Litigation Update: Challenges & Changes To Enforcement Actions & Asset Management

The Court of Appeal commenced its operations on 5 November 2014.

The reason for the establishment of the Court of Appeal was the huge backlog which had built up in the Supreme Court, where it could take up to four and a half years for a case to be heard.

Mr. Justice Sean Ryan is President of the Court which is comprised of nine judges in addition to the President. Six of these nine positions were filled by previous High Court Judges such as Mr. Justice Kelly, Ms. Justice Finlay Geoghegan and Mr. Justice Peart.

In broad terms, the Court of Appeal is now the default court for all appeals from decisions of the High Court and its decision will be final, save in certain limited circumstances.

It is possible to bypass the Court of Appeal and appeal a decision of the High Court directly to the Supreme Court. However, leave must be sought from the Supreme Court to do so.

Decisions of the Court of Appeal will, in the main, be final. However, the Supreme Court can grant leave to bring a further appeal if it deems it necessary.

There are two types of appeals which will be dealt with by the Court of Appeal - expedited and ordinary appeals.

A number of existing Supreme Court appeals were identified as being suitable for transfer to the Court of Appeal such that, on day one of its operation, it already had a significant body of work to get through.

O'Flynn Group v Carbon Finance Limited

The corporate loans of the O'Flynn Group as well as certain personal loans of Cork developers, John O'Flynn and Michael O'Flynn were acquired by NAMA and subsequently sold to Carbon Finance Limited ("Carbon").

On 29 July 2014, Carbon made demands of John O'Flynn and Michael O'Flynn under their personal facilities. Three hours later, receivers were appointed over personal assets including shares in a company called Colebridge.

The receivership appointment was then treated as an event of default under the Group's corporate facilities through cross default provisions. Demand letters were issued to four companies within the Group that afternoon.

On the same day, an examinership petition was presented to the High Court by Carbon in respect of these companies. An order was made appointing an interim examiner.

The O'Flynn companies and John and Micheal O'Flynn brought an application (i) to discharge the interim examiner and (ii) discharge the receivers appointed over the personal assets.

The basis for the application was:

(i) Material non-disclosure of key facts by Carbon;

(ii)...