Summary of High Court Opinion

Factual and Procedural Background

This opinion was delivered by Judge Bolger on 12 November 2025 in respect of three interlocutory applications heard on 26 September 2025. The proceedings were issued on 23 July 2025. The parties include the First Named Plaintiff (an individual), three corporate plaintiffs described in the pleadings as Company A, Company B and Company C, the First Named Defendant (an entity described here as Company D), and the Second Named Defendant (a receiver, described here as the Second Named Defendant). A separate entity identified in the claim as the original lender is described here as Company E.

Key factual elements, as set out in the statement of claim, include:

• The First Named Plaintiff is said to have been the owner of the business trading from the property at "[Number] Main Street" and is connected to Company A, Company B and Company C by shareholdings and directorship.
• Company E advanced loan facilities, formalised by a mortgage, charge and assignment dated 25 April 2022, secured, inter alia, over the property at "[Number] Main Street". The First Named Plaintiff executed a limited recourse guarantee and indemnity in relation to those facilities.
• The Defendants assert that Company E was merged by absorption with Company D on 15 August 2022, and that Company D is therefore entitled to enforce the mortgage and to appoint a receiver.
• Company D purported to appoint the Second Named Defendant as receiver by deed dated 28 May 2025. The Second Named Defendant took possession of the property and its contents on 26 June 2025.
• The Plaintiffs registered a lis pendens against the property pursuant to s.121 of the Land and Conveyancing Law Reform Act 2009 upon issuing the proceedings.

The three applications before the court were:

1. An application by the Defendants to strike out the proceedings pursuant to Order 19, Rule 28;
2. An application by the Defendants under section 123 of the Land and Conveyancing Law Reform Act 2009 to vacate the lis pendens;
3. An application by the Plaintiffs for injunctive relief restraining the Defendants from selling the property, terminating the receiver's appointment and returning the property and stock to the First Named Plaintiff.

Legal Issues Presented

1. Whether the Plaintiffs' proceedings (or parts of them) should be struck out under Order 19, Rule 28 on the basis they are bound to fail or have no reasonable prospect of success.
2. Whether the First Named Defendant (Company D) validly acquired Company E's rights by a merger by absorption and thus had lawful entitlement to appoint the receiver.
3. Whether the lis pendens registered by the Plaintiffs should be vacated under s.123 of the Land and Conveyancing Law Reform Act 2009.
4. Whether injunctive relief is appropriate to restrain the Defendants from selling the property, terminating the receiver's appointment and restoring possession of property and stock to the First Named Plaintiff.
5. Whether (as pleaded) the First Named Plaintiff has no interest in the property (and relatedly whether any purported transfer to Company B or Company C was valid and binding against the mortgagee).
6. Whether the sale of another property (referred to in the pleadings as the "Other Property") by the receiver was at an undervalue and whether the receiver breached statutory obligations in handling potential offers.

Arguments of the Parties

Plaintiffs' Arguments

• The Plaintiffs challenge the First Named Defendant's entitlement to enforce the mortgage and to appoint the receiver on the basis that Company E (the original lender) was dissolved on 15 August 2022 and there is no evidence that the statutory steps required for a merger by absorption were complied with.
• The Plaintiffs seek declarations that the mortgage deed and limited recourse guarantee are void because Company E was dissolved prior to enforcement by Company D.
• The First Named Plaintiff (in her affidavits) averred that she has no interest in the property, asserting that title is held by Company C (transferred from Company B), and relied on Company B's financial statements as supportive evidence of the property being included in that company's accounts.
• The Plaintiffs alleged that the receiver sold the Other Property at an undervalue and failed to engage with an alternative purchaser who offered a higher price.
• The Plaintiffs claimed the receiver unlawfully closed the retail business at the property, causing catastrophic damage to the brand and business, and sought injunctive relief to prevent sale and to restore possession.

Defendants' Arguments

• The Defendants asserted that Company E merged by absorption with Company D on 15 August 2022 and that documentation evidencing the merger was filed in the Companies Registration Office, save perhaps for one required document (the draft terms of merger).
• The Defendants challenged the Plaintiffs' pleadings and the form of some relief sought, including arguing that the claim about the Other Property amounted to a professional negligence claim against the receiver that would require expert evidence.
• The Defendants sought an order vacating the lis pendens and sought dismissal of claims they said were without reasonable prospect of success.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first set out the well-established approach to strike-out applications under Order 19, Rule 28: the court must take the Plaintiffs' pleaded facts at their highest and exercise the jurisdiction to dismiss sparingly. The court identified and analysed each pleaded claim in turn.

