In the matter of Ocean Point Development Company Ltd & Anor -v- Companies Acts [2012] IEHC 420 (12 October 2012)

In the matter of Ocean Point Development Company Ltd & Anor -v- Companies Acts [2012] IEHC 420 (12 October 2012)

Deposits paid by purchasers under sale and development/building agreements are assets assigned to the Bank under mortgage and debenture security documents; upon appointment of Receiver and crystallisation of floating charge, deposits are assigned in equity to Bank and Receiver is entitled to retain them in priority to purchasers' claims, regardless of purchasers' contractual entitlement to return of deposits or lien.

Citation
[2012] IEHC 420
Parties
Applicant (receiver): Martin V. Ferris; Secured Creditor: ACC Bank Plc; Respondent (company): Ocean Point Development Company Limited (in receivership); Respondent (asset Owner): Francis Dooley; Notice Party (purchaser, Unit 11): John Boyle; Notice Party (purchaser, Unit 17): Sean Roche; Notice Party (purchaser, Unit 17): Michael Carroll
Jurisdiction
Ireland
Judgment Date
12 October 2012
Procedural Posture
Application for Directions Under Companies Acts / Judgment on Application for Directions
Outcome
Application granted; directions issued.
Legal Topics
Receivership, Priority of Charges, Treatment of Deposits, Purchaser's Lien, Floating Charge Crystallisation
Company Law Property Law Insolvency Law Receivership Priority of Charges Treatment of Deposits Purchaser's Lien Floating Charge Crystallisation

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Parties

Martin V. Ferris

Applicant (receiver)

ACC Bank Plc

Secured Creditor

Ocean Point Development Company Limited (in receivership)

Respondent (company)

Francis Dooley

Respondent (asset Owner)

John Boyle

Notice Party (purchaser, Unit 11)

Sean Roche

Notice Party (purchaser, Unit 17)

Michael Carroll

Notice Party (purchaser, Unit 17)

Procedural Posture

Application for Directions Under Companies Acts / Judgment on Application for Directions

Legal Issues

  1. 1 Whether deposits paid by purchasers are assets assigned to the Bank under security documents
  2. 2 Whether purchasers have a lien over property for return of deposits
  3. 3 Effect of receivership and floating charge crystallisation on purchasers' rights

Ratio Decidendi

Deposits paid by purchasers under sale and development/building agreements are assets assigned to the Bank under mortgage and debenture security documents; upon appointment of Receiver and crystallisation of floating charge, deposits are assigned in equity to Bank and Receiver is entitled to retain them in priority to purchasers' claims, regardless of purchasers' contractual entitlement to return of deposits or lien.

Court Disposition

Application granted; directions issued.

Orders

  • Order under inherent jurisdiction: Receiver to treat €26,000 (Boyle, Unit 11) and €19,039.50 (Roche/Carroll, Unit 17) as assets assigned to Bank under Mortgage for Secured Liabilities.
  • Order under s.316 Companies Act 1963: Receiver to treat €93,900 (Boyle, Unit 11) and €13,960.50 (Roche/Carroll, Unit 17) as assets assigned in equity to Bank under Debenture for Secured Liabilities.