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URL: http://www.bailii.org/ie/cases/IESC/2025/2025IESC18ODonnell.html

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 AN CHÚIRT UACHTARACH

THE SUPREME COURT

                                                                        S:AP:IE:2010:000183

[2025] IESC 18

 

O'Donnell C.J.

O'Malley J.

Woulfe J.

Hogan J.

Murray J.

 

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

Judgment of Mr. Justice O'Donnell, Chief Justice delivered on the 13th 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 express terms it is the case that a court normally requires that a strong case be made before such relief is granted, but in substance it appears the Court considered that this was the case. Unfortunately, Mr. Power did not give up possession immediately, and it was necessary for the Court Sheriff to execute the orders.

8.                  In my view, the decision of the High Court judge was plainly within his discretion, and I have little doubt that the order was correctly made at the time. On the face of it, there was a debenture, a power to appoint a receiver, and an appointment of a receiver, who had at least prima facie an entitlement to possession of the premises. That represented the legal status quo unless and until a court was persuaded that there was some fundamental flaw in the background to the appointment of the Receiver which could lead to invalidity. That was not obvious, and in addition the balance of convenience favoured allowing the Receiver to take possession of the property, rather than allowing Mr. Power, on behalf of the company, to retain possession and management of the premises without any clear and enforceable way in which such possession could be supervised by the Receiver and any rents secured. Indeed it is notable that the debate on this appeal did not seek to rehearse the arguments that had been made at the time of the High Court order, and argue that the High Court order was wrongly granted at the time: instead the argument focused on what had, and more particularly had not, occurred after the grant of the interlocutory injunction.

9.                  Mr. Power did appeal the decision of the High Court to this Court and also sought a stay. It should be noted that these events preceded the passage of the 33rd Amendment of the Constitution Act 2013 establishing a Court of Appeal and providing that the jurisdiction of this Court would henceforth be limited to appeals from either the Court of Appeal or High Court in cases of general public importance or where the interests of justice otherwise required an appeal to this Court. At that time, a party in the High Court had an automatic right of appeal to the Supreme Court pursuant to the provisions of Article 34.4.3° of the Constitution as then it stood. At that time the Court was composed of only eight judges struggling with a very considerable backlog which was growing steadily. It would have been unsurprising therefore if the appeal had become becalmed in the Supreme Court list but in fact it was dealt with, with commendable expedition. Affidavits were exchanged and a division of the Court (Macken, Finnegan and McKechnie JJ.) heard an application for a stay on Friday 12 November 2010, a day customarily reserved for the hearing of motions in extant appeals, and any matters which could be disposed of in a short hearing and without being listed in the general list.

10.              A trained lawyer, one hopes, might have appreciated that a contested motion for a stay on an interlocutory injunction, and particularly one which had resulted in the Receiver being in possession of the premises for almost six months by the time the stay application was heard, was likely a waste of precious time and effort, and that the time being made available by the Court could be better spent on the appeal proper, or indeed making progress in the underlying action. However, Mr. Power was not represented and perhaps understandably pursued the stay application, the resolution of which became central in this appeal.

11.              Again, affidavits were exchanged on the stay application, almost inevitably rehashing the dispute in respect of the injunction. However, an issue which was focused on in particular was the condition of the premises. The Receiver argued that it was better that the receivership would be in possession of the premises pending the full hearing of the interlocutory appeal because of the state of the premises, and the necessity that they should be put into repair. This crystalised in three paragraphs of the receiver's replying affidavit of 29 October 2010 which provided as follows:-

"4.       As set out in my First Affidavit considerable remedial works are necessary in order to secure and protect the Property and/or to make the Property available for letting or sale on the open market. I say that I have obtained two quotations for the remedial works in order to remedy the considerable defects which I discovered since I took possession of the Property from the Appellant and which arose from the improper care of the Property by the Appellant. [...] [these two quotations it should be said were for walls and windows in the sum of €9,236.80 and walls and roof at €36,504.70]

5.         I say that the quotations received indicate that substantial remedial works are required to all of the Property and I say that my remaining in possession and seeking to carry out such remedial works cannot in any way prejudice the Appellant. I further say that considering the state of the Property on the date when I took possession, while it was still in the possession of the Appellant, I believe that the interests of the Bank as secured lender of the Property are best served by my remaining in possession of the Property in order to discharge my duties as receiver - to ensure the Property is secured and to take steps to sell or rent the Property which I would be precluded from doing if the Appellant was in possession of the Property.

