High Court dismisses stay application against judgment costs due to lack of substantial grounds for appeal.

THE HIGH COURT

[2026] IEHC 169

[Record No. 2025/3284P]

BETWEEN

SAN LEON ENERGY PLC

PLAINTIFF

AND

BRIGHTWATERS ENERGY LTD

DEFENDANT

JUDGMENT of Mr Justice Liam Kennedy delivered on 19 March 2026.

1. On 11 June 2025, the plaintiff secured an ex parte order restraining the defendant from presenting a winding up petition in respect of it. The interim relief was extended until an inter partes hearing in December 2025. My 13 January 2026 judgment (“the Judgment”) dismissed the application for an interlocutory injunction to the same effect. This ruling primarily concerns the plaintiff’s application for a stay on the Judgment1. In short, the plaintiff did not satisfy me that it met the criteria for a stay.

Although a stay is generally framed in negative terms, preventing the implementation of a judgment or order, the plaintiff sought positive orders pending the first return date of its anticipated appeal, effectively maintaining the ex parte reliefs, notwithstanding the Judgment’s finding that it was not entitled to interlocutory relief in such terms. See para. 9 below.

The Judgment

2. The Judgment provides the context for the stay application. In brief, the test was whether the plaintiff disputed the liability in good faith and on substantial grounds (Re Pageboy Couriers Ltd [1983] ILRM 510). The Judgment answered that question in the negative, but also rejected the application based on unchallenged evidence of the plaintiff’s insolvency and its default in complying with its statutory duty to file annual returns and financial statements. The Judgment noted uncontroversial principles governing the circumstances in which Irish Courts may restrain such petitions. The Court may do so if the debt is bona fide and disputed on substantial grounds, but the discretion must be exercised with “great caution” (Truck & Machinery Sales Ltd v Marubeni Komatsu Ltd [1996] 1 IR 12 (“Komatsu”)). The constitutional right of access to the courts may only be inhibited in exceptional circumstances. However, a petition may be restrained if the company establishes prima facie that it disputes all liability in respect of the debt in good faith and on substantial grounds (because a winding-up petition is not a legitimate means of enforcing payment of a genuinely disputed debt). Furthermore, even where the company appeared insolvent, the court might restrain the presentation of a petition if it is not being presented in good faith; but the Court must have particular regard to the creditors’ interests (Kinsela v Russell Kinsela Property Ltd 1986 4 NSWLR 722) and the jurisdiction to restrain such petitions should only be exercised with caution. Since such applications involve the restraint of access to the courts, the normal interlocutory injunction threshold (a fair question to be tried) does not suffice; the plaintiff must establish at least a prima facie case2.

3. The primary finding (that the plaintiff had not established a prima facie case that the debt was disputed in good faith and on substantial grounds) was based on its failure to Truck and Machinery Sales Ltd v Marubeni Komatsu Ltd [1996] 1 IR 12 in which Keane J cited Bryanston Finance Ltd v De Vries (No 2) [1976] 1 Ch 63. Meridian Communications Ltd v Eircell Ltd [2001] IESC 42.

honour a contractual commitment to pay the defendant US$16,652,608 within four business days of 5 October 2023. The threatened petition would have been grounded on that omission. The plaintiff’s defence was that its commitment was conditional on its independently securing funding pursuant to a contemporaneous and separate agreement with another party. It had secured such funding prior to entering into the agreement with the defendant, but the funder reneged (according to the plaintiff). However, no conditionality was provided for in the agreement between the parties to these proceedings. The plaintiff was a sophisticated corporation, and it did not establish a prima facie basis to interpret the contract as only imposing a conditional payment obligation. Whether considered from an Irish or Nigerian3 law perspective, the answer appeared unequivocal. The commitment was not expressed as conditional nor did the plaintiff establish prima facie grounds to read conditionality into its contractual obligation, to imply a conditionality term or to conclude that the absence of such a term would result in absurdity. Accordingly, the Judgment concluded that the plaintiff unconditionally committed to paying the defendant US$16,652,608 but it had not done so. It had not advanced prima facie evidence that the debt was disputed in good faith and on substantial grounds since mere assertion, or ex post facto evidence (which would not be admissible in any event) would not suffice. The plaintiff had not established, even on a prima facie basis, that the petition would be an abuse of process.

4. The Judgment noted that the application would have been rejected on another ground in any event. The replying affidavit challenged the plaintiff's solvency, exhibiting the plaintiff’s own public statements which, it submitted, confirmed its insolvency. Furthermore, it had failed to file annual returns and financial statements in accordance with its statutory obligations for the years ending:

The contract was governed by Nigerian law.

31 December 2022

31 December 2023

31 December 2024

In addition, the plaintiff’s London Stock Exchange (AIM) listing had been suspended. The defendant also submitted that the plaintiff’s directors might be in breach of their statutory obligations by allowing the plaintiff to continue to trade when it could not pay its debts when they fell due. The plaintiff’s affidavits did not engage with such issues. Its chief executive officer’s affidavits did not aver that the plaintiff was solvent or explain the noncompliance with obligations placed on the plaintiff and its directors by the Companies Act 2014. It simply submitted, citing section 570 of the Companies Act 2014, that the defendant had no standing to raise the solvency issue as it could not be regarded as a creditor until the conditionality issue is resolved. However, the Judgment noted that, even leaving aside the contractual issue, the Court may direct a company’s winding up if satisfied that it is insolvent. The defendant had advanced unrefuted prima facie evidence, which was consistent with the plaintiff’s own public statements, its ongoing default in meeting its statutory filing obligations, the suspension of its listing and the lack of any adequate explanation for its omissions. The Judgment did not accept the submission that the Court should ignore such issues until the plaintiff’s objection to the defendant’s standing had been resolved (which would have required the completion of an arbitral process if the existence of a bona fide dispute on substantial grounds had been established). Such a course would ignore the public interest in upholding the Companies Acts and protecting creditors. In the absence of any explanation from the plaintiff, the Court was entitled to draw inferences arising from the failure to file financial statements and annual returns as required by law. The plaintiff had not filed statutory accounts or returns for three years and was evidently in a parlous financial position. This was relevant to the Court’s discretion irrespective of the standing issue. Since the plaintiff and its CEO had not sought to refute the defendant’s evidence as to solvency, that issue, coupled with the failure to file returns and accounts as required by law, would still have led me to refuse the relief sought (even if prima facie evidence suggested a genuinely dispute on substantial grounds).

