Tweedswood Ltd and Another v Power

• Jurisdiction: Ireland
• Judge: Mr. Justice O'Donnell,Mr. Justice Gerard Hogan
• Judgment Date: 13 May 2025
• Neutral Citation: [2025] IESC 18
• Court: Supreme Court
• Docket Number: S:AP:IE:2010:000183

Between/

Tweedswood Limited (In Receivership)

and

Tom Kavanagh (Receiver)

Plaintiffs / Respondents

and

Martin Power

Defendant / Appellant

and

By Consent of the Court Ulster Bank Limited

Counterclaim Defendant

[2025] IESC 18

O'Donnell C.J.

O'Malley J.

Woulfe J.

Hogan J.

Murray J.

S:AP:IE:2010:000183

AN CHÚIRT UACHTARACH

THE SUPREME COURT

Interlocutory injunction – Culpable delay – Receivership – Appellant seeking to discharge an interlocutory injunction – Whether there was culpable delay

Facts: The appellant, Mr Power, appealed to the Supreme Court against a decision of the High Court granting the respondents, Tweedswood Ltd (a company in receivership) and Tom Kavanagh (the Receiver), an interlocutory injunction restraining Mr Power, the sole shareholder in the company, from remaining in or continuing possession of premises the subject matter of the receivership, being office premises with overhead accommodation at Slaney House, Custom House Quay in Wexford. The Receiver was appointed on 10 August 2009, and the application for the interlocutory injunction was heard by the High Court in April 2010 and granted on 5 May 2010. The plenary proceedings in which the interlocutory injunction was obtained had yet to be heard in the High Court. The premises had not been sold or let since the grant of the interlocutory injunction. The property had not generated a single euro towards reduction of the debt although costs had continued to be incurred in maintaining security, insurance and the fees of the Receiver. On 22 May 2023, a dereliction notice was issued by Wexford County Council in relation to the property.

Held by O’Donnell CJ that an interlocutory injunction is a powerful remedy which allows an urgent and immediate order to be obtained; where such a remedy is obtained on an interlocutory basis and may be mandatory in effect, there is a particular duty upon the party obtaining such an injunction to ensure that the substantive proceedings are heard and determined as soon as possible. He held that if there is any culpable delay in that regard, then the court is entitled to, and may be obliged to, set aside the order obtained. He held that while a court should not refrain from granting an injunction when it is an appropriate remedy, it is important to consider whether such an order is necessary in any given case; there are circumstances where, if an early trial of the case can be directed, less powerful orders may need to be made, or it may be possible to hold the position in some rough equilibrium over a short period pending such a trial. He held that a court should seek to limit the issues to those which are necessary to be determined in order to grant or refuse the order sought in any proceedings. It was apparent to him that Mr Power had extensive complaints about the preexisting transaction under which the company acquired the premises, but before embarking on an extensive hearing of all the surrounding circumstances which had occurred more than two decades ago, it must be possible to determine as a matter of law how any such matter can lead firstly to an invalidity in the appointment of a Receiver, and second, how in the light of the winding up of the company Mr Power could in any event advance such a claim. O’Donnell CJ held that where a company is in liquidation and a claim is sought to be asserted by an individual on behalf of the company, it must be possible to establish whether or not such a claim can be maintained whether by way of assignment by the company for good consideration, or under an exception to the rule in Foss v Harbottle.

O’Donnell CJ allowed the appeal and discharged the interlocutory injunction.

Appeal allowed.

Judgment of Mr. Justice O'Donnell, Chief Justice delivered on the 13 ^th day of May, 2025.

1 . This is an appeal against a decision of the High Court granting the plaintiff, a company in receivership, and the Receiver, an interlocutory injunction restraining the defendant appellant, the sole shareholder in the plaintiff company, from remaining in or continuing possession of premises the subject matter of the receivership, being office premises with overhead accommodation at Slaney House, Custom House Quay in Wexford.

