetic closing mechanism, or by simply twisting a key in a lock, would appear to this Court be the epitome of a ‘ peaceable’ or non-violent entry. Nonetheless, Mr. McKillen claims that this re-entry on the party of the Receivers to the properties was not peaceable and so justice demands that Grafter be given back possession of the properties.

9 For the reasons set out hereunder, this Court does not believe that these claims, and the others set out hereunder, are such that they raise a ‘fair issue’ to be tried or that these claims are such that ‘justice’ requires that Grafter be granted possession of the properties. However, all this Court has to determine, at this interlocutory stage, is whether a ‘fair issue’ has been raised (and these claims can be properly considered at the trial of the action). Nonetheless, it seems to this Court that, rather than there being some injustice to Mr. McKillen/Grafter, if Grafter is not given back possession of the properties pending the trial, there would in fact be an injustice to the receivers if this were to occur. This is because the receivers (acting for the benefit of the persons who had funded the acquisition of the properties) would be giving back possession of properties (pending the trial) to a tenant who has failed to pay over €3 million of the rent stated in the leases for those properties. To adapt the words of Carroll J. (in Sweeney (F.G.) Ltd v Powerscourt Shopping Centre [1984] WJSC-HC 2859 at pg. 4), this would involve the tenant getting a ‘ free ride’ in the properties at the expense of the company that had funded the acquisition of those properties. This cannot, in this Court's view, amount to ‘justice’, which is the key element in the test for determining whether to grant an interlocutory injunction on the ‘balance of justice’.

BACKGROUND

10 Wonder Bay Limited, Crossville Properties Limited and Discovery Dawn Limited (the “ Landlords”) own properties at 6/7 St. Stephen's Green, Dublin 2, 10 Ely Place, Dublin 2 and 41 Leeson Street, Dublin 2, respectively (the “ Properties”). The Landlords are all part of the McKillen Group of companies along with Grafter (the “ Tenant”). Grafter entered into:

• • a Lease dated 14 June 2022 of 6/7 St. Stephen's Green, Dublin 2 (“ Stephens Green”) with Wonder Bay Limited (as varied by a Deed of Variation dated 19 December 2022);

• • a Lease dated 20 December 2021 of 10 Ely Place, Dublin 2 (“ Ely Place”) with Crossville Properties Limited (and as varied by a Deed of Variation dated 31 August 2023);

• • a Lease dated 26 July 2021 of 41 Leeson Street, Dublin 2 (“ Leeson Street”) with Discovery Dawn Limited (as varied by a Deed of Variation dated 19 December 2022), which three leases are together referred to herein as the “ Leases”.

11 Mr McKillen was a director of, and controlled, both the Tenant and the three Landlords when the Leases and the Deeds of Variation were executed. The acquisition of each property was financed by the McKillen Group using special purpose companies, i.e. each of the three Landlord companies. These are special purpose companies since their only role was to act as the owner and the lessor of the Properties. For this purpose, each of the Landlords borrowed 1 the funds to finance the acquisition of the relevant property under the terms of...