6.         In circumstances where I have been in possession of the Property since 28 May 2010 and where I have taken steps to secure and with a view to commencing remedial work on the Property, there is no basis for the Appellant to argue that any refusal by this Honourable Court to grant a stay would be prejudicial to the Appellant. I say and am advised that, having regard to the matters hereinbefore averred to, the balance of convenience favours me continuing in possession as receiver appointed over the Property. In this regard, I say and believe that damages are not an adequate remedy." (emphasis added)

12.              The Court unanimously refused the stay sought by Mr. Power. Macken J. delivered an ex tempore ruling in which it appears the Court considers that it was by no means clear that there was any invalidity attaching to the Receiver's appointment, and that allowing Mr. Power to remain in possession could prohibit or inhibit the Receiver in carrying out his function notwithstanding Mr. Power's proffered agreement to cooperate with the Receiver, and furthermore there was no evidence to show that Mr. Power himself would suffer any irreparable loss and damage between the hearing of the stay and the hearing of the appeal.

13.              Again, I should say that the decision of the Court in this regard is, in my view, unimpeachable. It is difficult to conceive of any court coming to a different conclusion. The final point touched on by the Court raised an important issue. Mr. Power had no personal right to occupy the premises and could only do so if the company was entitled to occupy the premises, which in turn depended on his contention that the receivership was invalid, a claim that the Court was entitled to treat with some scepticism. Even then it would be the company in liquidation which would have become entitled to possession, unless of course the appeal against the winding up order was also to succeed. Even if that claim succeeded, it was hard to see how any irreparable loss could be said to be suffered by Mr. Power as opposed to the company, and plainly the Bank and the Receiver were in a better position to meet any possible claim for damages on foot of the undertaking as to damages; whereas Mr. Power might not be able to meet any award of damages if he was permitted to remain in the premises and the injunction was later upheld, especially if in addition to any claim for damages for trespass, the Receiver lost the opportunity of a sale, particularly in a falling market.

14.              Importantly Macken J. concluded her judgment by urging both parties to make progress in the case. She said that "[b]oth parties and in particular Mr. Power as the moving party, must bring forward the appeal as speedily and as expeditiously as possible". She said that Mr. Power would have liberty to mention the matter to the Chief Justice in his Thursday list, with a view to having it heard on a Friday, it being apparent that it could be dealt with in less than half a day. She continued:-

"The Court is also extremely concerned that both parties, and in particular Mr. Kavanagh, should expedite the High Court proceedings which, in fact, are the proceedings on which all parties should be concentrating, because that is the venue where the substance of Mr. Power's complaints can be aired and determined properly."

15.              Neither party can be said to have complied with the directions of the Court in this regard. Mr. Power frankly conceded that he did not seek a hearing of the appeal on the interlocutory injunction and instead decided to concentrate his energies on the prosecution of the High Court case, a decision which led to a series of discovery applications. On behalf of the Receiver, it was acknowledged that while steps were taken initially, there was perhaps an understandable lack of enthusiasm about contesting the High Court case which would now in essence be Mr. Power's counterclaim, as Macken J. recognised. That would likely involve lengthy factual issues and a long hearing. At that time, it was apparent that the company was insolvent, and a liquidator appointed at the suit of the Revenue Commissioners. If this order was upheld on appeal, the Receiver believed and was advised that this step would bring the proceedings to an end since any claim would be one for the liquidator to pursue and the liquidator would not be disposed to pursuing it. In the event however, and remarkably, while an order for winding up was made on 8 December 2008, that was appealed by Mr. Power and that appeal was ultimately only heard and determined on 7 December 2017 with an order dismissing the appeal and varying the High Court order to appoint a different individual as the liquidator (see [2017] IESC 81). Even that did not bring this part of the process to an end because the liquidator has not purported to take over the proceedings but has adopted a somewhat neutral stance in relation to them indicating in correspondence through his solicitors that he had not "formally consented to Mr Power taking the ... proceedings" but his solicitors "have been aware of them". On the hearing of this appeal the liquidator was represented and informed the Court that the claim had not been assigned to Mr. Power.

