Proof of Merger in Mortgage Enforcement and Commercial Adequacy of Damages:
Commentary on Mulcaire & Ors v Capital Flow Group DAC & Gaynor [2025] IEHC 622

1. Introduction

This High Court judgment of Bolger J in Mulcaire & Ors v Capital Flow Group DAC & Gaynor ([2025] IEHC 622, 12 November 2025) sits at the intersection of banking, property, company and injunction law. It arises from a private equity lender’s attempt to enforce a mortgage over a long‑established high-end bridal and ladieswear boutique in Adare, Co. Limerick, following a corporate merger by absorption.

Three competing applications came before the Court:

• The Defendants’ application to strike out the entire proceedings under Order 19, rule 28 RSC as being bound to fail and/or having no reasonable chance of success;
• The Defendants’ application under s.123 of the Land and Conveyancing Law Reform Act 2009 (“LCLRA 2009”) to vacate a lis pendens registered against the boutique property;
• The Plaintiffs’ application for wide-ranging interlocutory injunctive relief to restrain any sale, remove the receiver, and restore the property and stock to the first plaintiff.

At the core of the dispute are four interlocking issues:

1. Whether Capital Flow Group DAC validly succeeded to the rights of Capital Flow (Commercial Real Estate) DAC (“CRE”) under a mortgage following a merger by absorption, and therefore had standing to appoint a receiver;
2. Whether the first plaintiff, Ms Kay Mulcaire, could plausibly maintain that she has “no interest” in the mortgaged property given the terms of the mortgage and a negative pledge clause;
3. Whether allegations that a different mortgaged property (“the Wild Geese property”) was sold at an undervalue can proceed without expert evidence at this stage;
4. Whether the closure of a long‑established boutique business on the mortgaged premises justifies interlocutory injunctive relief, or whether damages are an adequate remedy.

The decision is important for at least three reasons:

• It underscores that a lender relying on a statutory merger must be able to prove completion of that merger in order to defeat a borrower’s standing challenge at the strike‑out stage.
• It confirms that a pleaded declaration that a mortgage is void is sufficient to bring proceedings within s.121(2)(b) LCLRA 2009 and thereby justify a lis pendens, aligning with and operationalising dicta in Hinde v Pentire.
• It reinforces that a retail boutique, however longstanding or prestigious, is treated as a purely commercial enterprise for interlocutory injunction purposes: its loss can be compensated in damages, distinguishing cases involving family farms.

2. Factual and Procedural Background

2.1 The parties and corporate structure

(Judgment, para. 3)

The proceedings involve a web of interconnected companies under the control of the first plaintiff:

• First Plaintiff – Kay Mulcaire: a businesswoman resident in Co. Limerick and 100% owner of Countess Investment Holdings Ltd, which in turn is:
  • 99% owner of the Second Plaintiff, Isobel Fashion Ltd;
  • parent company of the Third Plaintiff, Clobel Fashion Ltd; and
  • parent company of the Fourth Plaintiff, Chloe Fashion Boutique Ltd.
• Second Plaintiff – Isobel Fashion Ltd: operates the “Isobel” boutique business and website, trading for approximately 30 years from the property at Isobel, Main Street, Adare, Co. Limerick (the “Property”). Since 1 January 2023 the business has been carried on in the name of this company, having previously been carried on personally by Ms Mulcaire.
• Third Plaintiff – Clobel Fashion Ltd: recipient of the original loan facilities (letter of 11 March 2022).
• Fourth Plaintiff – Chloe Fashion Boutique Ltd: said to hold title to the Property.

On the lender side:

• First Defendant – Capital Flow Group DAC: a private equity lender, alleged to have acquired CRE by merger by absorption on 15 August 2022.
• Second Defendant – Colin Gaynor: a receiver appointed (purportedly) by Capital Flow Group DAC over the Property and other secured assets.
• Capital Flow (Commercial Real Estate) DAC (“CRE”): not a party to the proceedings but central to the dispute. CRE was the original lender under a loan facility with Clobel Fashion Ltd (Third Plaintiff) on 1 March 2022.

