The Court of Appeal has dismissed Seamus Downes’s appeals against judgments holding him liable for a 2003 guarantee and a loan connected to the purchase of a shopping centre in Castletroy, County Limerick. The court upheld the High Court’s conclusions but left the final appeal costs orders open to written submissions.
The appeals arose from two actions brought by National Asset Loan Management Ltd (NALM) against Downes and connected borrowers and guarantors. The loans and related security had been transferred from Allied Irish Banks (AIB) to NALM in 2010. In January 2014, the High Court found Downes liable for more than €1.6 million on the Castletroy loan and €5.84 million under a guarantee he had given for liabilities of Mount Kennett Investments (MKI).
The Court of Appeal agreed that arrangements AIB made with MKI and other guarantors in 2010 did not release Downes from the 2003 guarantee. The judgment said there was no evidence of an agreement between Downes and AIB or NALM releasing him. The guarantee allowed AIB to continue or vary facilities and take further guarantees without Downes’s consent. The court also rejected his contention that AIB or NALM were prevented from relying on the guarantee by their conduct or by assurances.
The court likewise upheld the rejection of an estoppel defence concerning the Castletroy loan. It said that continued interest payments and reductions in the loan capital did not establish a basis to prevent the lenders from demanding repayment.
Downes also challenged the transfers of the MKI and Castletroy loans and related security to NALM. The court held those challenges were out of time because they had not been brought through judicial review within the statutory period. It said the certificates issued under the National Asset Management Agency Act 2009 were conclusive as to NALM holding the liabilities and associated security. The court did not decide whether the Castletroy loan qualified as an eligible bank asset or what effect any failure to notify Downes before transfer might have had.
By the appeal hearing, Castletroy had been sold and the judgment said the loan liability had been discharged. The appeal concerning that loan therefore related to legal costs. The court said any dispute about accounting for sale proceeds beyond the loan, receivers’ and legal costs could be litigated elsewhere.
The court dismissed both appeals. It gave a provisional view that the respondents should receive their costs in the guarantee action, with no costs order in the Castletroy action. Parties were allowed 14 days to make written submissions on an alternative costs order, followed by 14 days for responses.