16.              The progress of the proceedings in the High Court was initially reasonably prompt. On 9 March 2011 Mr. Power delivered a defence and counter-claim and on 14 July 2011 the Receiver and Bank sought to strike out the defence and counter-claim. On 8 June 2012, the High Court made an order striking out that original defence and counter-claim but ordered Mr. Power to deliver a defence in proper form within four weeks with liberty to name Ulster Bank as a counter-claim defendant. That amended defence and counter-claim was delivered on 6 July 2012 claiming inter alia that there was no valid debenture mortgage, that the sums received were repaid, and further sums were not attached to a loan offer. In February and March 2013 each party made requests for discovery from the other and on 29 May 2013 Mr. Power brought a motion for discovery which was heard on 24 July 2013 and which Charleton J. refused, considering that the voluntary discovery offered was sufficient. That decision was appealed by Mr. Power on 16 August 2013, and regrettably was not heard in the Supreme Court for some time, and no effort was made by either party to seek to expedite the hearing. Initially the claim was made the subject of a direction under Article 64 of the Constitution on 29 October 2014, transferring it to the Court of Appeal. Subsequently that order was reversed in a number of cases including this one to facilitate the disposal of appeals. On 7 December 2017 the Supreme Court delivered its decision refusing Mr. Power's appeal from the order winding up the company. On 18 December 2019, the appeal in relation to the discovery application was heard, and the order varied in relatively minor respects, see [2019] IESC 93.

17.              It must be frankly recognised that an unconscionable period elapsed between the hearings in the High Court on the winding up petition and the discovery application and the disposal of the appeals in each matter, and that period of delay has contributed in large part to the overall delay in this case. The delay is itself a good illustration of the near gridlock in the appeal system when appeals on all matters interlocutory or final, large or small, were brought to this Court direct from the High Court before the reform in 2014 created a separate Court of Appeal with sufficient resources to handle the case load. The position had been reached prior to 2014 in some terms in the Supreme Court and the Court of Criminal Appeal that all dates were assigned to urgent cases which could demonstrate a demand for priority and no so-called ordinary appeals could be listed. The default position was therefore lengthy delays for routine matters, and urgency could only be injected if one or both parties made concerted efforts to advance an appeal. In this case it was however entirely feasible that the appeal on the injunction could have been given priority, and specific provision had been made for an application to the Chief Justice in that regard with a view to an early hearing on an expedited basis, but neither party took that step.

18.              Discovery was made in accordance with the Supreme Court order on 15 September 2020 and thereafter Mr. Power embarked on a series of third party discovery applications against, inter alia, an insurance brokers and a firm of solicitors. As already mentioned on 22 May 2023 Wexford County Council issued the dereliction notice, on 9 June 2023 Mr. Power wrote to the Receiver in relation to that notice, and on 12 September 2023 the dereliction notice was issued addressed to the Receiver. In fairness, it should be said that it appears matters were addressed by the Receiver at that point to some extent at least, although there remains a dispute as to the condition of the premises.

19.              On 12 February 2024 Mr. Power brought a motion in the High Court to remove the Receiver, and to seek to recover possession of the property personally. Mr. Power also sought further discovery against the Receiver and Deloitte which was now the firm of accountants into which the firm of Kavanagh Fennell had merged. These proceedings prompted a motion by the Bank to strike out Mr. Power's counterclaim and his motion of 12 April 2024, on the grounds that he could not maintain the cause of action claim, as it was a claim on behalf of the company.