2.2 The lending and security arrangements

(paras. 4, 9, 19)

Key financial instruments include:

• A loan facility dated 1 March 2022, granted by CRE to the Third Plaintiff, Clobel Fashion Ltd.
• A limited recourse guarantee and indemnity executed by the First Plaintiff in respect of Clobel Fashion Ltd’s obligations.
• A mortgage, charge and assignment dated 25 April 2022 by which the First Plaintiff charged, inter alia, the Adare Property as security for the loan.

Under the mortgage deed:

• The First Plaintiff represented that she was the legal and beneficial owner of the Property (clause 8.1(i)).
• She gave a negative pledge (clause 5.2) not to transfer the Property during the security period without the lender’s prior written consent.

The Plaintiffs do not dispute that substantial sums are outstanding under the facility. Their challenge is instead directed at who is entitled to enforce the security and how that enforcement has been conducted.

2.3 The alleged merger and appointment of the receiver

(paras. 4–7, 13–15)

The First Defendant asserts that on 15 August 2022 CRE was merged by absorption into Capital Flow Group DAC pursuant to the Companies Act 2014. On that basis, Capital Flow claimed to have succeeded to CRE’s rights under the mortgage and to be entitled to appoint a receiver.

However, all pre-appointment demand correspondence (22 May, 12 June and 26 June 2025) was written by the Defendants’ solicitors on behalf of CRE – a company which, on the Defendants’ own case, had ceased to exist for almost three years. The First Defendant was first mentioned in a letter of 8 July 2025, which incorrectly asserted that it had advanced the loan in 2022 (in truth it was CRE).

On 28 May 2025, Capital Flow Group DAC purported to appoint the Second Defendant, Mr Gaynor, as receiver over the Property by deed of appointment. Relying on this appointment, the receiver:

• wrote to the Plaintiffs in his capacity as receiver; and
• took possession of the Property and its contents on 26 June 2025, closing the boutique business and progressing toward sale.

The Plaintiffs challenge the validity of that appointment and the receiver’s ongoing possession and proposed sale.

2.4 Commencement of proceedings and lis pendens

(paras. 8–10)

The Plaintiffs issued plenary proceedings on 23 July 2025 and, contemporaneously, registered a lis pendens against the Property under s.121 LCLRA 2009. They sought ex parte interlocutory relief on 31 July 2025 but received only short service orders.

On 13 August 2025, the Defendants responded with:

• a motion to strike out the proceedings under O.19, r.28 RSC and
• a motion under s.123 LCLRA 2009 to vacate the lis pendens.

On 25 September 2025, the Plaintiffs delivered a statement of claim which expanded their reliefs to include a declaration that the mortgage deed and limited recourse guarantee are void because CRE was dissolved on 15 August 2022 and the statutory merger requirements were allegedly not complied with. The Defendants criticised the Plaintiffs’ failure formally to amend the plenary summons, but Bolger J declined to determine interlocutory applications on that pleading technicality.

3. The Claims Advanced by the Plaintiffs

(para. 9)

The Plaintiffs’ core claims, as distilled by Bolger J, are:

1. Challenge to the lender’s standing and the receiver’s appointment:
   • The mortgage deed is between the First Plaintiff and CRE; CRE was dissolved following merger in August 2022;
   • The Plaintiffs allege there is no evidence that the statutory preconditions for merger by absorption were complied with under the Companies Act 2014;
   • Accordingly, they claim Capital Flow has no entitlement to enforce the mortgage or appoint a receiver, and that the mortgage is void.
2. Claim that the First Plaintiff has no interest in the Property:
   • She avers that the Property is “held” by the Fourth Plaintiff, Chloe Fashion Boutique Ltd (with historical transfers from the Third Plaintiff, Clobel Fashion Ltd), and that the Defendants thus have no recourse to her interest.
3. Alleged sale of the “Wild Geese” property at an undervalue:
   • The Plaintiffs allege an identified third party made a higher offer than the sale price accepted by the receiver;
   • They claim the receiver breached his statutory duties by failing to secure the best price reasonably obtainable and by refusing to engage with the alternative purchaser.
4. Business closure and brand destruction:
   • The Plaintiffs say the receiver, without lawful authority, closed their retail business at the Property, causing “catastrophic disruption and destruction” of the brand and business operation.

A further contention – that the Property was not in fact included in the mortgage – was abandoned for the purposes of the interlocutory applications.

