A pedigree breeder based in Cork has been awarded an interlocutory injunction in the High Court to stop the sale of a part of his 113ac family farm.

Justice Siobhán Stack found that the injunction the farm in Bohernascrub, Buttevant, Co Cork, valued at approximately €2m, should be extended while the legal dispute is ongoing.

The lands are a non-residential farm acquired by the first plaintiff Liam Philpott from his father in 1987, which he became registered as full owner with absolute title on 4 February 1991.

As part of the transfer, Philpott agreed to take out a loan to cover his father’s outstanding borrowings and for that purpose arranged in 1990 to borrow £55,000 from Irish Nationwide Building Society (INBS).

The loan was an interest-only term loan for 20 years supported by an endowment insurance policy and secured on the farmlands by way of a first legal charge.

Loans

Around four years later, Philpott borrowed the sum of £6,000 by way an additional interest-only loan from INBS for a term of 16 years to coincide with the term of the 1990 loan.

This charge appears to have been transferred to Irish Bank Resolution Corporation (IBRC) and was subsequently sold by the special liquidator of IBRC to Shoreline Residential Ltd.

Shoreline were registered as owner of this charge on 30 June 2014 and sold it to the first defendant Pepper Finance Corporation, which it became owner of on 25 July 2019.

It appeared that there was only ever one charge and that the terms of the 1994 loan seemed to show that it was intended that that additional loan would be secured by the pre-existing charge, a second charge was registered in favour of INBS on 28 June 1994.

This was subsequently transferred to Shoreline on 30 June 2014, but that charge has been cancelled from the register and not in any way replaced.

“It is not clear what the second charge was, how it came to be registered or why it was cancelled,” said Justice Stack.

“The documents associated with the dealing numbers shown on the folio for these transactions, if still available, would no doubt shed light on that, but it does not at this stage affect the legal issues between the parties and it may be of no relevance whatsoever.”

Letter

On 20 March 2024, Pepper sent a letter of demand to Philpott claiming arrears of €27,695.01, comprising arrears of €15,840.47 and interest of €11,854.54.

However, in August 2012, the plaintiffs received a letter from the IBRC stating that the loan had expired and “all monies owed to the society have now been paid”. Counsel for Pepper argued that this letter was not enforceable.

Philpott argued, along with his wife Anne Pounds, that this shows that no money is owed to Pepper and even if a debt does exist, it would be outside the statute of limitations.

Justice Stack ruled to grant an injunction in the case as a “serious question to be tried” was shown.

“Damages would not be an adequate remedy to compensate the plaintiffs for the loss of part of their family farm should it turn out that in fact Pepper is not owed any money by the first plaintiff and that, consequently, the second defendant [Colin Gaynor] ought not to have been appointed as receiver over the lands.

“In contrast, should it turn out that the plaintiffs are wrong in their contentions, they have very considerable assets which will be available to the defendants to recover all additional sums due and owing which may accrue between now and the conclusion of any trial.”