20.              The next step was for Mr. Power to issue a notice of motion on 23 July 2024 in this Court seeking various orders; allowing him unrestricted access to the Custom House Quay property to obtain estimates for the work done; requiring that the Receiver should put an independent architect in funds and make advance payments to any contractors; but also, at paragraph 12, seeking an order for committal and attachment against the Receiver for alleged failure to comply with the undertakings provided in the Supreme Court on 29 October 2010. It appears that Mr. Power contended that the three paragraphs of the affidavit of the Receiver set out at paragraph 11 above amounted to an undertaking to the Court to carry out remedial works on the property, and that accordingly it was suggested that the Receiver was in contempt of court. Mr. James Anderson, an insolvency practitioner with Deloitte, swore an affidavit in reply asserting that in the "relatively short time" within which the Receiver had been directed to file an affidavit, it had not been possible to have Mr. Kavanagh swear an affidavit. Mr. Kavanagh had retired in 2018 and since that time, in consultation with Mr. Kavanagh, Mr. Anderson had been the lead on any outstanding matters including this receivership. It is, nonetheless, surprising that in the face of an application for and an allegation of contempt of court, a receiver did not swear any affidavit even confirmatory of the contents of Mr. Anderson's affidavit.

21.              Mr. Anderson pointed out that the application and grounding affidavit made no reference to the parallel application before the High Court, and in respect of which Mr. Kavanagh had sworn an affidavit. Mr. Anderson referred to that affidavit and argued that Mr. Power had no entitlement to bring any application in these proceedings or indeed the counter-claim and informed the Court of the Receiver's application to strike out both the notice of motion and counter-claim. The affidavit also set out the condition of the property when the Receiver took possession, the works required to put it into tenantable condition, and how the required investment, which was large to put the property into tenantable condition, made little economic sense, and that the decision had been taken to secure the property and turn off the water supply. The property had not been abandoned but had been subjected to concerted vandalism which had given rise on a number of occasions to intentional water damage. In circumstances where the indicative values of the property in 2010 were in the range of €300,000 to €375,000, and where rental values were in the range of €16,000 to €20,000 per annum, it was, he said, apparent that any repair works other than what was strictly necessary to secure and maintain the fabric of the building would not be cost effective and would be unlikely to be recovered in terms of a higher price on the sale. Accordingly, it had been determined there was no clear commercial benefit in effecting any material remediation and renovation works. While the logic of this position is clear, it is apparent it had the consequence that even without the vandalism and water damage that was suffered, the premises would be left empty awaiting some resolution of this case which would allow the premises to be sold. Any such resolution was some distance in the future even as far as the High Court was concerned, and of course it could be anticipated that any decision in favour of the Receiver would be the subject of an appeal. In the event the premises have been vacant for 15 years, and subject to deterioration, vandalism and water damage.

22.              When Mr. Power's application was heard by this Court in November 2024 it was apparent that although the matters set out on affidavit in relation to the state of the premises gave rise to the most serious concern, none of the reliefs sought by Mr. Power could be granted by this Court. In particular, there was no question that paragraphs 4, 5, and 6 of the affidavit of the 29 October 2010 amounted to an undertaking to the Court and it could not accordingly be contended that the Receiver was in contempt of court. Nevertheless, this Court considered that the underlying matters required to be addressed and put the appeal of the interlocutory injunction in for hearing and directed the affidavits filed in respect of the July 2024 motion could be taken as evidence in respect of the appeal.

23.              On this appeal the Receiver accepts that it is now well established that the beneficiary of the grant of an interlocutory injunction is "duty bound to proceed with dispatch in his/her proceedings". This was set out in a judgment of Clarke C.J. in Charleton & Cotter v Scriven [2019] IESC 28 at paragraph 7 of his judgment:-

"7.1        It is unfortunate that such a long time has elapsed since the grant of the interlocutory injunction in this case, without the substantive proceedings being brought on for hearing. Interlocutory injunctions should not be treated as a means of attempting, in practice, to obtain a summary judgment. They are designed to do what they say, that is, to hold the situation until there can be a full trial. While there will inevitably be some cases where the result of an interlocutory injunction may, in practical terms, bring the proceedings to an end, it remains the case that there is an obligation on any party which has obtained an interlocutory injunction not to rest on their laurels, but to bring the matter on for full hearing. If the defendant does not co-operate, then any appropriate procedural measures may be adopted, either to have the proceedings finally determined by default or to ensure that they come to trial in a timely way.

7.2          This Court does not have sufficient information to form a view as to where the fault lies for these proceedings not having been finally determined, although it is clear that with even reasonable diligence, this case could now be well finalised, as a result of which the question of whether or not there should be interlocutory orders pending a full hearing would have become irrelevant. However, in a case where it could be shown that a plaintiff who had obtained a beneficial interlocutory injunction had not moved with reasonable expedition thereafter to bring the matter on for trial, it may well be open to, and appropriate for, a court to consider whether that party should retain the benefit of what was clearly intended to be a temporary order for a prolonged period of time."

