Don't look back in anger
A recent Supreme Court decision may provide a solution in some cases for insolvent debtors to regain possession of property that had passed into receivership some years ago. Gerard Nicholas Murphy BL says "definitely maybe"
A recent Supreme Court decision has touched on the problem of vacant properties arising out of insolvency or liquidation of individuals and businesses in the aftermath of the demise of the ‘Celtic Tiger’.
The Supreme Court delivered its judgment in Tweedswood Limited v Kavanagh ([2025] IESC 18) on 13 May 2025.
A receiver had been appointed over commercial property in Wexford belonging to a company that was now in liquidation.
The receiver was appointed in 2009 and obtained a court order for possession of the property on the basis that the receiver intended to sell the property. In the intervening years, however, nothing had happened and the sale had not proceeded.
As the Chief Justice noted in his judgment, as a point of reference, 2009 was when the band Oasis split up!
Going nowhere
Mr Justice Hogan in his judgment set the scene for the case in the following terms: “The town centre of Wexford offers striking views out to the harbour and marina. It is an area bustling with commercial and retail activity.
“A casual observer might well wonder why a property situated right in the heart of this town centre has remained vacant and unused since 2009. Indeed, at one stage, the property was entered on the register of derelict sites maintained by Wexford County Council under the Derelict Sites Act 1990.”
As the property had not been sold by the receiver since he obtained an injunction, the Supreme Court lifted the injunction. The Supreme Court was highly critical of the delays in this case.
The Chief Justice said that “speed and simplicity in enforcement of security” is a necessary part of the provision of “credit for productive commercial activity”.
Mr Justice Hogan was also critical of “the indifference, casualness, and inefficiency on the part of banks and receivers…”
I’m outta time
This is not an unusual case, and many valuers and estate agents will be all too familiar with the problem of vacant properties that appear to have remained vacant for a considerable period of time.
The Supreme Court decision may provide a solution in some cases for insolvent debtors to regain possession of property that had passed into receivership a number of years ago.
The Statute of Limitations 1957 usually provides that a mortgage over land should be enforced by a creditor within 12 years. At the end of this limitation period, the mortgage and the debt are normally extinguished.
In reality, however, the operation of the limitation period is often complicated if the debtor has acknowledged the debt over the years, or had been making part-payment of interest or principal for a time.
Nevertheless, there may be an opportunity to review older cases where a receiver was appointed over property that has not, in fact, been sold.
Some might say
In his judgment, Mr Justice Hogan said that there was a public interest in avoiding property remaining vacant and becoming derelict: “Dereliction has terrible consequences, not only for the property itself, but also for the surrounding area.”
In fairness to receivers, delays in selling commercial property are often complicated by litigation or complex issues relating to legal title to the property.
Another cause of delay may involve obtaining instructions from investment funds (often situated in other jurisdictions) that have acquired loans from the main banks and credit institutions.
If the Supreme Court decision is any indication, the courts may seek to find appropriate solutions in cases where properties remains unsold for a long period of time. In some cases, this may result in possession of property being returned to the debtor.
Gerard Nicholas Murphy is a barrister based at Courthouse Chambers, Washington Street, Cork.
LOOK IT UP
CASES:
- [2025] IESC 18
LEGISLATION: