The High Court has refused Gembira Limited’s application for summary judgment against Amtrust Europe Limited over a performance bond linked to a Dublin 15 housing development. Mr Justice Michael Quinn granted Amtrust leave to defend the claim, leaving the underlying dispute for a plenary hearing.
Gembira sought €1,360,735, the agreed maximum remaining under a bond issued for MDY Construction Limited’s contract to build 176 homes and associated siteworks at Hollywoodrath, Hollystown. The bond provided for payment if MDY’s obligation to complete the works was terminated under the construction contract and MDY was liable for a debt under clause 33(c)(iv).
MDY entered examinership in September 2018. Gembira terminated its contract and engaged replacement contractors to complete the works, which were finished in August 2020. Gembira relied on an architect’s document dated 9 September 2020, which gave an estimated value of €35,948,975 for Phase 2, to support its claim that completion costs and earlier payments exceeded the original contract amount.
The judge found the bond was conditional and required Gembira to establish the contractor’s liability using the calculation set out in clause 33. The architect’s document was an estimate, covered both Phase 1 and Phase 2, and did not verify expenses properly incurred under clause 33. Neither the contract nor the bond made that document conclusive. The judge said Gembira did not first have to pursue MDY separately, but still had to establish the debt before recovering under the bond.
Amtrust also raised disputes about the termination notices, compliance with section 549 of the Companies Act 2014, amounts claimed by MDY, and €332,734 in direct payments Gembira said it made to MDY’s creditors. The judge said these matters, alongside the questions about the account between Gembira and MDY, could not be resolved on the summary application and could be advanced as defences at trial.
The court did not dismiss the action, as Amtrust had requested. It refused summary judgment and granted leave to defend, allowing Gembira to continue pursuing its claim at a plenary hearing. The judgment did not determine whether the bond is ultimately payable or establish the amount, if any, due.