5. The Judgment also noted that the Supreme Court had emphasised that courts should be slow to deprive petitioners of the right to exercise their statutory entitlement to bring a petition before them. The Court was not satisfied that it should take such a step based on the evidence. It noted that the plaintiff’s position was protected because it could defend any petition on any factual and legal basis it may wish to assert, including but not limited to the evidence and submissions on this application.

The Stay Application

6. The plaintiff’s 23 January 2026 written submissions requested a stay and a brief oral hearing. The defendant filed replying submissions on 3 February 2026. No additional affidavit evidence was exchanged, and the hearing was held on 17 February 2026.

Legal Principles

7. The uncontroversial principles which generally govern stay applications in most contexts are helpfully summarised by Delany and Mc Grath on Civil Procedure (5th Ed., 2023) (“Delany”) at paras 23 – 183 to 23 - 201. In brief, the authorities4 confirm that the first question is assessing (without trying the appeal) whether there is a bona fide, arguable, basis for the appeal, following which the balance of justice will be the overriding consideration. That involves weighing the conflicting interests including the right to appeal, the entitlement to the benefit of the judgement, the desirability to Such as, in particular, Redmond v Ireland [1992] 2 IR 362, Star Elm Frames Ltd v Fitzpatrick [2018] IECA 103, [2018] 4 JIC 1905 (Unreported, Court of Appeal, Peart J (Irvine and Gilligan JJ. Concurring) 19th April 2018), Irish Press plc v Ingersoll Irish Publications Ltd (No. 2) [1994] 1 IR 2018, Danske Bank v McFadden [2010] IEHC 119, CC v Minister for Justice and Equality [2016] IESC 48.

preserve the status quo as far as possible so that the outcome will be meaningful if the appeal succeeds while also considering the consequences if it fails.

8. Mulcahy J summarised the principles in RM v SHC [2023] IEHC 424 at para. 31: “it is necessary for the applicant to establish that he or she has arguable grounds for an appeal and that the balance of convenience lies in favour of granting the stay.”

9. Many authorities on stay applications concern attempts to prevent positive judgments or orders (including orders granting interlocutory injunctions) taking effect pending the determination of an appeal. This application concerns the converse scenario - the Court is asked to grant an injunction to facilitate an appeal notwithstanding the dismissal of the substantive application for identical relief. Accordingly, the relief sought might be more accurately characterised as a further application for interlocutory relief (albeit on a limited basis to facilitate the appeal). However, the plaintiff cited Harding v Cork County Council [2007] IEHC 31, [2008] IESC 27, cited by Delany at paras 25-36, as authority for the proposition that the High Court can implement an appropriate form of injunctive relief pending the determination of an appeal, so as not to render the appeal nugatory if successful. Accordingly, I am proceeding on the basis that I do have such a jurisdiction, subject to the application of the principles outlined below. That said, it may appear counterintuitive that, having determined that the plaintiff was not entitled to an interlocutory injunction, I should now entertain an application which, although characterised as a stay, essentially still seeks to restrain the presentation of the petition pending the first directions hearing before the Court of Appeal. To borrow and adapt the remarks of Mulcahy J in RM, where a court has already refused an interlocutory injunction, an application with a view to maintaining in effect relief refused by the Court, will face hurdles. However, there is a need to vindicate the right of appeal where parties have demonstrated bona fide and substantial grounds of appeal.

10. Two Court of Appeal decisions concern attempts to stay actual winding up orders pending appeals (as opposed to the presentation of a petition as in this case). In both cases the High Court granted a short stay conditional upon the company serving a notice of appeal, which would continue until the first Court of Appeal directions hearing. The plaintiff submitted that this was appropriate in this case. When the application was made to the Court of Appeal in Lobar Limited v. Gladney [2018] IECA 129 (“Lobar”), after dealing with a mootness issue which does not arise here, the Court of Appeal refused to extend the stay to facilitate an appeal. Irvine J (as she then was) noted that the High Court stay application was supported by an affidavit sworn by the company’s solicitor, noting the lack of evidence from the relevant company director. The replying affidavit emphasised, inter alia, that the debt remained due and the insolvency was undisputed. The Court concluded that as matters stood the directors would be obliged to wind up the company even if the appeal succeeded and expressed concern that the interests of the petitioner and other bona fide creditors could be prejudiced if the stay was granted as the company intended to continue trading whilst insolvent without checks, balances or supervision. Irvine J noted the risk of the company incurring further debt and reducing its assets to the creditors’ detriment and expressed doubt as to the appeal’s bona fides, which, she believed, was motivated by delay in the hope that the company might trade out of its difficulties pending the appeal hearing. She expressed concern that, although the company was insolvent, no assurance had been given to the court that company funds would not be used to fund the appeal. She summarised the undisputed principles: “15. The aforementioned authorities make clear that the court is bound to engage in what is often described as a two-stage test. First, the applicant must demonstrate that they have an arguable ground of appeal and is one which is bona fide rather than tactical.

16. If the court is not satisfied that the appellant has demonstrated an arguable ground of appeal, that is the end of the stay application. Assuming, however, the appellant demonstrates a bona fide and arguable ground of appeal, then the court must consider where the balance of justice is to be found. As is stated in many of the more recent authorities, a stay brings with it potential detriment to both sides. Thus, it is necessary for the court to consider where the greatest risk of injustice may arise. It must consider the likely effect that granting a stay would have on the respondent should the appeal fail, and must also consider the effect that refusing a stay may have on the appellant should it succeed on its appeal. In this context, the court may impose a stay in terms which can ameliorate the potential detriment of granting or refusing a stay”.

11. Irvine J summarised her reasons for refusing the stay at paras 26 to 32: “26. In my view the first matter material to the court's consideration is the fact that Mr. Maguire seeks to maintain this application in the name of the company for the purpose of permitting what is clearly an insolvent company to trade for an additional period of time. It is clear that if the stay is not granted, not only will the company continue to carry out the two building projects identified in Mr. Quinn's affidavit, but it will seek to enter into contractual arrangements concerning five other projects for which it has been asked to tender.

