Developer Brian Cunningham fails in High Court bid to get back possession of site off Dublin's Parnell Street
DEVELOPER Brian Cunningham has failed in a High Court bid to get back possession of a site off Dublin's Parnell Street from a company which was sold the property after his firm went into receivership.
Ms Justice Deirdre Murphy, describing Mr Cunningham's application to court as "entirely unmeritorious", said no evidence had been provided to back up his claim the receiver did not achieve the best possible price for numbers 17, 18 and 19 Moore Lane which had been used as a car park. They were sold for €550,000.
Mr Cunningham is director and holder of half the shares in Keelgrove Properties Ltd which went into receivership in December 2012.
The other half of Keelgrove was owned by Treasury Holdings whose principals, Johnny Ronan and Richard Barrett, Mr Cunningham says he has since fallen out with. Treasury itself had gone into liquidation the previous October.
Mr Cunningham claimed that as a consequence of Treasury's liquidation, he became entitled to their shares in Keelgrove by virtue of a
provision in their shareholder’s agreement.
He brought proceedings seeking a number of directions including that there was no validity to a 1997 mortgage between Keelgrove and Bank of Scotland (BoS) which took the mortgage over from Equity Bank.
He also challenged the validity of the subsequent appointment by BoS of receiver Tom Kavanagh over the Moore Lane properties which was subject of the mortgage.
He further claimed the sale of the property to a company called Kendlebell Mid-West Ltd should have been notified to Keelgrove. He
sought directions from the court on whether the best price had been achieved for it, a declaration the receiver had no power to sell, and
an order restoring possession to Keelgrove.
Ms Justice Murphy said the car park was taken over by Kendlebell in May 2014 after it bought the properties from the receiver.
Mr Cunningham asserted he had an oral lease granted to him by Keelgrove before it went into receivership.
He also claimed he is a creditor of Keelgrove for €412,611.
He said he used IR£164,000 his own money to buy the Moore Lane properties, with the rest of the funding coming from Treasury and the
mortgage. A maximum loan facility of IR£1m was advanced for the purchase on the basis of a charge over Keelgrove's assets.
Mr Cunningham and Treasury's Mr Barrett executed the mortgage deed on behalf of Keelgrove, the judge said.
Mr Cunningham maintained that at the time he executed the mortgage on behalf of Keelgrove, he was not in fact a director of the company and therefore it was not a valid legal mortgage. BoS said it was valid.
BoS later demanded repayment of €831,000.
Around December 2012, Mr Barrett and Mr Ronan were apparently removed from their directorships of Keelgrove at a board meeting, the judge said.
Mr Cunningham said he then had an oral arrangement with Keelgrove to rent the Moore Street properties for €200 per month once an issue over planning permission for use of them as a car park was resolved.
Kendlebell, which had bought the properties, disputed this.
Mr Cunningham later brought his proceedings against Kendlebell, the receiver and BoS.
Dismissing his application, Ms Justice Murphy said a number of reliefs sought by Mr Cunningham relating to the validity of the receiver's
appointment were not appropriate for the relevant part of company law under which he brought the case.
Even if she was wrong in that view, she believed Mr Cunningham and Keelgrove were not entitled to succeed. Keelgrove, as it is in
receivership, had no standing to do so and Mr Cunningham, who had standing, had not supported his application with evidence.
No evidence has been adduced to substantiate the claim that the receiver did not achieve the best price possible for the sale of the
properties at Moore Lane.
"There has been no evidence beyond bare assertion of impropriety in the sale" to Kendlebell, she said.
Mr Cunningham "sat back" and did nothing for 18 months before he decided to assert his rights, she said.