24.              In Taite v. Beades [2019] IESC 92 Irvine J. said, at paragraph 31:-

"Lastly, it is helpful to repeat what Clarke C.J. said about the use of interlocutory injunctions in Charlton & Cotter v. Scriven. As an interlocutory injunction is merely a stepping stone towards a trial, a court must ensure that such relief is not, in practice, treated as a means of obtaining summary judgment against the defendant. He observed that "there is an obligation on any party which has obtained an interlocutory injunction not to rest on their laurels, but to bring the matter on for full hearing."

25.              Similarly, Hogan J. addressed this topic in Clare County Council v McDonagh [2022] IESC 2, [2022] 2 I.R. 122 and said at paragraph 91:-

"A further consideration is that, as Irvine J put it in Taite (echoing a point previously made by Clarke CJ in Charleton), an interlocutory injunction should be "merely a stepping stone" towards a trial and the courts "must ensure that such relief is not, in practice, treated as a means of obtaining summary judgment against the defendant."

26.              In Betty Martin Financial Services Limited v EBS DAC [2019] IECA 327, Collins J., then in the Court of Appeal, (at para. 110) cited the "well-established principle that, where a party has sought and obtained an injunction pending trial, that party is under particular duty to take all reasonable steps to ensure a timely trial". An example of this jurisdiction being invoked in practice, and injunction discharged due to a receiver's delay in advancing proceedings, is a recent High Court judgment of Cahill J. in O'Dwyer v Grogan [2024] IEHC 688.

27.              If, as is acknowledged, a court of trial has a jurisdiction to set aside an injunction that it has previously granted because of a delay in advancing the underlying proceedings, an appellate court is entitled to take any such delay in advancing the proceedings into account on an appeal against the grant of the interlocutory injunction. The court on an appeal is entitled to have regard to the situation as it stands, and is not confined to reviewing the matter in light of the evidence before the court granting the interlocutory injunction and the Receiver did not argue otherwise. Secondly, it is I think clear that the principles set out since Charleton v Scriven have particular application where, as in this case, an order is made which has the effect of giving to the plaintiff the relief being sought in the proceedings; particularly when that relief is mandatory in nature, and as here, involves granting to the plaintiff an effective entitlement to possession of premises. In such circumstances there is in the words of Collins J. a "particular duty to take all reasonable steps to ensure a timely trial".

28.              It is absolutely plain that the trial of this action has not taken place in any reasonable or timely manner. On the contrary, it has made virtually no progress whatsoever. Before addressing the Receiver's contention that he is nevertheless not to be blamed for this delay, it is necessary to address the fact that Mr. Power has not advanced the appeal against the interlocutory injunction even though he was urged to do so by this Court, and given permission to seek expedition in the hearing of any such appeal by an application to the Chief Justice. There has clearly been default on Mr. Power's part which is not excusable. His obligation was either to advance the appeal or discontinue it. Instead, he did nothing in that regard, preferring to proceed with the High Court hearing, albeit without much urgency. This failure to advance the appeal might itself weigh strongly against him in the exercise of the Court's discretion in respect of the interlocutory injunction. I am persuaded however that Mr. Power is not precluded by this default alone from advancing argument on this appeal. It is apparent that had the appeal been heard within any reasonable time from the dismissal of the application for a stay, that the result would almost inevitably have been to dismiss any appeal. It is important that the delay to date be addressed, and this can only be done if the appeal of the interlocutory injunction is heard and determined on its merits and in particular having regard to the matters which have occurred since 2010.

29.              Counsel on behalf of the Receiver sought to argue that there had been no culpable delay on the part of the Receiver in advancing the High Court proceedings. Each of the decisions made had a commercial logic and the delay was due to the sprawling counter-claim brought by Mr. Power, and his pursuit of discovery, and third party discovery, all of which have led to the proceedings becoming stalled. Implicit in this is the suggestion that any delay is the fault of Mr. Power, either alone or in combination with endemic delays in the court system.