27. Secondly, it is important to recognise just what the court is being asked to do on the present application. It is being asked to set aside the appointment of the liquidator, because the stay application was not brought prior to the expiration of the stay granted by the High Court, and to do so at a time when, by reason of its financial circumstances, the directors are themselves under a duty to wind up the company. It is clear that the company is not in a position to pay its debts as they fall due, yet it is proposed that the court should permit it to continue to trade and grant a stay on the liquidation on the terms set out in Mr Quinn's letter to the Revenue's solicitors. For the court to take such an approach would be to ignore the statutory regime that applies when companies are insolvent.

28. As to whether or not the company has an arguable ground of appeal, I have to say that I consider the points raised in the notice of appeal no more than barely sufficient to pass the arguability threshold. However, I would not go so far as to conclude on this interlocutory application that as a matter of law, all of the grounds of appeal are unstateable. What can be said of them is that they would appear to be pursued for tactical advantage in the sense described in Danske Bank v. McFadden, and on legal analysis to be somewhat novel. However, given that they are at least prima facie capable of being argued, I intend to move directly to consider where the balance of justice is to be found in this case.

29. In my view, the balance of justice clearly warrants the refusal of the stay application. The first significant factor that weighs in that balance is the fact that the company is clearly insolvent and as matters stand, the company cannot pay its debts as they fall due. It is not in a position to discharge the petitioner's liabilities. That fact is not disputed.

30. Another factor that weighs in the balance is that if the court [grants]5 the stay, it is permitting a company which it knows to be insolvent to continue to trade in an unsupervised fashion, and in so doing risks a grave injustice being perpetrated upon the general body of creditors. I do not think it would be appropriate for this Court to allow a company to trade when it is insolvent on the basis that they will continue, inter alia, to [fail to]6 discharge all tax liabilities as they fall due. The court has to be mindful of the risk of allowing this company engage with those projects referred to in Mr. Quinn's affidavit when it cannot meet its agreed liabilities to the Revenue Commissioners. It is also material that the stay which the company seeks is one which would likely last for a period of a year during which irreparable damage night be caused.

31. Finally, the court is also satisfied that the liquidation would be gravely prejudiced if the stay were to be granted and the appellant were to lose its appeal, insofar as the liquidation would date back to the date of the presentation of the petition, thus significantly increasing the complexity and costs of the liquidation to the potential prejudice of creditors.

32. For all of the aforementioned reasons, I would refuse the stay”.

12. Costello J (as she then was) applied the Lobar principles in her ex tempore judgment in Kilcurrane Business Centre Ltd v Hendrik Willem Offreins (Unreported, Court of The judgment uses the word “refuses” but clearly that was not the intention of the passage. The words “fails to” appear to have been omitted from the ex-tempore note.

Appeal, Costello J., 30 March 2022) (“Kilcurrane”). The High Court had ordered that a company be wound up but stayed execution in the event of an appeal until the first Court of Appeal return date. When the company invited the Court of Appeal to extend the stay pending the appeal hearing, Costello J declined to do so, applying the first stage of Lobar’s two stage test and affirming the High Court’s conclusion that the defence of the petition and of the appeal was not bona fide because the positions and defences advanced were unstatable. Accordingly, the need to assess the balance of justice did not arise. In the High Court, Butler J. had accepted that the dispute reached the threshold of providing a defence to the petition on substantial grounds but was unable to conclude that the company’s defences were advanced in good faith. Costello J agreed, observing at paras 20 -21 that the company’s accounting treatment of controversial issues was “disquieting and the feeling of unease is greatly exacerbated by the absence of any explanation for either the treatment of the transactions or for the failure to communicate with the petitioner in relation to the transactions prior to the presentation of the fait accompli in the 2019 accounts.

21.All of these actions of the company, largely in response to the petitioner's claim for repayment of a loan which had at all times up to then been acknowledged in the accounts of the company, lead to the conclusion, to my mind, that the dispute in relation to the debt is not bona fide. ... If there is no bona fide dispute as to the debt - and the quantum of the debt was not in dispute … I can only conclude that the appeal is tactical and not bona fide”.

13. Costello J noted, citing Clarke J. (as he then was) in CC v. Minister for Justice and Equality [2016] 2 IR 680, the Court must decide what to do until the result becomes clear and the overall principle is to identify a regime which runs the least risk of injustice but that that need for a balancing exercise only arose once the appellant had demonstrated a bona fide and arguable ground of appeal. The company had not done so, and the stay was refused.

The Written Submissions

14. The plaintiff’s written submissions requested a stay as it wished to exercise its right of appeal. Otherwise, the defendant could issue a petition forthwith, rendering any appeal moot and depriving the plaintiff of its right of appeal. They contended that the consequences of a petition would be extremely serious for the plaintiff because section 581(1) of the Companies Act 2014 calculates that the date of the commencement of a winding up by reference to the date of the presentation of the petition. The plaintiff’s ability to continue to trade would be hampered by the potential application of the doctrine of relation back, even if it ultimately succeeded in resisting the petition.

15. The defendant’s written submissions stated that: a. The plaintiff initially secured an ex parte injunction on 11 June 2025 restraining the defendant from filing a winding up petition until 16 June 2025. Despite the defendant seeking an early hearing, the application was heard in December 2025. The Judgment refused the application for an interlocutory injunction on

13 January 2026. Accordingly, the plaintiff had benefitted from ex parte orders for more than six months (with no protection for the defendants in terms of a meaningful cross-undertaking). The plaintiff now sought a stay on the refusal of interlocutory relief, which was not, in substance, a stay. Such an order would, in effect, continue to restrain the defendant from filing a petition: the very relief which the Judgment refused. b. It was not a typical interlocutory injunction where the Court considers whether the plaintiff has raised a fair question to be tried and then assesses the balance of justice.

The plaintiff sought to limit access to the Courts. Therefore, the Court applied a different test, whether there was a bona fide dispute between the parties, concluding that it was not satisfied that there was such a dispute. Given that finding, it was hard to see why relief should be continued. A stay would continue the interference with the defendant’s access to the Court, prolonging the infringement of a basic entitlement of creditors of Irish companies. c. Furthermore, as the Judgment noted, the plaintiff had not responded to cogent evidence as to its insolvency and its failure to file annual returns.

No stay should be granted given the plaintiff’s apparent insolvency and its failure to file returns. d. As the Judgment noted, the plaintiff remained free to oppose a petition, regardless of the Judgment. e. Furthermore, delaying the date of presentation of a petition, would delay the date on which the winding-up was deemed to commence (should it eventually be granted). This could prejudice the defendant and/or other creditors. Subsequent transactions would be void unless sanctioned by the Court, but a stay could prevent prior transactions at an undervalue or preferences from being within the scope of a liquidator’s review.

