In Wingview Limited t/a Elphin Public House v Ennis Property Finance DAC the High Court granted an interlocutory injunction prohibiting the defendant from appointing a receiver over Elphin Public House, the Dublin pub which featured in the film “The Van” (1996).
Wingview Limited was in default of its obligations under facilities made available to it by Anglo Irish Bank Corporation plc in the amount of approximately €2.5m that had been acquired by the defendant. Pursuant to a Settlement Agreement (the “Settlement Agreement”) entered into in November 2016 Wingview Limited acknowledged the debt, which was secured on Elphin Public House, and agreed, in return for the release of that security, to transfer a site behind the public house (the “Site”) to the defendant and to make a series of payments totalling €1.5m in final discharge of the secured debt (the “Settlement Payments”).
Wingview Limited obtained a loan offer from AIB to make the final payment of €1m that was due by 31 March 2017. The prior transfer of the Site to the defendant was an original condition precedent to drawing down the loan offer. Difficulties arising from newly imposed AIB requirements in relation to the treatment of the Site meant that the transfer was not completed by 31 March 2017 and Wingview Limited was unable to make the final instalment of the Settlement Payments by this date.
A revised loan offer from AIB issued in April 2017 that no longer required the prior transfer of the Site to the defendant, and instead merely required that the defendant provide certain written confirmations to AIB. The defendant agreed to do so but also sought to impose interest on the Settlement Payment due to Wingview Limited’s failure to make the final Settlement Payment by 31 March 2017. Correspondence between the parties reached an impasse and the defendant threatened to appoint a receiver over the Site. In response, Wingview Limited sought an interlocutory injunction.
Applying the Campus Oil test Mr Justice Haughton granted an interlocutory injunction preventing the appointment of a receiver. Mr Justice Haughton was satisfied that Wingview Limited raised a number of fair questions to be tried, most notably that the common intention and understanding of the parties was that Wingview Limited would be borrowing/refinancing in order to make the Settlement Payments and, as such, it was an implied term that the defendant would provide all necessary confirmations and perform all necessary actions as might reasonably be requested by Wingview Limited to permit the drawdown of funds.
In considering the adequacy of damages as a remedy Mr Justice Haughton commented that shareholders of Wingview Limited had an “emotional stake” in maintaining its business of 30 years. If Wingview Limited were to ultimately succeed, the assessment of damages would require extensive estimation that would involve “informed guesswork”. Mr Justice Haughton also held that the balance of convenience lay in favour of granting the interlocutory injunction and in doing so took into account a standstill agreement entered into by the parties following the granting of an earlier interim injunction. In granting the interlocutory injunction the judge required certain of the undertakings contained in that agreement to continue until the determination of the proceedings.
The case is instructive as to how the Court approaches applications to injunct the appointment of receivers or otherwise prevent the enforcement of security, particularly where a restructuring and/or settlement agreement has recently been made between the debtor and the secured lender.
Contributed by Rebecca O’Connor
Follow us @WilliamFryLaw
