BANK OF Ireland is entitled to proceeds of the sale or rental of houses built on developments in Laois and Wexford arising from debts of some €22 million owed to it by a company, the Commercial Court has ruled.
The orders, granted by Mr Justice Peter Kelly yesterday, relate to housing developments at Rinucinni, Portlaoise, and the Moyne housing development at Enniscorthy.
The orders were sought by Declan Taite, the receiver appointed by Bank of Ireland to Largreen Ltd and Sherside Ltd, against Event Horizon Ltd, Foley Street, Dublin; Mervyn Walsh, with addresses at Lansdowne Village, Dublin, and Monaco, and his sister Dorcas Walsh, in her capacity as a director of the companies.
Mr Walsh, a director of Largreen and Sherside and controller of Event Horizon, was ordered by the Commercial Court last April to pay €4 million to the bank under a personal guarantee related to the debts of Largreen. The guarantee was for a maximum €4 million.
Mr Walsh had last Friday unsuccessfully sought to adjourn yesterday’s proceedings and made a similar application through counsel yesterday which was also refused by the judge. Michael Cush SC, for the receiver, had strenuously opposed any adjournment.
Shortly after the adjournment was refused yesterday, Mr Walsh discharged lawyers whom he had instructed in the case just days earlier, his previous long-time lawyers having applied to come off record for him, and also left the court himself.
The case then proceeded in his absence but Mr Cush outlined to the court the defence that had been set out in written documents.
The defence asserted the bank was not entitled to the proceeds of sale or rent of the houses built.
Mr Walsh claimed the bank was always aware Largreen and Sherside were simply land-holding companies and not development companies and knew the funds were loaned onwards to Event Horizon to build the houses. Mr Walsh claimed that arrangement functioned satisfactorily until the bank appointed the receiver.
It was also claimed the houses could be dismantled from the lands as they involved fabricated steel bolted to steel and concrete foundations and, therefore, the bank did not have a charge over them. In his ruling, Mr Justice Kelly rejected this and all grounds of the defence.
He found it was not correct to say the houses could be easily dismantled. This could not happen without major damage. The houses were fixtures captured by the bank’s charge, he ruled.
The judge also said he was satisfied the bank was not aware until after the proceedings were taken of any licence agreements between Largreen and Sherside with Event Horizon.
He found the bank was aware Event Horizon was controlled by Mr Walsh but he ruled the licence agreements were never disclosed to it by Mr Walsh.
Mr Justice Kelly ruled that those licence agreements had no legal standing and rejected claims that the licences meant Event Horizon was entitled to the proceeds of sale or rent of the houses with no liability to pay debts due to Largreen or Sherside until after the last house was sold.