4. Summary of the Judgment

(paras. 2, 15–17, 21–25)

Bolger J’s key orders and holdings can be summarised as follows:

1. Strike out application (O.19, r.28 RSC)
   • The Court struck out only the First Plaintiff’s claim that she has “no interest” in the Property as being bound to fail / having no reasonable prospect of success.
   • The Court refused to strike out:
     • the Plaintiffs’ challenge to Capital Flow’s entitlement to enforce the mortgage and appoint the receiver (including the allegation that the mortgage is void for want of a valid merger); and
     • the claim that the Wild Geese property was sold at an undervalue.
2. Lis pendens (s.121 & s.123 LCLRA 2009)
   • Because the Plaintiffs seek a declaration that the mortgage is void – a claim engaging s.121(2)(b) LCLRA 2009 – and because that claim is not so weak as to be bound to fail, the Court refused to vacate the lis pendens over the Property.
3. Interlocutory injunctive relief
   • Even assuming arguable claims, the Court held that all alleged losses – including closure of the long-established boutique, disruption of its brand, and lost trading opportunities (e.g. Christmas market, Ryder Cup traffic) – are quantifiable in damages.
   • Damages are therefore an adequate remedy and the balance of convenience / justice favours refusing injunctive relief.
   • The Court thus refused the Plaintiffs’ application for an injunction to restrain sale, remove the receiver, or restore possession and stock.
4. Costs
   • Given that each side had mixed success and that the core issues will fall for full trial, the Court’s indicative view was that costs of these motions should be reserved to the trial judge.

5. Legal Framework and Precedents

5.1 Strike out under Order 19, rule 28 RSC

(para. 11)

Order 19, rule 28 (as amended in 2023) preserves the established principles governing striking out of proceedings. The jurisdiction is:

• to be exercised sparingly;
• not a mechanism to invite the Court to resolve complex issues of fact or law on a summary basis;
• concerned with whether, taking the Plaintiff’s case at its highest, the pleaded facts, if proved, would disclose a cause of action.

Bolger J relied on the Supreme Court in Keohane v Hynes [2014] IESC 66 and the High Court in Salthill Properties Ltd v Royal Bank of Scotland [2009] IEHC 207:

“An application to dismiss … as bound to fail ‘is not a means for inviting the court to resolve issues on a summary basis… the jurisdiction is to be sparingly exercised… rather than where the Plaintiffs’ case is very weak or where it is sought to have an early determination at some point of fact or law’” (Keohane v Hynes, paras. 6.5–6.6).

And:

“If those facts would, if proven, give rise to a cause of action, then ‘the proceedings do disclose a potentially valid claim’” (Salthill Properties, para. 3.12).

Accordingly, the Court must assume that the Plaintiffs can prove the facts they assert, and only strike out if, even on that assumption, the claim cannot succeed.

5.2 Lis pendens under s.121–123 LCLRA 2009

(paras. 8, 15–17)

Sections 121–123 LCLRA 2009 regulate:

• the registration of a lis pendens (a notice that litigation concerning an interest in identified land is pending); and
• the circumstances in which the Court may vacate such a notice where the action is not within s.121(2) or is frivolous, vexatious or otherwise abusive.

Section 121(2)(b) notably includes proceedings in which a party seeks a declaration that a mortgage is void. In Hinde v Pentire Property Finance DAC & Anor [2018] IEHC 520, Costello J held that:

• if the plaintiff’s interest in the land itself is not in dispute and no relief is sought regarding the validity of the mortgage, then a lis pendens may not be justified;
• but “if the plaintiff had sought a declaration that the mortgage should be declared void, this would come within the scope of s.121” (para. 46).

Bolger J applies that dictum, emphasising that because the Plaintiffs in Mulcaire in fact do seek a declaration that the mortgage is void, they are within s.121(2)(b). Given also that that claim is not “so fragile as to be bound to fail”, the Court refused to vacate the lis pendens.

5.3 Interlocutory injunctions and adequacy of damages

(paras. 23–24)

The modern statement of the Irish interlocutory injunction test is found in the Supreme Court’s decision in Merck Sharp & Dohme v Clonmel Healthcare Ltd [2019] IESC 65, per O’Donnell J. The core stages are:

1. Fair question to be tried (or arguable case);
2. Adequacy of damages:
   • Is an award of damages an adequate remedy for the plaintiff if the injunction is wrongly refused?
   • Will the defendant be adequately compensated in damages if the injunction is wrongly granted?
3. Balance of convenience / justice, in which the adequacy of damages is usually the most important element.

