Couple can remain in Dublin 4 property after judge refuses injunction

Two receivers have failed to get an injunction preventing a couple remaining in a Dublin 4 property which they allege is subject of a tenancy agreement. 

 

The injunction, concerning No 22 Lansdowne Road, was sought pending a full hearing of proceedings by receivers Shane McCarthy and Kieran Wallace against John, otherwise Jonnie, McCarthy and his wife Wendy. 

 

In opposing that case, the McCarthys claim they occupy No 22 under a tenancy which has not been validly terminated. 

 

Mr Justice Michael Quinn, while finding the receivers had made out a “strong” case for possession, refused the “mandatory” injunction because of delay of some five years by the receivers in seeking it. 

 

The McCarthys are directors of Emerald Properties (Irl) Ltd and the dispute arose from loans granted in 2004 by IIB Bank, later KBC Bank, to Emerald. Personally guaranteed by the McCarthys, the loans were later extended to some €13.2 million, repayable by June 2011. 

 

They were secured by a legal mortgage granted by Emerald in December 2004 concerning four properties at Lansdowne Road, numbers 18, 20, 22 and 24; two properties at Lansdowne Park at the rear of numbers 18 and 22 Lansdowne Road; and three apartments in The Plantations development, Herbert Street. All the properties were acquired by Emerald between 1989 and 1999. 

 

Mr Justice Quinn noted it was not disputed the mortgage is a valid legal mortgage and the receivers were validly appointed after demands served in 2014 on Emerald and the defendants for repayment of some €12.2 million went unpaid. 

 

In separate proceedings concerning issues raised by Emerald and the McCarthys about repayment of the loans, the judge said he had granted summary judgment as the 2011 extended maturity date for the loan had passed without repayment of the debt. 

 

In November 2018, KBC sold the loans to Beltany Property Finance DAC, which in May 2019 sought repayment of the loans under the McCarthys’ guarantees. 

 

Before that, in May 2018, the receivers demanded the McCarthys hand up vacant possession of No 22. The couple asserted, inter alia, they had kept the bank informed of the basis on which they had occupied No 22 and their solicitors said they were instructed to offer €2.3 million for No 18 Lansdowne Road. 

 

The receivers took proceedings in May 2019 seeking possession of No 22 Lansdowne Road and No 99 Lansdowne Park and in July 2019 sought an injunction restraining the McCarthy’s remaining in No 22. 

 

Opposing the injunction, Mr McCarthy said he and his wife moved into No 22 in 2013, occupied it with their son as their family home, were paying rent to Emerald and it was a “shock” to face an application for their removal. 

 

The judge said KBC was aware from at least January 2014, and the receivers were aware from August 2014, the McCarthys were in occupation of No 22 and were treating the rent as being paid to offset the balance of an unsecured loan due by Emerald to Mr McCarthy. 

 

Emerald was never granted consent by KBC to grant a tenancy to the defendants and the rent was not being applied to reduce the debt to KBC or Beltany, he noted. 

 

He could not preclude the McCarthys advancing assertions concerning tenancy at the full trial but considered the receivers had a “strong” case for a possession order. 

 

While noting there had been engagement between the sides, he would refuse the injunction because of the delay by the receivers in seeking it, he said. 

 

Addressing damages issues, he said although the receivers estimated a likely shortfall of some €2.3 million after the realisation of the properties towards meeting the loan debt, he was not persuaded any ultimate irrecoverability of that would be attributable to events between the hearing of this injunction application and the full trial.