Adelina LTD v Lartigue Enterprises LTD [in receivership] & Anor (Approved)

Factual and Procedural Background

The Plaintiff owns a corner unit within a multi-storey building previously used as a hotel ("the Building") in Ballybunnion. The Building, except for the Plaintiff's unit, was owned by the First-named Defendant and had been disused for a considerable time in very poor condition, notably suffering from water ingress through the roof. The Plaintiff’s tenant ceased paying rent in January 2020 and vacated in November 2020, allegedly due to damage caused by the Building’s condition.

The Second-named Defendant was appointed receiver over the First-named Defendant's assets, including the Building, on 16 July 2020. The Plaintiff sought urgent remedial works to the roof to stop water ingress and prevent structural collapse, initially through correspondence and later by commencing proceedings on 24 March 2021. The Plaintiff sought, among other reliefs, a mandatory injunction directing repairs to the Building to prevent further damage and nuisance.

The Defendants resisted the injunction application and contended that some remedial works were carried out, that the Building was not imminently dangerous, and that the Second-named Defendant was not liable. The Building was sold during the course of proceedings, which rendered the injunction application moot. The Plaintiff then withdrew the injunction application, and the Court was asked to determine the issue of costs related to the motions and applications made.

The Plaintiff also brought a second motion seeking various reliefs including replies to particulars, inspection, and disclosure of parties exercising control over the Building. The issues in this second motion were narrowed before the hearing.

Legal Issues Presented

1. Whether the Plaintiff was entitled to a mandatory injunction directing remediation of the Building’s roof and prevention of water ingress and structural damage.
2. Whether the sale of the Building rendered the injunction application moot and the consequences for costs.
3. The entitlement of the parties to costs in respect of the interlocutory injunction application and the second motion.
4. The appropriateness of ordering particulars and disclosure from the Defendants regarding agency, control, and insolvency.
5. The role and liability of the Second-named Defendant as receiver and agent of the First-named Defendant.

Arguments of the Parties

Plaintiff's Arguments

• The injunction application was necessary and justified due to the dangerous condition of the Building and urgent need for repairs.
• Pre-litigation representations by or on behalf of the Second-named Defendant were ineffective, with works only carried out after the injunction motion was issued.
• The works carried out by the Defendants were inadequate, as demonstrated by damage caused during Storm Barra.
• The Defendants, particularly the Second-named Defendant, lacked candour, including failing to disclose information about control and interests related to the Building, which caused additional costs.
• The Plaintiff was entitled to particulars and disclosure relating to agency, insolvency, control, and identity of parties receiving income from the Building.

Defendants' Arguments

• The injunction application lacked merit as the works sought were not urgently necessary, and adequate works were carried out.
• The Second-named Defendant was not liable to the Plaintiff for the requested works.
• The Plaintiff was aware from early on of the Second-named Defendant’s intention to sell the Building, which was publicly auctioned prior to the motion issuance and sold in October 2021, rendering the injunction application moot.
• The Plaintiff delayed unreasonably in prosecuting the injunction application.
• The Plaintiff did not raise issues about the involvement of Everyday Finance DAC sufficiently early and could have joined Everyday as a party earlier.
• The Plaintiff withdrew the injunction application and thus the Defendants were wholly successful and entitled to costs.
• The Plaintiff was not entitled to the relief sought in the second motion and should not recover costs.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analyzed the issues with a focus on the costs implications of the Plaintiff’s interlocutory injunction application, which had become moot due to the sale of the Building. The Court noted that the sale was an event within the Defendants' control but also that it was well-flagged and publicly known, reducing the basis for an automatic order for costs in favor of the Plaintiff.

The Court emphasized that the Plaintiff’s withdrawal of the injunction application was justified as the relief was no longer obtainable. It rejected the Defendants' submission that the Plaintiff was not entitled to prosecute the injunction application despite the flagged sale, noting the inherent uncertainties in sales processes.

Regarding the necessity and justification for the injunction, the Court acknowledged a clear dispute between expert opinions on the immediacy of structural risk and adequacy of works carried out. The Plaintiff’s expert predicted imminent risk of structural collapse without immediate repairs, while the Defendants’ expert accepted poor condition but disagreed that collapse was imminent.

The Court declined to resolve this expert dispute on a costs application, reasoning that such determinations require full trial evidence, including cross-examination, to avoid injustice. Consequently, it found both parties’ positions prima facie reasonable and inappropriate to fix costs liability at this interlocutory stage.

On the issue of works carried out post-motion, the Court found that the works did not correspond to those sought by the Plaintiff and were directed primarily at mitigating risk of falling debris rather than stopping water ingress. Thus, neither party was entitled to costs on that basis.

The Court considered the Plaintiff’s allegations of lack of candour by the Defendants, including delayed notification of the sale and incomplete disclosure of the contract. It found the delay in notification to be minimal and not determinative for costs. It also found no established lack of candour concerning agency or control issues at this stage, noting that the Plaintiff could have pursued these matters earlier and that fuller exploration would be appropriate at trial.

The Court addressed the Plaintiff’s delay in prosecuting the injunction application and found it not culpable, given the reasonable belief that works would be carried out and the Defendants’ requests to delay proceedings.

Finally, the Court considered the Plaintiff’s second motion and the narrowed relief sought. It granted some relief relating to particulars and information but declined to order broad disclosure or inspection without proper procedural compliance. The Court noted that both parties had some success and some failure on this motion.

Holding and Implications

The Court’s final decision was to RESERVE THE COSTS of the Plaintiff’s motion for a mandatory injunction to the trial of the action. This reflects the Court’s conclusion that it was not possible to justly adjudicate on costs liability at the interlocutory stage due to unresolved factual and expert disputes and the mootness caused by the sale of the Building.

Regarding the Plaintiff’s second motion, the Court indicated that costs would be costs in the cause, reflecting the mixed success of the parties on the issues raised.

The direct effect of this decision is that neither party is awarded costs at this interlocutory stage, and the issue will be reconsidered at trial when the substantive issues are resolved. No new precedent was established beyond the application of established principles on mootness, costs discretion, and particulars.