In Nihill v Everyday Finance DAC & Ors [2022] IEHC 484, Dignam J held that a family farm may not be a “purely commercial enterprise” for these purposes, such that damages might not be an adequate substitute for loss of the farm as a home and way of life.

Bolger J distinguishes Nihill, holding that a retail fashion boutique, however niche, is purely commercial and that even the alleged “catastrophic” damage to brand and business is quantifiable in damages. No expert evidence was advanced to the contrary.

5.4 Negative pledge & transfer of mortgaged property: Fennell v N17 Electrics

(para. 21)

In Fennell & Anor v N17 Electrics Ltd [2012] IR 634 (Dunne J), the High Court held that a transfer of mortgaged property in breach of a negative pledge clause is not binding as against the mortgagee. The mortgagee can treat such a transfer as ineffective in priority terms, maintaining the security over the property despite any intra-group or third‑party transfers.

Bolger J applies this reasoning to the Plaintiffs’ asserted transfers of the Property between their own companies, assessing whether the First Plaintiff can plausibly deny any interest in the Property in light of:

• her mortgage representations;
• the negative pledge; and
• the lack of evidence of a valid, lender‑consented transfer.

6. Analysis by Issue

6.1 Challenge to Capital Flow’s standing and the receiver’s appointment

(paras. 13–17)

(a) The Plaintiffs’ position

The Plaintiffs do not dispute that they owe “substantial monies” under the CRE loan. Their attack is targeted at the identity and authority of the enforcing party and the legitimacy of the receiver’s appointment. They contend:

• The mortgage is between the First Plaintiff and CRE, a company that ceased to exist after an alleged merger in August 2022.
• There is insufficient evidence that a valid merger by absorption under the Companies Act 2014 was completed so as to vest CRE’s rights in Capital Flow Group DAC.
• The only document relied upon by the receiver is a special resolution of CRE dated 15 August 2022 approving the “proposed” merger and authorising directors to complete it. No evidence of completion or CRO filings was produced on affidavit.
• All pre-appointment solicitor correspondence was issued in the name of CRE, which (on the Defendants’ own assertion) no longer existed at that time.

The Plaintiffs accordingly assert:

• Capital Flow never became entitled to enforce the mortgage;
• the purported appointment of the receiver is void; and
• the mortgage is void and/or unenforceable, justifying a declaration to that effect and the maintenance of a lis pendens.

(b) The Defendants’ evidence and its deficiencies

The Second Defendant, the receiver, swore an affidavit stating that CRE approved the proposed merger and its directors were authorised to complete it, exhibiting the special resolution. He also said he swore the affidavit “on his own behalf and on behalf of the First Named Defendant”.

However:

• He admitted that he never had any role in Capital Flow Group DAC and did not state that he acted as its servant or agent.
• His means of knowledge clause did not explain how he knew the merger had been “effected”, apart from exhibiting CRE’s special resolution approving the proposed merger.
• No evidence was put before the Court of the completion of the merger or of the necessary filings in the Companies Registration Office (CRO), despite defence counsel’s assertion from the Bar that most documents (except the draft terms of merger) were publicly available in the CRO.

In short, there was no direct evidence of a completed merger.

(c) The Court’s approach at the strike-out stage

Applying the strike‑out test, Bolger J emphasised that the Court must:

• take the Plaintiffs’ case “at its highest”; and
• ask whether, if their allegations were proved, the claims would disclose a valid cause of action.

On the available affidavit evidence, the judge could not say that the Plaintiffs’ challenges to:

• the validity of the alleged merger by absorption, and hence to
• Capital Flow’s entitlement to enforce and appoint the receiver,

were “bound to fail” or had “no reasonable prospect of success”. This was especially so given:

• the lack of documentary proof of merger completion;
• the use of CRE (apparently dissolved) in pre‑appointment correspondence; and
• the specific relief sought: a declaration that the mortgage is void, bringing the matter squarely within s.121(2)(b) LCLRA 2009.

