Business

Developer fails to get injunction against brother over parting agreement

Judge says case is essentially a dispute between two brothers which was ‘marked with acrimony’

Hugh Kavanagh has applied to re-enter a case he brought in 2020 against Greg which concerned alleged attempts to remove him as a director of 19 companies without notice and remove him from his executive role in the property and construction business the brothers had operated. Photograph: Aidan Crawley

Fri Jan 19 2024 - 17:53

Developer Hugh Kavanagh has failed to get a High Court injunction against his brother and former business partner Greg Kavanagh relating to an agreement the pair made to go their separate ways.

Mr Justice Rory Mulcahy said the least risk of injustice in the ongoing dispute between the brothers lay in not granting an injunction but in facilitating an early hearing of the main case.

Hugh has applied to re-enter a case he brought in 2020 against Greg which concerned alleged attempts to remove Hugh – also called Bernard – as a director of 19 companies without notice and remove him from his executive role in the property and construction business the brothers had operated for many years.

Hugh, and his own company Simlur Ltd, launched the proceedings against Greg’s Structured Marshalled Investments Ltd (SMIL) holding company, as well as firms in that group, including New Generation Homes Ltd and Isotonic Hotel Ltd.

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Greg denied all claims of wrongdoing.

Those proceedings were settled in May 2020 under an agreement that became an enforceable order of the court.

Two revised agreements followed but last year the dispute blew up again with Hugh alleging Greg had breached the latest September 2021 agreement which meant the original May 2020 agreement became operable. Greg denied there was any breach.

The re-entry of the 2020 proceedings to the court was not opposed by Greg. However, he strongly opposed a related injunction application by Hugh requiring compliance with certain obligations under the agreement pending the hearing of the main case.

The court heard that one of the central issues in the latest dispute was an obligation in the agreement that Hugh’s home in Braemor Avenue, Dublin, be transferred unencumbered to his wife Julie.

However, this did not happen and last year the lending institution which held the mortgage on the property appointed a receiver over it.

Greg opposed the injunction application and urged the dismissal of the entire case due to his brother’s conduct, including a withdrawn application to jail Greg for breaching a court order which Greg said was without foundation.

There were also allegations of intimidation of Greg’s wife while she was pregnant and of abusive texts.

Mr Justice Mulcahy, who noted this was essentially a dispute between two brothers which was “marked with acrimony”, said the September 2021 agreement imposed two substantial obligations on the defendants, one regarding transferring ownership of the Braemor Avenue house and the other to payments on Hugh’s Range Rover.

The court heard the payments on the Range Rover were ultimately made and there were arrears of less than a Euro.

The judge said the transfer of the house was a “straightforward way to resolve the dispute” but he was not persuaded that an arguable case had been put forward concerning this and it also seemed to him that Hugh had frustrated this from happening.

The court heard Greg tried to have the house valued to refinance the mortgage but Hugh refused to allow the valuation to take place.

The judge said Hugh argued that the May 2020 agreement subsisted in the event of a breach of the September 2021 agreement. However, he said no effort was made by Hugh to effect its terms including that the house should be transferred by September 2020.

Hugh had also complained that a large number of transactions, more than €50,000 each, had taken place which he was not notified as required by the agreement. However, again he had not taken action to deal with this, the judge said.

Having regard to how Hugh treated his obligations, the balance of justice lay against the court interfering at this stage, he said.

It seemed to the judge that Hugh Kavanagh had been “less than forthcoming” and this also lay in the balance of justice against granting an injunction.

The case comes back next week for an update on progress to bring the main case over the May 2020 agreement to an early hearing.

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