30.              I do not shy away from the absolutely unsatisfactory nature of the delays which were encountered particularly in relation to appeals to this Court. It is also, I think, understandable that the Receiver was unenthusiastic about pursuit of the High Court proceedings. The matters the Receiver had to prove were limited - the execution of the mortgage debenture, the default, and the appointment of the Receiver. By contrast, the substance of the High Court proceedings was in truth Mr. Power's claim, correctly characterised as both sprawling and at times byzantine. It might seem counterintuitive to claim that the Receiver is in default for not advancing proceedings which in substance are a claim being brought against him. The Receiver might say that his proceedings in which the injunction was obtained are ready for hearing and have been for some time.

31.              I cannot accept, however, that this is a satisfactory excuse. The apparently limited benefit for the Receiver in pursuing the proceedings is itself a consequence of the fact that he has already obtained through the interlocutory injunction the effective relief he sought in the proceedings. That cannot be an argument for lack of enthusiasm about proceeding with the claim. Indeed, as already observed, with the grant of an interlocutory injunction, particularly one in this form, comes a particular duty to advance the proceedings and that meant ensuring so far as it was in the Receiver's power that the entire case was heard and disposed of. Furthermore, and in any event, there was a commercial imperative to ensuring that these proceedings were finalised, and if the Receiver's contentions were correct, that the defence and counter-claim were dismissed. While those proceedings were in being, they meant that it was virtually impossible for the Receiver to sell the premises, or even to rent them, particularly given the issues of maintenance and repair. If the Receiver was therefore to perform his function it was essential that the High Court proceedings be brought to a successful conclusion and any appeal determined. That means that the Receiver had a responsibility to see that the proceedings were advanced expeditiously in the High Court, and where appeals were made to this Court or the Court of Appeal, that applications were made for expedition on the grounds that determination of the appeals was preventing the advancement of the High Court proceedings (if indeed that was the case). The receiver had that obligation, did not discharge it, and cannot now, having failed to make any real attempt to advance the proceedings, seek to avoid responsibility by blaming either Mr. Power or indeed the court system.

32.              Counsel for the Receiver accepted, frankly, that the conduct of the receivership had not been satisfactory but contended that there were at least three reasons why the injunction should not be set aside in circumstances where the company was in liquidation and Mr. Power had no legal interest in the property. Somebody needed to be in control of the property and there was nobody with a legal interest to return to possession if the injunction was removed. The Receiver did three practical things which would not otherwise be done and which if not done might prejudice him. He secures the property (i.e. locks it), he inspects the property every fortnight, and most importantly he insures the property. It was submitted that it was difficult to see how the Receiver could maintain the policy of insurance if he does not have possession and that there was a public interest in having the property insured.

33.              These are relevant matters and illustrate the practical difficulty of resolving cases such as this, and if the effect of this appeal were to permit Mr. Power into possession, then these and other matters would have to be addressed to ensure that all interests were protected pending the trial. However, these matters also illustrate one further unsatisfactory feature of the receivership in this case. It is plain that costs continue to be incurred on the part of the Receiver which will ultimately be recouped from any sale, on the assumption that the receivership is not set aside. Therefore, even if the Receiver's claim succeeds in full, the outcome will have been the steady erosion of the capacity of any proceeds of sale to reduce the indebtedness of the company.

34.              The issues raised on behalf of the Receiver might be more troublesome, and this appeal might be more difficult, if the consequence of discharging the injunction was to allow Mr. Power into possession of the premises. However, the fact is that the Receiver is in possession, and the company which would otherwise be entitled to possession is in liquidation. Mr. Power has no personal right to attend on the premises and still less to exclude the Receiver. Accordingly, while setting aside the injunction would not have the dramatic effect it might otherwise have if the company was not in liquidation it seems all the more appropriate to set aside the injunction because of the failure of the Receiver to fulfil the particular duty on him to ensure the case was heard and determined within a reasonable timescale. Indeed if the company was not in liquidation or if Mr. Power had a claim to possession subject only to the Receivership I would have been minded to set aside the injunction on terms that permitted the company or Mr. Power to resume possession subject to terms which allowed supervision of the premises by the Receiver and protected any rental income.