Accordingly, the Court:

• refused to strike out that portion of the claim; and
• refused to vacate the lis pendens because the claim engaged a “right or interest in land” within s.121(2)(b) and was not so weak as to be abusive.

(d) Legal significance

This aspect of the judgment carries an important practical message for lenders and receivers:

• Where enforcement rights rest on a statutory merger by absorption, the enforcing entity must be able, if challenged, to produce clear evidence of completion of the merger (not just shareholder approvals).
• It is insufficient, at least at strike‑out stage, simply to assert that merger documentation exists in the CRO without actually exhibiting it or explaining the chain of title.
• Failing such proof, a borrower’s challenge to the lender’s standing and the consequential validity of a receiver’s appointment may proceed to trial.

The Court does not decide that the merger was invalid or that the appointment was unlawful; it simply holds that those issues require full trial and cannot be summarily disposed of.

6.2 The First Plaintiff’s claim she has “no interest” in the Property

(paras. 18–21)

(a) The Plaintiff’s sworn evidence

In her second affidavit (7 September 2025), the First Plaintiff avers:

“I say that I have no interest in the said property, Isobel’s Boutique, in circumstances where the said property is held by Chloe Fashion Boutique Ltd, having been transferred from Clobel Fashion Ltd to Chloe Fashion Boutique Ltd in the year ended 30 June 2003.”

She relied on financial statements of the Fourth Plaintiff (Chloe) for the year ended 30 June 2024, which indicated:

• she is a director;
• she holds all shares in the parent company, Countess Investment Holdings Ltd; and
• the Property is included in the accounts with a net book value of €1,507,009, but with a note that:

  “Although the asset [the Property] is included in the financial accounts for the company as at the year ended 30 June 2024, it does not have a marketable title to the property which has not been formally registered in the name of the company. Stamp duty in respect of the transfer remains unpaid.”

There were no documents exhibited evidencing a formal transfer of title to Chloe, nor any explanation as to why the accounts were unsigned by directors or accountants.

(b) The mortgage deed and negative pledge

Critically, when the First Plaintiff executed the mortgage with CRE in April 2022, she:

• expressly represented and warranted that she was the legal and beneficial owner of the Property (clause 8.1(i)); and
• agreed in a negative pledge (clause 5.2) not to transfer the Property during the security period without the lender’s prior written consent.

No evidence was produced – not even an averment – that:

• the lender ever consented to any transfer; or
• any “proper conveyance” was executed to vest legal title in Chloe.

(c) The contradictory oral argument

In oral submissions, counsel for the Plaintiffs sought to row back from the affidavit, suggesting that the First Plaintiff had only a “limited legal interest” and that if any transfer occurred, it might have involved only beneficial, not legal, ownership. Counsel asserted that no valid conveyance had taken place.

However:

• this contradicted the First Plaintiff’s sworn averment that she had “no interest”; and
• no rectifying or clarifying affidavit was filed to correct or explain the earlier sworn statement.

(d) Application of Fennell v N17 Electrics and the Court’s conclusion

Bolger J reasoned that:

• If the Property was in fact transferred to Chloe or any other company, such a transfer, effected without lender consent, would have been in breach of the negative pledge and, per Fennell v N17 Electrics, would not bind the mortgagee.
• If no valid transfer occurred (as counsel now suggested), then the First Plaintiff plainly retained at least some interest in the Property, contradicting her affidavit that she had “no interest”.

In either scenario:

• the First Plaintiff’s contention that she has no interest in the Property is untenable; and
• that portion of the claim is “bound to fail and/or has no reasonable prospect of success”.

Accordingly, the Court struck out this aspect of the claim under O.19, r.28 RSC.

Bolger J indicated she would hear counsel on how this should be reflected in the statement of claim – implicitly signalling that pleadings must be brought into line with this ruling and with the Plaintiff’s actual legal position.

(e) Practical implications

This element of the judgment sends a clear warning to borrowers:

• Intra‑group “paper” transfers of mortgaged assets, especially where not perfected by proper conveyance or lender consent, will rarely assist in avoiding the reach of an existing mortgage.
• Negative pledge clauses have real teeth: any transfers in breach may be disregarded by the mortgagee.
• Borrowers cannot safely assert that they have “no interest” in mortgaged property without carefully considering the mortgage terms, actual conveyancing steps, and the Fennell principle.