This was a concern since the plaintiff had not filed annual accounts or produced financial information. f. The risk of harm to the defendant was not mitigated by a cross-undertaking in damages, such an undertaking being the normal means of protecting a party subject to an interlocutory injunction from irreversible prejudice. Any undertaking from the plaintiff must be assumed to be worthless as it does not contest the evidence of its insolvency. g. Many judgments on applications for a stay on interlocutory injunctions involve appeals from judgments granting such interlocutory injunctions rather than refusing them as in this instance.

It is incumbent on a party seeking such a stay to set out arguable grounds of appeal and to engage with issues like the balance of convenience (and the defendant cited RM). The plaintiff’s written submissions had failed to engage with that test – they did not set out arguable grounds of appeal or indeed any grounds of appeal. Further, its submissions failed to address issues relating to the prejudice caused by the injunction.

Oral Submissions

16. At the hearing, in addition to points in written submissions, the plaintiff submitted that: a. Although a notice of appeal had not yet been drafted, there were arguable grounds of appeal. It would be submitting that the Judgment, while articulating the correct test, sought to determine the merits of the plaintiff’s defence to the contractual claim, whereas its role was confined to the threshold test - determining whether the plaintiff had adduced prima facie evidence of a bona fide and substantial dispute. b. The stay was sought for a short time and was required to vindicate the right to appeal and to avoid the enormous prejudice which would flow from the filing of the petition. The balance of justice favoured a stay for a short time as that would involve the least risk to either party. c. The damage would be done once petition presented, irrespective of the outcome of any appeal.

17. In addition to points raised in its written submissions, the defendant’s counsel submitted in response to the plaintiff’s initial oral submissions that: a. The application effectively sought the extension of the ex parte order, notwithstanding the dismissal of the application and the determination that there was no bona fide and substantial dispute. b. It was not a routine injunction application but an application to restrain a petition, limiting creditors’ statutory rights and the right of access to the courts.

c. The Court had made express findings as to the prima facie evidence of the plaintiff’s insolvency and as to its failure to file statutory accounts. Explanations affidavits and submissions might have been expected in response to those findings and in support of the stay application, but they had not been forthcoming. The plaintiff remained coy about its financial circumstances and its default of filing obligations. If it was looking for an extension of the ex parte order it was incumbent on it to file such evidence. d. The plaintiff referred to the consequences of the granting or refusal of a stay, but a stay would impact all creditors, and the defendant cited para. 60 of the Judgement which noted public interest factors, including directors’ statutory duties and responsibilities and the public interest in upholding the Companies Acts and protecting creditors. e. The plaintiff’s undertaking was of limited worth. A personal undertaking from the CEO or fortified undertaking from the company might have been expected but neither had been forthcoming. f. The plaintiff’s written submissions had not engaged with the grounds required to justify the application. There had been no identification of possible grounds of appeal until the oral submissions.

18. In reply to the defendant’s oral submissions, the plaintiff’s counsel submitted that: a. if it was to seek a continuance of the stay from the Court of Appeal it would need in due course to address all grounds of appeal and to address the matters raised by the defendant’s counsel. b. As appeared from the Court of Appeal judgments in Lobar and Kilcurrane and from decisions such as Charles v Minister for Justice [2016] 1 JIC 2005 and Okunade v Minister for Justice [2013] 1 ILRM 1, if the Court was satisfied that the plaintiff had established an arguable ground for appeal, it should apply the “greatest risk of injustice” test. c. As regards the threshold test, while Danske Bank v. McFadden [2010] IEHC

119 distinguished between bona fide and tactical appeals, the appeal was clearly bona fide because “the very existence of the company itself” was at issue. Although the defendant emphasises the finding that there was no bona fide dispute, that was the finding which the plaintiff was appealing. d. CC suggests that the Court must minimise the risk of injustice until the issue is determined. Likewise, in a different context in RM, Mulcahy J noted the desirability of preserving the status quo, concluding that the defendant would not be prejudiced by a stay whereas its refusal would render the appeal moot (and the plaintiff submitted that preserving the status quo in this case would require restraining the petition). e. Although in Re Kilcurrane Business Centre Ltd [2021] IEHC 701, Butler J ordered the company to be wound up, she granted a stay for 28 days to enable the company to exercise its constitutional right to appeal.

That course should also be followed here to allow the Court of Appeal to deal with the matter. The plaintiff sought a 28 day stay to that end. f. As Lobar confirmed, the balance of justice required the Court to consider potential detriment to both sides. Here the greatest risk was to the plaintiff and the factors favouring it included the need to vindicate its constitutional right of appeal, the severe consequences of the presentation of the petition, the implications (in the event of the petition ultimately succeeding) of the winding up being deemed to have commenced on a particular date and the limited nature of the stay sought.

The defendant’s concerns about delay must be weighed against the need to preserve the right of appeal. g. The plaintiff accepted that evidence of insolvency was material but submitted that solvency was secondary to there being a debt. h. The plaintiff’s CEO was prepared to give a personal undertaking, but it was not being offered to the Court, because the plaintiff appreciated that such a fortified undertaking would demand an assessment of its worth and the plaintiff did not consider that offering such a personal undertaking would be fruitful.

Accordingly, while the CEO was prepared to be joined as a co-plaintiff and to give an undertaking, the plaintiff did not propose that course. i. In response to the Court’s reference to Okunade, the plaintiff considered that that decision was in the context of judicial review, a different area of the law. Kilcurrane and Lobar were the leading authorities here. In any event, it argued that “Okunade” factors were encapsulated by Lobar.