2 . As such, the appeal might appear unremarkable in many ways, and the type of issue regularly encountered in the High Court and the Court of Appeal, though less in this Court since its jurisdiction was reformed in 2014 and confined to cases of general public importance or those where the interests of justice require an appeal. However, what is noteworthy about this case, and a matter of real concern, is that the Receiver was appointed on 10 August 2009, and the application for the interlocutory injunction was heard by the High Court in April 2010 and granted on 5 May 2010. That was just over 15 years ago. The passage of time can sometimes appear to be measured differently in the context of explaining delays in litigation, and years can go past in a paragraph or two, but for context, August 2009 was when the band Oasis split up, and April 2010 was when the Icelandic volcano Eyjafjallajökull was erupting and spreading volcanic ash leading to the closure of airspace over most of Europe.

3 . Where, we might ask, were we all when these events occurred, and what has happened since? As far as this litigation is concerned the parties have a simple answer; they have barely moved from where they were then. The plenary proceedings in which this interlocutory injunction was obtained have yet to be heard in the High Court. The premises have not been sold, and indeed, have not been let since the grant of the interlocutory injunction. The property has not generated a single euro towards reduction of the debt although costs have continued to be incurred; in maintaining security, insurance and, presumably, the fees of the Receiver. At one stage, on 22 May 2023, a dereliction notice was issued by Wexford County Council in relation to the property.

4 . This case exhibits a number of features which cast a telling, and sobering, light on the conduct of receiverships, the use of interlocutory injunctions, and the manner in which the litigation process can all too readily lead to delay, stalemate, and expensive stasis, rather than the speedy resolution of disputes which result in either the sale of the property, the reduction or extinction of the debt, and the efficient conversion of the property into a productive asset in the hands of a purchaser or, where it is established that the receiver was invalidly appointed, the restoration of secured property to an owner.

5 . It is not necessary to set out the facts of this case in any detail, and indeed the proliferation of allegations, contentions raised, and side issues ventilated, have undoubtedly contributed to the delay in this case. Accordingly, I will set out only those matters which appear necessary in order to understand the particular issue in this appeal.

6 . The property in question is a small commercial-type premises in the centre of Wexford Town. It was the only asset of Tweedswood Ltd. The company had borrowed almost €900,000 from First Active (later Ulster Bank) and on 10 August 2009, the Bank appointed Tom Kavanagh, then of Kavanagh Fennell Accountants, as Receiver over the property. As it happens a winding up order had been made in 2008 in respect of Tweedswood and a number of related companies and a liquidator appointed. In one of the very many unusual features of this matter the order made in relation to Tweedswood was stayed pending appeal and the appeal had not been heard. The winding up order and the appointment of a receiver was perhaps an early harbinger of the collapse of the property market and financial crisis that was to engulf Ireland. The difficulties in the property market certainly formed part of the backdrop to the difficulties encountered in these proceedings. Indeed, both the amount of the indebtedness, and the property itself were relatively minor in comparison with the insolvencies, receiverships, bankruptcies, and cases seeking to enforce security which flooded the Irish Courts in the subsequent years.

7 . Mr. Power did not initially give up possession of the premises to the Receiver and another person had been let into occupation. The Receiver commenced these proceedings and sought an interlocutory injunction. Mr. Power has represented himself in the proceedings, and sought to challenge the Receiver, although not on grounds related to any technical invalidity in the debenture, or in the appointment of the Receiver (claims which a court might make some initial assessment of). Rather, he seeks to challenge the Receiver by reference to a complex, and later described by MacMenamin J. in this Court as byzantine (see [2017] IESC 81), claim related to the circumstances in which the company had acquired the property, and the alleged involvement of the Bank, all of which was said to disable the Bank from appointing a receiver. There was a hearing in the High Court over two days. Murphy J. appears to have been unpersuaded that Mr. Power's claim was of any particular cogency, observing that it was difficult to see how even if Mr. Power's complaints about the background to the sale of the property were justified, that that would give him or the company a valid claim that the debenture was invalid or the appointment of the receiver ineffective. Furthermore, he considered that the balance of convenience favoured the grant of an injunction. It should be noted that the form of injunction, although prohibitory in that it restrained Mr. Power from remaining in possession or interfering in the Plaintiff's business, was effectively mandatory in nature in that it put the Receiver into possession of the premises, and was therefore, in interlocutory form, the final relief that was sought in the proceedings. Although the case was not argued in these...