On the question of the merger by absorption between Company E (the original lender) and Company D (the First Named Defendant), the court noted that the Defendants relied on a special resolution of Company E dated 15 August 2022 approving a "proposed" merger and contended that most documentation evidencing the merger had been filed in the Companies Registration Office, save for one document. The Second Named Defendant swore an affidavit asserting the merger had been approved and that the directors were authorised to complete it, but the affidavit lacked a clear means of knowledge explaining how the deponent knew the merger had been completed. The court concluded that, in the absence of direct evidence before the court confirming that the merger was completed, the Plaintiffs' challenge to Company D's entitlement to enforce the mortgage and to appoint the receiver was not bound to fail and had a reasonable prospect of success at this interlocutory stage. For that reason, the court refused to strike out that aspect of the claim and refused to vacate the lis pendens in respect of the mortgage challenge.

Regarding the First Named Plaintiff's assertion that she had no interest in the property because title had been transferred to Company C (having been transferred from Company B), the court examined the pleaded material and the mortgage deed. The mortgage contained an express confirmation by the First Named Plaintiff that she was the legal and beneficial owner when she entered the mortgage on 25 April 2022, and contained a negative pledge clause prohibiting transfer without the prior written consent of the lender. No documents were exhibited by the Plaintiffs evidencing a valid transfer to Company C, no evidence of any consent being sought from the lender, and the Company B financial statements expressly stated the company did not have marketable title and that stamp duty on any transfer remained unpaid. Applying the principle in Fennell that transfers made in breach of a negative pledge are not binding against the mortgagee, the court concluded that the First Named Plaintiff's claim that she has no interest in the property was bound to fail or had no reasonable prospect of success. The court therefore struck out that aspect of the Plaintiffs' claim under Order 19, Rule 28.

As to the claim that the receiver sold the Other Property at an undervalue and failed to engage with a higher-offering purchaser, the court noted competing factual assertions: the Plaintiffs identified a third party who allegedly made a higher offer; the receiver replied that an earlier lower offer from the First Named Plaintiff complicated the position and that the transaction context (including a proposed buy-and-lease-back) affected matters. The Defendants characterised the claim as alleging professional negligence requiring expert evidence. The court recorded the parties' contentions and, contrary to the Defendants' request to strike out, declined to strike out that part of the claim at this interlocutory stage.

Finally, in assessing the Plaintiffs' application for injunctive relief, the court applied the established test including balance of convenience and the adequacy of damages. The court was satisfied that the Plaintiffs' losses from closure of the retail business were capable of quantification in damages and therefore damages would be an adequate remedy. The court distinguished authorities relied upon by the Plaintiffs (noting that Nihill concerned a farm and was not directly analogous to a retail boutique). On that basis, and applying Merck Sharp & Dohme on the importance of the adequacy of damages, the court refused to grant injunctive relief.

Holding and Implications

The court made the following orders and expressed related implications for the parties:

• The court struck out the First Named Plaintiff's claim that she has no interest in the property. The direct effect is that this specific pleaded assertion is removed from the proceedings and will not proceed to trial.
• The court refused to strike out the remainder of the Plaintiffs' claims. The Plaintiffs' challenges to Company D's entitlement (including a declaration that the mortgage is void and related relief within s.121(2)(b) of the Land and Conveyancing Law Reform Act 2009) remain to be determined at trial.
• The court refused to vacate the lis pendens. The lis pendens registered by the Plaintiffs on issuing the proceedings therefore remains in place for the present.
• The court refused to grant injunctive relief. The practical effect is that the Plaintiffs were not granted an order restraining sale, terminating the receiver's appointment or restoring possession; the court concluded that damages would be an adequate remedy for the commercial losses alleged.

Broader implications: The court emphasised that the contested issues (notably the validity of the asserted merger by absorption and the legality of the receiver's appointment) should be resolved at trial where evidence can be tested by discovery and cross-examination. No new legal precedent was established by this interlocutory decision; rather, the court applied established principles on strike-out jurisdiction, the adequacy of damages for injunctive relief, and the effect of transfers made in breach of a negative pledge.

Other Procedural Directions and Costs

The court indicated an intention to hear counsel on how the strike-out of the First Named Plaintiff's interest claim should be reflected in the statement of claim. The judge's indicative view on costs was to reserve all costs to the trial of the action, given wins and losses on both sides and that the substantive matters will require determination by a trial judge. The matter was listed for mention at 10:00am on 18 November 2025 for final orders and case management directions.

Representation (as described in the opinion)

Counsel for the Plaintiffs: Attorney McConnell, Attorney Cormack.

Counsel for the Defendants: Attorney Walsh, Attorney Conroy.