The High Court has refused Patrick Digan’s application for summary judgment against Leonora O’Brien over an alleged €90,000 loan, remitting the action for a plenary hearing. Mr Justice Barr said oral evidence would be needed to determine the true nature of the parties’ agreement.
Digan claimed that an April 2017 agreement required him to lend O’Brien €90,000, which she would use to make a bridging loan to Pharmapod Ltd. He said he paid €180,000 directly to the company: €90,000 as his own investment and €90,000 on O’Brien’s behalf. He sought €158,687.65, including interest at 10% a year.
O’Brien’s position was that Digan agreed to provide €180,000 to Pharmapod, and that she would guarantee repayment of €90,000 by the company only while funding negotiations continued or if those negotiations failed. The company later secured an investment of about €1.88 million from the Canadian Pharmacists Association, but repaid it in 2021 after a breach of warranty. The company entered receivership and was later put into liquidation.
The judge identified a technical problem with Digan’s application: the version of the agreement he relied on for summary judgment had not been exhibited in his first affidavit. The document exhibited later differed from the version he described as signed and witnessed. The court held that judgment could not be marked summarily on the basis of a document that had not been exhibited.
The judge also found that O’Brien had an arguable defence. The agreement referred both to a loan to her and to her personal guarantee of that loan. The company’s accounts recorded it as owing money to Digan, but did not record a loan from O’Brien; the judge noted that Digan was a director and had signed off on the accounts. The court also considered the absence of stated repayment terms, the delay until September 2022 before repayment was sought, and a 2018 investment agreement that could support O’Brien’s contention that earlier arrangements relating to the company were terminated.
The court did not decide who owed the money or determine the parties’ competing accounts of the 2017 agreement. It refused the summary judgment relief and directed that the action proceed to a plenary hearing. The parties are to be heard on a timeline for delivery of pleadings.