19. In response to the plaintiff’s further submissions, the defendant submitted that the test outlined in paras 11 and 12 of Lobar and applied in Kilcurrane, supported the

conclusion that the stay should be refused (as in both decisions). Lobar confirms the need for evidence to subtend the application. At paras 5 and 6 of its judgment, Irvine J criticised the absence of evidence from the plaintiff, including as to solvency. Similarly in these proceedings a month elapsed after the Judgment with no evidence from the plaintiff on that issue. The defendant’s written submissions had again highlighted the issue with no response or evidence from the plaintiff. Furthermore, as appears from para. 12 of Lobar, the Court should have regard to the risk not only to the defendant but also to other creditors if a clearly insolvent company is permitted to continue trading, particularly in the absence of a meaningful undertaking as to damages. It had not been asserted that the plaintiff would be engaging in activity other than raising finance but how it was doing so was a significant issue. A stay would allow the company to continue to operate unimpeded. Irvine J (as she then was) applied a two-stage test at paras 26 and 27 of her judgment in Lobar, observing that the stay sought to permit an insolvent company to trade, contrary to the statutory regime. The defendant agreed that the Okundade criteria were relevant in that context in terms of the orderly operation of the statutory regime. The balance of justice favoured the defendant, particularly in circumstances of uncontradicted insolvency and the plaintiff’s failure to deliver even a short affidavit in support of the stay asserting solvency was telling.

Analysis

Preliminary Observations

20. The line of least resistance for any court of first instance might be to readily grant applications for stays pending appeals, leaving the appellate court to consider the issue at the first return date (if the appeal proceeds). Such a course may reduce effort and expense for the parties and conserve judicial time and court resources (in the High Court at least), potentially avoiding two hearings on the same issue and in circumstances in which the Court of Appeal’s assessment will be informed by an actual Notice of Appeal. However, O. 86, r.7 RSC requires that such application be made to the High Court in the first instance. Accordingly, I should assess and apply the relevant criteria.

21. As a second preliminary observation, I note that, as a matter of logic, the Supreme Court’s observations in Komatsu and other authorities as to the approach to applications to restrain the presentation of winding up petitions should also inform applications to stay such actions pending appeals. In CC, Clarke J suggested that the test for a stay pending an appeal should be the same as applied pending trial and that it would be illogical to proceed on any other basis. Since in this case, the Komatsu standard would apply at the first instance, it follows in the light of CC that it is also the standard to be applied to a corresponding application pending appeal. I was not referred to specific authority on this point. It may not have arisen in Lobar or Kilcurrane, perhaps because both cases concerned attempts to restrain a winding up order, rather than the issuing of a petition as in this instance. However, in the absence of authority on that point, that factor can also be addressed in the balance of justice assessment (although conceptually it appears more relevant to the threshold test).

22. A third preliminary observation, which is particularly relevant to any balance of justice assessment, is that applications to restrain the presentation of winding up petitions will typically complain that the presentation of a petition can be deleterious in reputational terms, creating doubt about solvency and jeopardising a Company’s survival, irrespective of the outcome of the proceedings. I am sceptical in this case. The plaintiff’s travails are well documented. There has been extensive publicity about its financial plight, including in its own public releases.

Furthermore, it has failed to file annual returns or financial statements for three years and has been delisted from AIM. The Judgment also attracted publicity. Any potential funder, investor or creditor would assess the plaintiff’s financial difficulties, including litigation in which it is embroiled (including these proceedings) and its need to secure significant corporate funding to extricate it from its current predicament. It was clear from the original application that such funding was not directed solely to the debt alleged by the defendant but concerned a wider refinancing for the plaintiff and associated companies with a view to completing the key project which led to this litigation, thus maximising its worth.

The evidence does not suggest that the lodging of a petition would fatally undermine the plaintiff's ability to secure finance. Any party embarking on the envisaged multi-million dollar funding deal with the plaintiff (and finance as such a level was apparently required to replace the TRAM commitment) would undertake due diligence and require detailed financial disclosures from the plaintiff which would inevitably reveal: (i) its current financial predicament; (ii) the issues about its solvency; (iii) its failure to file annual returns and financial statements for three years; (iv) its AIM delisting; and (v) the terms of the Judgment, including as to its insolvency.

Whether the funder or investor was deterred would presumably depend on the potential value of the plaintiff’s assets, projects, options and business. However, if such funding was forthcoming, then, even on the plaintiff’s own case, the debt would immediately become unconditional. Accordingly, if any corporate funding was to be proffered to replace that which was to have been provided by TRAM then it would need to address the plaintiff’s liabilities, including the monies claimed by the defendant (thus neutralising the risk of a petition) and the payments required to complete the plaintiff’s current projects and to exploit its assets and options.

It follows that any funder who was willing to proceed with a meaningful financing or investment package would need to ensure that it resolved the plaintiff’s legal and financial difficulties, including the issues between the parties to these proceedings. Accordingly, it is difficult to see why the filing of a pending petition would deter a new funder since the winding up proceedings would presumably become moot if finance was forthcoming. Indeed, the plaintiff’s own evidence confirmed that such winding up petitions in respect of two associated companies (Eli and Eroton) did not deter TRAM from offering the original financing package (since the financing was intended, inter alia, to ensure the discharge of those company’s debts, the abandonment of the winding up proceedings and the resumption of construction).

The plaintiff’s fear that the issuing of a petition would kill its chances of securing funding is inconsistent with its own evidence and the economic logic of such a refinancing.

23. The final preliminary observation is that I have been given no reason to anticipate that funding is more likely to eventuate on this occasion than on previous occasions on which the defendant was prevailed upon to proffer periods of grace to facilitate the plaintiff’s attempts to secure funding. As appears from the Judgment, notwithstanding the plaintiff’s assurances, its optimism was never vindicated and there is no reason to expect a better outcome on this occasion. However, it is hard to see why a pending petition would affect the analysis either way for the reasons set out above. Any counterparty would assess the financial pressures on the plaintiff, including the liability giving rise to these proceedings and the investment or finance would be designed to provide funding at a level required to ensure the plaintiff’s viability, resolving this and other issues facing the plaintiff and enabling it to complete the projects in which it is engaged. It is not obvious that pending winding up proceedings would be a concern since they would be presumably resolved once funding came through. That, after all, was the commitment if the TRAM funding had eventuated as promised. Accordingly, I doubt that the plaintiff would be prejudiced by the presentation of a petition as opposed to its ultimate determination, a determination which should follow the hearing of the appeal if the plaintiff proceeds with expedition and secures the earliest possible hearing date for the appeal.

