High Court says Receivers must progress litigation expeditiously
Locations
The High Court recently dismissed an injunction obtained by a Receiver preventing Borrowers from interfering with the collection of rent for a failure by the Receiver to progress the litigation brought against the Borrowers.1
Background
The Receiver was appointed over five properties owned by the Borrowers in January 2016.
The High Court had granted certain interlocutory orders sought by the Receiver in December 2022 and also made directions for the exchange of pleadings including a direction that the Receiver deliver a reply and defence to counterclaim by 2 May 2023. The Receiver breached the directions and the Reply and Defence were not delivered until 3 May 2024.
The Borrowers sought an Order discharging the Receiver's injunction based on the Receiver's delay and failure to comply with the Courts directions to progress the litigation to hearing.
Decision
The Court noted that there was no explanation in the replying affidavit's submitted by the Receiver to address the failure to comply with the Court's directions.
Furthermore, in considering the role of delay, the Court held that the important starting point is that the party benefitting from the injunction is bound to
"act expeditiously to get the proceedings concluded and not delay their resolution".
The Court further held that the question was whether the facts, in particular the Receiver's failure to advance the proceedings, rendered it just and appropriate to discharge the injunction.
In considering this, the Court noted that while an injunction had been granted, the judgment warned that it was “imperative” that the proceedings be expedited. Furthermore, the Court noted that while the injunction was not expressly conditional on compliance with the Court's directions, it was clear what was intended, and it was not for the Receiver to have the benefit of the injunction for almost two years.
The Court noted that in being granted the injunction, the Receiver was given a right to collect rents pending the trial, and that this had the effect of temporarily displacing the rights of the Borrowers. However, owing to the Receiver's delay, this temporary right continued for far longer than was intended.
This judgment serves as an essential reminder of the importance of efficiently progressing proceedings where an injunction is granted.
The full judgment can be accessed here.
1O'Dwyer -v- Grogan & Anor [2024] IEHC 688
Written by: Mark Woodcock and Dearbhla Walsh