The High Court has found that two former partners must contribute a total of €200,975 towards losses incurred by a partnership, after rejecting their defences to a claim brought by another partner who had paid the partnership’s liabilities.
In a judgment delivered electronically on 22 March 2024, Mr Justice Barr found that William Flood owed Mark Foran €138,112 and Michael Hughes owed him €62,863. The court proposed entering judgment for those amounts, but invited written submissions on the terms of the final order and costs. The case was listed for mention on 24 April 2024.
The dispute arose from a partnership formed to pursue planning permission for a development on land in County Roscommon. The partnership borrowed €1.266 million from ACC Bank in February 2008. The court found that the loan was used as a temporary source of funds, including for Foran and Flood’s investments in Dubai. It rejected their evidence that the loan was taken primarily to meet costs relating to a planning appeal or to buy a neighbour’s land. The court said the reason the loan was twice the amount needed for the Dubai investments remained unknown.
The judge found that Hughes had consented to the loan and to the withdrawals made by Foran and Flood. He knew the withdrawals were intended to address problems with their Dubai investments, and did not object after receiving bank statements. The court therefore rejected Hughes’s argument that Foran should account to the partnership for profits from his Dubai investment as a secret profit. Foran had repaid his borrowings, and his only obligation was to repay the partnership, the judge held.
Flood argued that he had not consented to a 2017 settlement with ACC, and that a €130,000 payment by his mother, Rose Flood, had settled all his partnership liabilities. The court rejected both arguments. It found the payment was made on Flood’s behalf towards the bank settlement, but was not intended to extinguish any further liability to the partnership.
The partnership accountant’s unchallenged figures showed overall losses of €267,739. After accounting for partner payments and withdrawals, Foran had overpaid by €192,881, while Flood and Hughes had underpaid by €138,112 and €62,863 respectively. The judgment records the proposed orders as including costs against the defendants jointly and severally, to be adjudicated if not agreed. Final orders had not yet been made in the judgment.