The High Court has discharged an injunction preventing several related corporate entities from dealing with the proceeds of the sale of Co Meath house that a businessman claims he is entitled to.
Mr Justice Rory Mulcahy said that Stephen Mahon had raised a fair issue in relation to his claim over funds generated from the sale of a property known as Trinity Haus, Quarry Lands, Dunboyne, Co Meath.
However the court was not satisfied to continue the injunction freezing the funds after the judge held that damages would be an adequate remedy if the plaintiff is successful at the full trial of his action.
Mr Mahon has sued related entities Yeronga Limited, Trinity Homes Limited, Project Trinity Homes Ltd, Project Trinity Homes 2 Ltd, Pierre Marc Lecompte, and Corey Hill Development Ltd.
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They deny any wrongdoing.
Mr Mahon claims the defendants wrongfully retained monies paid out by an insurance company over fire damage to his former family home.
Earlier this year Mr Mahon secured a temporary ex-parte High Court injunction restraining the defendants from moving monies outside of the jurisdiction, including insurance proceeds allegedly paid to them following a fire at that property.
Mr Mahon wanted the injunction to remain in place until the dispute between the parties had been determined.
That application was opposed by the defendants.
In his judgment on Friday Mr Justice Mulcahy said that while Mr Mahon had raised a fair issue to be tried regarding the proceeds of the sale of the house and the insurance payout, the court was satisfied to discharge the injunction previously granted.
The judge said that the orders sought by Mr Mahon could only remain in place if the court found that damages would not be an adequate remedy.
“All the plaintiff seeks in these proceedings is the payment of money,” the judge said.
The balance of justice also favoured the removal of the injunction. the court added.
Mr Mahon was not entitled to a Mareva type injunction freezing the funds over fears that the monies would be dissipated outside of the jurisdiction, the court also held.
Mr Mahon fell far short of the type of alleged unconscionable behaviour conduct where it could be inferred that the defendants intend to dissipate their assets for the purpose of avoiding a judgment, the judge said.
Neither did the court also accept Mr Mahon’s claim that the defendants’ only asset in this jurisdiction was the monies from the properties.
Yeronga, he said is the owner of a development site in Co Wexford, with a value of €570,000 the judge said.
The Judge said that the existence of the Co Wexford asset was clearly material, and the failure by the plaintiff to disclose it when he first sought the injunction was a breach of the golden rule in ex-parte applications to disclose all relevant matters to a court.
Mr Mahon’s claim concern an alleged failure to honour a settlement agreement between Mr Mahon, Yeronga and Trinity Homes over Trinity House.
Mr Mahon claims that he should be paid the insurance monies of over €230,000, as well as the majority of the proceeds of the sale of the property last March.
Mr Mahon says he was a director of Yeronga and Trinity Homes, a development company which had built social housing for several local authorities.
He claims Trinity House was owned by Yeronga, but was his family home.
In 2021 the companies got into financial difficulties largely caused by the Covid-19 outbreak and went into examinership.
The process was successful after secured creditors of the development firms became their exclusive shareholders.
As a result, his shareholding, employment and directorships with the two firms ended.
Issues remained over the property resulting in a settlement agreement.
Mr Mahon claims it was agreed that the property would be sold at a price no less than €500,000.
The settlement agreement also stipulated that Yeronga would retain €200,000 of the net sale price, while Mr Mahon would retain the balance.
The house, he claims, was to be sold for €810,000 in December 2022.
He claims that shortly before Christmas the upstairs of the property was significantly damaged by a fire and that sale did not proceed. He claims that last March the property was sold for €500,000.
He said that following correspondence with the defendant companies’ solicitors the firms received both the proceeds of the sale, and the insurance proceeds.
He claims that the companies should not be allowed to retain the insurance monies as this amounts to an unjust enrichment and the payment should be held in trust for him.
He claims the companies have claimed in correspondence that Yeronga had paid the insurance on the property and have alleged that Mr Mahon had breached the settlement agreement.
He rejects all those allegations.
He claims that the defendant firms are responsible to foreign investors based in China and Vietnam.
He claims that two of the defendants, Project Trinity Homes Ltd, Project Trinity Homes 2 Ltd, received loans as part of the Immigration Investment Programme (IIP).
Mr Lecompte, Mr Mahon also claims, is a director of those companies.
He feared that as the defendants were ultimately controlled by foreign entities, the proceeds of the sale and the insurance payout might have been removed from the jurisdiction.
Mr Mahon also claimed that unless given funds to rent or acquire a new property he fears he may become homeless.
In a reply, the defendants deny all claims against them, and reject the allegation that there was ever an intention to dissipate any funds out of the jurisdiction.
The reply says that granting of the injunction has resulted in an inability to access funds and has damaged the defendants’ ability to do business.
They also say that Mr Mahon has deliberately mischaracterised facts surrounding the sale of the house, which the defendants say was not his family home.
Mr Mahon had disrupted the sale of the property, they claim.
They claim that Mr Mahon breached the settlement agreement. They have brought a separate claim against him where they seek a declaration that Mr Mahon is not entitled to any payment arising out of the settlement agreement.
The defendants also claim that Mr Mahon failed to make disclosures to the court of relevant material about the assets, and the operations of the companies that resulted in them having to enter the examinership process.
They also argue that several of the parties sued should not have been included in Mr Mahon’s action as they were not part of the settlement agreement, and they make seek orders seeking to have all but the first two defendants removed from the proceedings.
The matter will return before the courts later this month.