35.              However, Mr. Power has no such claim to possession of the premises and setting aside the injunction will not allow him into possession. At one level that makes this appeal easier, albeit that the order will not have much practical effect. I would accordingly, unhesitatingly, allow the appeal and set aside the injunction. I should emphasise however that this does not give Mr. Power or indeed the company an entitlement to possession. The Receiver is in possession, and would be entitled to seek an appropriate order if any other party sought to gain access to or otherwise occupy the premises. The fact that this is a limited victory for Mr. Power does not mean that he should not be entitled to this success, and in any event the Court should take this opportunity of expressing its deep unhappiness with the manner in which the receivership has proceeded, or perhaps more accurately, not proceeded.

36.              The picture presented by this case is one that should be a source of considerable concern and dismay. One outcome is that premises in a town centre have lain idle for 15 years and been subject to vandalism and dereliction. That has consequences not just for the parties locked in these proceedings, but for neighbouring premises and the town itself. But that is only one symptom of a greater systemic problem. Security over commercial property is provided to facilitate the provision of credit necessary for productive commercial activity. Speed and simplicity in enforcement of security is a necessary part of that system. It is always unfortunate when a business or individual gets into financial difficulties, but from a broader perspective it is necessary that the position is addressed, resolved so far as possible, and, if necessary, the security enforced, the property recovered and sold, and put to productive use. It is important that borrowers know that there are clear consequences to failing to repay indebtedness, and that lenders know that there is an effective system of taking and, where appropriate, enforcing security. If not, lenders will either refrain from advancing credit, or will be obliged to charge more for it, all of which slows economic activity in a very competitive world.

37.              A case which excludes the borrower from the property may achieve the basic objective of ensuring that a borrower is not able to retain property when there is significant default, but does so by a process of attrition that can lead to a sense of injustice, without promoting any more positive outcome in respect of crystallising debt, reducing it by the proceeds of sale, and restoration of the premises to productive commercial activity. This case is therefore about something more than deploring delay and allocating blame. The common law adversarial system is, of necessity, party led. If professional people involved in debt recovery seek orders from the courts, that comes with significant responsibilities in pursuing the litigation, and they must expect to be held to account.

38.              The facts of this case are, I hope, particularly unusual, but it highlights more general issues. The following conclusions can be drawn:

(i)            An interlocutory injunction is a powerful remedy which allows an urgent and immediate order to be obtained. The value of such a procedure cannot be underestimated. However, where such a remedy is obtained on an interlocutory basis, particularly when it amounts in substance to the relief sought in the proceedings, 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. An interlocutory injunction is only a step in proceedings. Even though it may in practice bring many disputes to a resolution, its legal nature is that it is an order pending the final resolution of the proceedings, and those proceedings must, if not resolved by agreement, be brought to a conclusion. There is an onus on the party who obtains such an injunction to ensure that the proceedings are brought to a conclusion and 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. An appellate court may allow an appeal from such an order solely on the basis that there has been a failure to expedite the proceedings, and the moving party has obtained an interlocutory injunction granting to that party the effective relief which would be obtained in the proceedings.

(ii)         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, particularly one in strong terms, 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. This may be of benefit to both parties. It is an irony of this case, that had the injunction been refused, the plaintiff receiver would have had a greater incentive to seek to resolve the entire proceedings.

(iii)       A court should, where possible and through case management, 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. In this case, it is apparent that Mr. Power has 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 have now 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 can in any event advance such a claim. While courts are conscious of the benefit of allowing a party their day in court, it may not be of any assistance to let a case go to a full and expensive hearing to be dismissed on grounds that could have been determined speedily and more cheaply much earlier. This is all reflected in the new and more comprehensive version of Order 19, Rule 28: see Rules of the Superior Courts (Order 19) 2023 (S.I. No. 456 of 2023).

(iv)        In particular, where a company is in liquidation and a claim is sought to be asserted by an individual on behalf of the company, it must in most cases 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. There is wisdom in allowing parties to ventilate their disputes in court, but there is a balance, and courts should be able to determine whether it is necessary in any given case to take up scarce court time and require parties to incur substantial costs which may not be recoverable.

39.              In the circumstances I would allow the appeal and discharge the interlocutory injunction granted by the High Court on 5 May 2010.

 

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