It is also a reminder on affidavit discipline: conflicting positions between sworn affidavit and oral submissions, without corrective affidavits, undermine credibility and risk parts of the case being struck out.

6.3 Alleged undervalue sale of the Wild Geese property

(para. 22)

(a) Plaintiffs’ allegation

The Plaintiffs allege that:

• there was a prospective third‑party purchaser for the Wild Geese property who offered a higher purchase price than the price actually accepted by the receiver;
• the receiver failed to engage with this alternative purchaser and instead accepted a lower price; and
• this amounted to a breach of the receiver’s statutory duty to obtain the best price reasonably obtainable.

(b) Defendants’ response

The receiver’s affidavit response was to describe the allegation as “disingenuous” on the basis that the First Plaintiff herself had previously made a lower offer, allegedly in the context of a buy‑and‑lease‑back arrangement.

However, critically:

• he did not deny that an identified third party had made a higher offer than the accepted sale price; and
• no explanation was offered as to why that higher offer was not pursued or why accepting a lower offer was justified by commercial or timing considerations.

The Defendants also argued that this claim was in the nature of a professional negligence allegation against the receiver and thus could not proceed in the absence of an expert report.

(c) The Court’s approach

Bolger J declined to accept that the absence of expert evidence at this interlocutory stage rendered the claim “bound to fail”. She noted that:

• the receiver had not contradicted the core factual allegation that a higher offer existed; and
• the question whether his actions met the standard of a reasonably prudent receiver with a duty to get the best price reasonably obtainable is a matter for trial, potentially with expert evidence to be adduced there.

Thus, the Court refused to strike out the undervalue allegation.

(d) Significance for receivers

While not deciding the merits, this aspect underscores that:

• Receivers must be prepared to justify their sale strategy and price, especially where credible evidence of higher offers exists.
• Failure to engage with higher offers, if proved, may expose receivers to claims for breach of duty.
• Courts are reluctant to shut down such claims summarily where basic factual allegations are not disputed, even in the absence of early expert reports.

6.4 Interlocutory injunctive relief and adequacy of damages

(paras. 23–24)

(a) The relief sought

The Plaintiffs sought wide‑ranging interlocutory orders including:

• restraining the Defendants from selling the Property;
• terminating the appointment of the receiver; and
• requiring the return of the Property and its stock to the First Plaintiff.

They relied heavily on:

• the longevity and reputation of the “Isobel” boutique (trading circa 30 years);
• its niche position in high-end bridal and ladieswear, catering to both domestic and international clientele; and
• the alleged catastrophic impact on brand, goodwill, and business operations caused by the sudden closure and loss of Christmas and future event‑related trading (including the Ryder Cup custom).

(b) The Court’s focus on adequacy of damages

Bolger J adopted the Merck v Clonmel framework and, in particular, emphasised that adequacy of damages is “the most important element” in the balance of convenience in most cases.

Even assuming (without deciding) that the Plaintiffs had established a fair question to be tried on some of their claims, the judge held that:

• the business at the Property was ultimately a retail, profit‑making commercial venture;
• any losses caused by closure – loss of profit, loss of brand value, loss of customers, disruption to operations – are capable of being quantified in damages like any other commercial enterprise; and
• the Plaintiffs had put forward no expert evidence or economic analysis to support a contention that the loss was inherently unquantifiable.

The Plaintiffs sought to analogise their position with Nihill v Everyday Finance, where Dignam J had held that a family farm “is not a purely commercial enterprise”, implying that damages might not be an adequate remedy for its loss. Bolger J firmly rejected that analogy:

“[A] farm… is not a purely commercial enterprise. That can certainly be the case with a farm but not with a retail premises, no matter how long established or niche a boutique it might be or regardless of the loss of the pending Christmas market or even pending Ryder Cup business.” (para. 24)

Accordingly, the Court held that damages would be an adequate remedy for the Plaintiffs if they ultimately succeeded at trial, and that this was sufficient to tip the balance of convenience and justice against the grant of an injunction.