24. The final preliminary observation is that there was no evidence before me to suggest that funding was any more likely to eventuate on this occasion than the other occasions on which the defendant was prevailed upon to proffer extended periods of grace to facilitate the plaintiff’s attempts to secure such funding. As appears from the Judgment, notwithstanding the plaintiff’s repeated assurances, its optimism never proved well founded and there is no particular reason to expect a better outcome on this occasion. However, it is hard to see why a pending petition would affect the analysis either way for the reasons set out above. Any outside funder or investor would need to assess the financial pressures on the plaintiff, including the liability giving rise to these proceedings and the investment or finance would be designed to provide funding at a level required to ensure the plaintiff’s viability, resolving this and other issues facing the plaintiff and enabling it to complete the projects in which it is engaged. It is not obvious that pending winding up proceedings would be a concern since they would be presumably resolved by the plaintiff once funding came through. That, after all, was the intention if the TRAM funding had eventuated as promised. Accordingly, I am not convinced that the plaintiff would be exposed to additional prejudice from the presentation of a petition as opposed to its ultimate determination, a determination which should follow the hearing of the appeal if the plaintiff proceeds with expedition and secures the earliest possible hearing date for the appeal. The first stage - Is there an arguable bona fide basis for the appeal?

25. In Redmond v Ireland [1992] 2 IR 362, McCarthy J warned against bringing appeals "not as bona fide appeals with any legitimate chance of success, but as a bargaining weapon”, referencing the heavy responsibility upon the legal advisers of parties seeking a stay of execution to assist the court on “the reality of the appeal”. In Lobar, Irvine J (as she then was) observed that the applicant must demonstrate arguable grounds of appeal which were “bona fides rather than tactical”. Irvine J considered the appeal points barely passed the arguability threshold but was not inclined on an interlocutory application to go so far as to conclude that they were unstatable. However, she made clear that arguability might not suffice, noting that the grounds “would appear to be pursued for tactical advantage in the sense described in Danske Bank v. McFadden”. Notwithstanding such reservations, as the grounds were at least prima facie arguable, she moved to the balance of justice.

26. By contrast, in Kilcurrane, Costello J (as she then was) focussed on whether the appeal was bona fide or tactical, concluding that it was not bona fide. The company’s controversial and inconsistent accounting treatment of the petitioner's claim, led to the conclusion that the dispute was not bona fide and that the appeal was “tactical and not bona fide” so the Court refused the stay without addressing balance of justice factors.

27. At first instance in this case, the issue was whether there was an arguable basis to contend that the obligation was conditional, a construction question. No point was identified which required discovery, oral evidence or cross-examination. The correspondence confirmed that the plaintiff repeatedly sought and received considerable latitude from the defendant following the 4 October 2023 agreement as regards the payment obligation, only raising the conditionality point when, after the defendant’s patience was exhausted, it threatened a petition.

28. It also appeared from the plaintiff’s oral submission that it envisaged furnishing further affidavit evidence and submissions before the Court of Appeal hearing of an application to extend the stay (or to appeal any refusal of a stay) and, of course, the notice of appeal would itself be available at that stage. No indication was volunteered as to the contents of any such additional evidence, so I have not had regard to that suggestion in my deliberations. However, since O.86, r.7 requires the application to be made to the High Court in the first instance, such evidence and submissions should also presumably be tendered at first instance. The only evidence available to me was that tendered for the original application which I re-reviewed for this ruling (without finding reinforcement for the plaintiff’s position on either limb of Lobar).

29. In the absence of a further affidavit on the plaintiff’s behalf (as tendered, by a solicitor at least, in Lobar), I cannot reach a conclusion as to whether the plaintiff has demonstrated arguable grounds of appeal which are bona fide rather than tactical. While the notice of appeal could not be finalised and lodged until the order was perfected, a draft could certainly have been prepared following the Judgment which might have assisted in respect of both limbs of Lobar, reassuring the Court as to the bona fides nature of the appeal and also as to the plaintiff’s commitment to progress it expeditiously. However, although a month elapsed between the Judgement and the stay hearing, the notice had not been drafted. In the course of oral submissions, the plaintiff's counsel outlined the basis for the appeal, namely that “the very existence of the company itself” is at issue. Responding to the requirement to show that the appeal was genuine rather than tactical, plaintiff’s counsel noted the devastating consequences for the company if a petition was presented but that response was a non sequitur. Such a response was directed at tactical rather than substantive considerations. Even if the plaintiff was correct as to the harmful consequences of a petition, that would not mean that there were good grounds for an appeal – it would simply mean that the plaintiff was incentivised to pursue an appeal irrespective of its merits. Adverse consequences will always be asserted by companies opposing the presentation of petitions, but it does not necessarily follow from such fears that are arguable bona fide grounds for an appeal.

30. It would be hard not to sympathise with the plight of parties anxious to avoid winding up petitions. There may be a temptation in such circumstances to assert a dispute to time the company to extricate itself from its predicament, in this case by obtaining external funding. However, such exigencies do not meet the Lobar threshold test, any more than the plaintiff’s hope of trading out of its difficulties sufficed in Kilcurrane. I was not convinced that the plaintiff met the threshold test.

The Second Stage - the Balance of Justice

31. I will consider the second stage notwithstanding my conclusion that the plaintiff failed to meet the first stage. I accept the plaintiff’s submissions that factors favouring a stay include the need to facilitate access to courts and its entitlement to exercise its right of appeal. Once again, its cause was not assisted by the lack of an affidavit explaining the reason for the application and the need for such relief, addressing the solvency issue or confirming the activities the plaintiff would engage in if the stay was granted (and their likely implications for the defendant and other creditors). The plaintiff still hoped to secure replacement funding and if this was to transpire, it would presumably be in all parties’ interests. However, the plaintiff has been seeking such funding since 2023 and, despite its repeated assurances and optimism coupled with a series of false dawns, there appears to be no reason to expect a more positive outcome now.

32. The plaintiff’s balance of justice submissions emphasised the potential harm flowing from the presentation of a petition and the possibility that it would jeopardise an appeal. However, arguably greater concerns proved insufficient to justify stays in Lobar on balance of justice grounds. In Lobar, once the High Court order took effect and the company was wound up, the issue would have (and had in fact) become moot, meaning that there was no reality to reversing that outcome through a successful appeal.

33. It is significant that the plaintiff seeks to stay the presentation of the petition rather than its hearing or the coming into effect of any resulting order. Such a stay would continue to restrict the defendant’s access to the Courts, its entitlement to invoke statutory procedures, and, potentially, the effect of s581(1) if a winding up order is granted. In the circumstances, the implications of a stay on presenting a petition and the consequences for the stayed creditor are arguably even more significant than a stay on a winding up order itself.