(c) Consequences

The Plaintiffs thus remain:

• without possession of the Property;
• subject to the receiver’s continuing control and potential sale of the Property; and
• remitted to a claim for damages if, at trial, they succeed on any of their substantive challenges (e.g. invalid appointment, undervalue, brand destruction).

For practitioners, the decision clarifies and confirms that:

• Longstanding commercial businesses, even with strong goodwill, will generally be treated as “purely commercial” for the purposes of the adequacy of damages inquiry.
• Emotionally compelling narratives about the uniqueness of a business or its local importance are insufficient, without robust evidence, to turn a commercial loss into an irreparable injury.
• Claimants seeking to argue that commercial losses are not amenable to quantification should consider adducing expert valuation evidence at the injunction stage.

7. Complex Concepts Explained

7.1 Lis pendens

A lis pendens is a formal notice registered against the title of land to signal that litigation relating to that land is pending. Under s.121 LCLRA 2009:

• Only certain types of actions (including actions seeking to declare a mortgage void) can ground a lis pendens.
• Its effect is to warn potential purchasers or mortgagees that the property is subject to ongoing litigation and that their title may be affected by the outcome.

Section 123 allows a defendant to seek an order vacating a lis pendens if:

• the action is not one referred to in s.121(2); or
• the proceedings are frivolous, vexatious or otherwise an abuse of process.

In Mulcaire, because the Plaintiffs seek a declaration that the mortgage is void, their case falls squarely within s.121(2)(b), and because the Court found that claim arguable, the lis pendens remained in place.

7.2 Merger by absorption under the Companies Act 2014

A merger by absorption occurs where one company (the acquiring company) absorbs another company (the transferor), with the transferor’s assets and liabilities transferring to the acquiring company and the transferor being dissolved without going into liquidation.

The Companies Act 2014 prescribes specific procedural steps, such as:

• preparation and approval of draft terms of merger;
• special resolutions by each merging company;
• directors’ reports and statutory declarations;
• filings with the Companies Registration Office; and
• in certain cases, High Court approval or creditor protections.

Once completed, the acquiring company steps into the shoes of the transferor, including rights under security instruments. But, as Mulcaire demonstrates, a party relying on such merger must be able to prove completion and vesting – not simply assert that a merger was “proposed” or assumed to have taken place.

7.3 Negative pledge clause

A negative pledge in a mortgage or security document is a contractual promise by the borrower not to:

• create further security interests over the secured assets; or
• dispose of or transfer the secured assets,

without the prior written consent of the lender.

In Fennell v N17 Electrics, and as applied in Mulcaire, a transfer made in breach of a negative pledge is not effective against the mortgagee. The borrower (or related transferee) cannot rely on such a transfer to argue that the mortgage no longer attaches to the asset.

7.4 Limited recourse guarantee and indemnity

A limited recourse guarantee and indemnity means that the guarantor’s liability is confined to specified assets or to a capped amount, rather than being a full personal guarantee against all assets of the guarantor.

In Mulcaire, the First Plaintiff agreed to a limited recourse guarantee in favour of CRE, secured over the Property by mortgage. Thus, her potential liability is closely tied to the fate of that mortgage and the Property.

7.5 Receiver

A receiver is an individual appointed (typically under a mortgage or debenture) to take control of certain assets, realise them, and apply the proceeds toward repayment of the secured debt. A receiver owes duties:

• to act in good faith;
• to exercise reasonable care; and
• to obtain the best price reasonably obtainable on sale of the secured assets.

Challenges may be made to:

• the validity of the appointment (e.g. if the appointing lender lacks standing); and
• the manner of exercise of powers (e.g. selling at an undervalue, failing to market adequately, etc.).

In Mulcaire, both types of challenges are raised and allowed to proceed to trial (save for the “no interest” claim).

8. Impact and Broader Significance

8.1 For lenders and receivers

The judgment sends several clear signals:

• Documentary rigour is essential where enforcement rests on corporate reorganisations such as mergers by absorption. Lenders should:
  • retain and be ready to produce CRO filings and formal merger documentation; and
  • ensure that all demand and enforcement correspondence is issued in the correct name of the entity that currently holds the loan and security.
• Receivers must be careful in marketing and sale processes. Where higher offers are (or may be) available, they need to be considered and, where rejected, that rejection must be justified by cogent commercial reasons, well documented at the time.
• Technical challenges cannot be dismissed lightly at strike-out stage if the borrower raises a credible evidential gap about the chain of title or the lender’s standing.

8.2 For borrowers and guarantors

From the borrower’s perspective, the case illustrates:

• There is scope to mount an arguable challenge to enforcement based on:
  • defects in corporate merger procedures;
  • confusion or misdescription of the enforcement entity; and
  • lack of compliance with statutory formalities.
• However, borrowers must be cautious about:
  • attempts to distance themselves from ownership of mortgaged property through intra‑group transfers, particularly where such transfers breach negative pledges; and
  • making sweeping affidavit statements (e.g. “no interest”) that are contradicted by documents or later submissions.
• Challenges to the conduct of receivers (e.g. sales at an alleged undervalue) are more likely to reach trial if:
  • a higher offer can be clearly identified; and
  • the receiver provides no convincing explanation for accepting less.

8.3 For injunction law and commercial litigants

The decision reinforces a trend in Irish injunction jurisprudence:

• Commercial enterprises, even where long‑established and branded, are presumptively compensable in damages.
• To escape that presumption, claimants must produce persuasive evidence that their losses are inherently unquantifiable or that circumstances resemble those of non‑commercial property (such as family homes or farms).
• Nihill remains confined to its context; its principle is not lightly extended to ordinary commercial ventures such as boutiques or shops.

For practitioners seeking injunctions on behalf of businesses:

• There is a high bar to proving that loss of access to premises, goodwill, or trading opportunities is irreparable.
• Expert evidence (e.g., forensic accounting, valuation) may be required at the interlocutory stage if one wishes to argue that damage is not adequately compensable by money.

8.4 For property and insolvency litigation

More broadly, Mulcaire contributes to the development of Irish law on:

• the interface between company law (mergers) and security enforcement;
• the boundaries of the High Court’s strike‑out jurisdiction in complex property and insolvency disputes; and
• the criteria for vacating a lis pendens under s.123 LCLRA 2009.

By allowing the main structural challenges (standing, merger validity, undervalue sale) to proceed to trial, while removing only an unsustainable “no interest” assertion and denying interim injunctive relief, the Court:

• preserves the parties’ ability to ventilate serious issues at trial; but
• avoids paralysing the secured creditor’s enforcement efforts by interlocutory orders where damages can make the Plaintiffs whole if they win.

9. Conclusion

Mulcaire & Ors v Capital Flow Group DAC & Gaynor [2025] IEHC 622 is a nuanced interlocutory decision with three main doctrinal contributions:

1. Proof of merger in enforcement litigation: A lender relying on a merger by absorption under the Companies Act 2014 to justify its standing as mortgagee must be prepared to prove completion of that merger. Absent such proof, a borrower’s challenge to standing and to the validity of a receiver’s appointment cannot be dismissed as bound to fail, and may validly support a lis pendens under s.121(2)(b) LCLRA 2009.
2. Limits on borrowers’ ability to deny interest in mortgaged property: Negative pledges and representations of ownership in mortgage deeds, coupled with the principles in Fennell v N17 Electrics, constrain borrowers (and their related companies) from asserting that they have “no interest” in a property that has been mortgaged. Unsupported intra‑group transfers or mere accounting entries will not suffice, and unsustainable assertions can be struck out.
3. Commercial adequacy of damages and injunctions: In line with Merck v Clonmel, the Court reiterates that in purely commercial contexts – even involving longstanding, high‑end boutiques – damages will generally be an adequate remedy. The special treatment accorded to family farms in Nihill does not extend to retail premises. Absent strong evidence to the contrary, the balance of justice will not favour restraining enforcement by injunction.

Practically, the decision:

• leaves the main action alive on the issues of lender standing, merger validity, and receiver conduct;
• maintains a lis pendens over the Property pending trial;
• denies interim relief, leaving the receiver in possession and free, in principle, to continue enforcement; and
• reserves costs to the trial judge given the mixed outcome.

For future cases, Mulcaire will be cited for its insistence on documentary rigor in merger-based enforcement, its clarification of the scope of s.121 LCLRA 2009, and its robust application of the adequacy‑of‑damages principle in commercial injunction applications. It thus adds meaningful texture to Irish jurisprudence at the confluence of banking, company and property law.