34. Conversely, and also weighing against a stay, as the Judgment observed, the plaintiff can still defend a petition on any factual and legal basis it may wish to assert, including the evidence and submissions in the proceedings to date. Allowing for advertising requirements and the exchange of affidavits and submissions, there could be a delay of a number of months before the hearing of the winding up petition in the High Court. However, the factual and legal issues raised by the appeal seem confined and it need not take the plaintiff long to draft a notice of appeal or to lodge books of appeal and submissions (particularly since the plaintiff has already had more than a month to examine the Judgment). It does not appear that much time would be required to prepare the appeal for hearing. Subject to the Court of Appeal’s admittedly busy schedule, if the plaintiff proceeded with expedition and sought an urgent hearing, the appeal could be determined before any petition came on for hearing in the High Court, avoiding the need for a stay while allowing the defendant to continue to exercise its right of access to the Courts and its entitlement to progress a petition (and also ensuring that the effect of s581(1) was not impeded). Accordingly, any consequences for the plaintiff of the refusal of the stay can be mitigated by its unfettered ability to contest the winding up proceedings and by the opportunity to seek the urgent hearing of the appeal in the meantime.

35. Although the plaintiff characterises the status quo as being allowed to continue to trade, with no petition being presented, it is debatable as to whether such a stay would be maintaining the status quo. Normally injunctive relief to preserve the status quo is intended to prevent a breach of a party's rights, such as trespass or some other unlawful act. It is difficult to characterise an attempt to restrain a party exercising a statutory right to bring a petition for the Irish court as maintaining the status quo.

36. When applying Lobar principles, and assuming an arguable case for an appeal, factors weighing in favour of the stay would be the concern to vindicate the right of appeal and to avoid prejudice arising from the presentation of the petition. Factors weighing against a stay at this stage include; (i) the admitted absence of any meaningful undertaking as to damages; (ii) the fact that the defendant’s access to the Court has already been delayed for more than seven months; (iii) the doubts as to whether the true motivation was to prolong the process so as to ensure more time for the plaintiff to secure funding (but I have given the plaintiff the benefit of the doubt on this factor), (iv) the fact that, as appears from the evidence on the underlying application, the plaintiff previously repeatedly sought the defendant's forbearance from progressing winding up proceedings against related companies or enforcing its own payment commitment on the basis of repeated promises of payment, promises which were not never honoured, only raising the conditionality point when the exasperated defendant finally sought to enforce its entitlements; (v) in view of the plaintiff's financial plight, damages would not be an effective remedy for the petitioning creditor if the appeal fails; (vi) the company's evident financial difficulties and solvency concerns about and its failure to respond to those concerns or to satisfactorily explain its failure to file annual returns and statutory financial statements or to confirm the detail of the activities in which the Company would engage if a stay was granted and the extent to which such activities could impact, positively or negatively, on the outturn for the defendant in particular and other creditors. The last factor is particularly important - transparency is required in the context of a company seeking a stay in such circumstances but it is not obvious to me that the plaintiff has engaged with the disclosure of its financial predicament and prospects and the implications for creditors with the detail which would be required to justify such a request.

37. The timing of the plaintiff’s raising the issue appeared to me to be relevant to my substantive determination of the interlocutory application, but it also goes to the balance of justice on the stay application. If such suggestion had been made earlier, it seems unlikely that the defendant would have entertained the plaintiff’s repeated requests for latitude. The defendant acceded to the plaintiff’s pleas for more time on the basis that it was implementing alternative funding arrangements following the default of its original funder, TRAM. The plaintiff only suggested that the payment obligation was purely conditional after the defendant’s patience was exhausted and it delivered a statutory demand for payment as a precursor to the presentation of the petition.

38. Both parties relied upon the consequences of s581(1) as a factor relevant to the granting of a stay. In my view the consideration militates against a stay. The statutory provision protects the public interest and the interests of creditors. The Court must be wary of interventions which could undermine the intended operation of the statutory protection, potentially reducing remedies available to creditors and a future liquidator, particularly when those charged with the company’s governance are already in continuing default of certain statutory duties. In view of the Company’s filing defaults, its delisting and its apparent solvency issues, the fact that, in practice, a stay would, in practical terms, delay such a public interest/creditor protection measure taking effect is a cogent reason to refuse such a stay rather than to grant it. That was the view adopted by Irvine J in similar circumstances in Lobar. She held that delay could significantly increase the complexity and costs of the liquidation to the creditors’ potential prejudice. The same concerns apply here.

39. I agree with plaintiff's counsel that the Lobar test is broad enough to encapsulate the Okunade factors, but I also consider that Okunade is pertinent because an application to restrain a winding up petition arguably raises public law considerations. Several Okunade factors weigh against a stay. These include the need to respect the integrity of the statutory corporate insolvency regime and the protections which it affords not only to both parties to the proceedings but to all the plaintiff’s creditors. Such considerations include what Clarke J (as he was) described in Okunade as “the orderly implementation of measures which are prima facie valid” such as a creditor’s statutory right to bring a winding up petition before the Irish courts. It is important to give appropriate weight to the public interest in the orderly operation of the Companies Acts. The relief sought is not limited to restraining a body’s actions or even secondary legislation – it would restrain rights and the operation of the regime envisaged by primary legislation.

40. The plaintiff’s (and its directors’) non-compliance with the statutory responsibility to file annual returns and financial statements is pertinent. While asking the Court to intervene to prevent a creditor exercising its statutory right, the plaintiff has failed to explain its failure to file annual returns or even to undertake to do so within a defined period. Nor has it responded to the averments with regard to its insolvency. In fact, there is less evidence before the Court on this stay application than the (criticised) evidence in Lobar. The only evidence was from the original application but the original application’s grounding affidavit's treatment of the balance of justice did not advance matters, simply stating that the defendant’s claim was liquidated and therefore could be compensated in damages (ignoring doubts as to the plaintiff’s solvency and as to the value of its undertaking as to damages) and stating that if the defendant issued winding up proceedings the plaintiff would likely lose access to refinancing, prejudicing it and its creditors and the associated companies’ creditors.

41. For completeness, in the context of judicial review stays, Okunade also identified circumstances in which it might be appropriate to have regard to the merits in considering the balance of justice. Although given the public law aspect of these proceedings, Okunade does resonate, it was not necessary for me to consider the merits on this occasion.

42. The conduct of the plaintiff and its directors is also relevant. The Court cannot disregard the unexplained failure to file statutory financial statements or annual returns, suggesting a continuing disregard for obligations imposed by the Oireachtas in the public interest and for the protection of creditors. Both on affidavit and in submissions, the plaintiff maintained a stony silence on such issues save for objecting as to standing.

43. Notably, the plaintiff's balance of justice submissions focussed almost exclusively on consequences of a petition for the plaintiff, dismissing any countervailing prejudice for the defendant. By contrast, the defendant’s submissions also referenced other creditors’ interests. The Court of Appeal decisions in Lobar and Kilcurrane confirm that, in assessing the balance of justice, the Court must consider the public interest and the interests of other creditors. Such factors, including the risk of impacting on the practical ambit of s581(1), weigh against a stay.

44. As the plaintiff submitted, Lobar and many other authorities confirm the grant or refusal of a stay threatens potential detriment to both sides. If the threshold test is met, the court must consider where the greatest risk of injustice may arise. It must consider the likely effect. In Lobar, the plaintiff’s evident intention to continue trading while insolvent (in the hope of trading out of its difficulties) weighed decisively against it in the balance of justice assessment. Irvine J noted that such an approach “would be to ignore the statutory regime that applies when companies are insolvent”. Similar considerations arise here. Irvine J expressed her concern (albeit in the context of a winding up order) that if the court granted a stay, it would be permitting a company which it knew to be insolvent to continue to trade without supervision, risking “a grave injustice being perpetrated upon the general body of creditors”. She did not think it would be appropriate for the Court to allow a company to trade when it was insolvent or on the basis that it would continue, inter alia, to fail to discharge its tax liabilities as they fell due. Furthermore, she anticipated that the stay sought could last for a year “during which irreparable damage night be caused”.

45. I was sceptical as to whether the plaintiff met even the first limb of Lobar but in any event, the balance of justice would not favour the granting of a stay for the reasons outlined above (and, indeed, in the Judgment). So as to enable the plaintiff the opportunity to make an application for a stay to the Court of Appeal, I was nevertheless minded to grant a short stay to enable it to file its appeal and to apply to the Court of Appeal. However, while I was finalising my judgment following the 17 February 2026 stay hearing, the parties reported an important development. In related proceedings the High Court in London gave judgement in favour of the defendant, against one of the plaintiffs’ associated companies, Eroton, directing the latter’s winding up. However, that development prompted immediate negotiations resulting in the agreement of a further payment plan as a result of which, on consent, the English Court stayed its order and the defendant agreed, inter alia, to stay further enforcement against the plaintiff in these proceedings. Accordingly, the plaintiff informed the court that there was no need to proceed with the stay application and it wished to withdraw it.

46. While welcoming the accord, I knew that past payment plans had foundered, so I enquired as to what would happen if that occurred on this occasion. The parties confirmed that in that event the defendant could proceed, including by seeking to present a winding up petition. They anticipated that in the meantime the plaintiff would file an appeal from the Judgement to preserve its position but that the parties would then seek a stay in respect of that appeal pending the implementation of the payment plan which would hopefully resolve all issues to the parties’ mutual satisfaction. If hostilities resumed, then the plaintiff would revive the appeal and would again seek a stay on the Judgment pending the determination of the appeal. The plaintiff envisaged making any such stay application directly to the Court of Appeal. I noted that the Rules of the Superior Courts envisaged such an application being made to the High Court in the first instance and concluded that if the application for the stay could be resurrected the issue was not moot. To obviate the need for a further stay application to the High Court, I determined that the appropriate course was for me to make an order on the stay application (rejecting it) for reasons to follow (and which are reflected in this Judgment, which I had already almost completed in any event). This was intended to ensure that, in addition to appealing the Judgement, the plaintiff could also appeal the stay ruling in that hopefully unlikely scenario. I made the order accordingly, to be followed by this note of my reasons. The terms of the truce negotiated in London obviated the need for a short stay pending any application to the Court of Appeal.

47. I asked where the arrangements left other creditors, noting the need for compliance with statutory obligations. The plaintiff confirmed that its directors were aware of their responsibilities and were taking appropriate advice and actions. I noted that no explanation had been provided for the failure to file annual returns and statutory accounts, and the plaintiff acknowledged the failure to file such returns and accounts. However, I accepted that if the refinancing arrangement was successfully implemented, it would presumably benefit the general body of creditors and lead to the regularisation the position with regard to annual returns and financial statements and, presumably the London listing as well as the litigation strands which were ongoing internationally. In those circumstances, while not condoning any breaches of Irish company law which have occurred or which may be continuing, it seemed from the rudimentary available information that the course proposed by the parties was in the public interest, as well as the interests of the parties.

Interlocutory Injunction Application Costs

48. The plaintiff accepted that the defendant was entitled to the costs of resisting the injunction application but sought a stay on the execution of those costs pending the determination of the anticipated winding up proceedings. The defendant noted the irony of the plaintiff conceding the costs but seeking a stay on enforcement pending the resolution of winding up proceedings which had yet to be initiated and while simultaneously seeking to stay the commencement of those proceedings. Such a stay would render the costs award nugatory as it would only take effect when and if the defendant obtained a winding up order. I agree. There is no basis to restrain an order for costs in these proceedings pending the determination of other actual or anticipated Court or arbitral proceedings. Even if such proceedings are commenced and the plaintiff in these proceedings is successful therein, that would not affect its liability for the costs of the injunction application.

49. The only basis identified for a stay on the costs order was the need to preserve a right of set off if winding up proceedings were ultimately resolved in the plaintiff’s favour. I will address that concern by directing the defendant to provide an undertaking in the terms its counsel suggested to the Court, requiring its solicitors to hold any monies paid by the plaintiff in respect of costs on foot of my order pending the resolution of the winding up proceedings (or as otherwise agreed by the parties or directed by the Court).

Conclusion

50. Accordingly, I have determined that the application for a stay should be dismissed and that I should award the costs of the interlocutory application, the stay application and all associated costs to the defendant. Given the “contractual stay” agreed by the protagonists, this order should not limit the plaintiff’s ability to pursue an appeal if so advised and to apply directly to the Court of Appeal for a “stay” if the current arrangements fail to lead to a permanent accord.

Representation

Gary McCarthy SC and Eoin Coffey, instructed by Turner Solicitors, for the Plaintiff Bernard Dunleavy SC and Ross Gorman, instructed by Mayson Hayes & Curran LLP, for the Defendant.