The High Court ruled that a €300,000 payment made by businessman Damien Stapleton to Philip Doran in July 2008 was a personal loan to Mr Doran and fell to be repaid by him.
Mr Doran had argued that the money was either a loan to Easiwrap Ltd., which he owned and controlled, or a downpayment under an arrangement for Mr Stapleton to acquire half the company for €1.7 million. The court found that the payment was originally intended as a personal loan, and that the evidence did not establish that the parties later unequivocally changed that agreement.
The judgment says the money was transferred from Mr Stapleton’s personal bank account to Mr Doran’s personal account. A memorandum prepared by Mr Stapleton’s financial adviser recorded that Mr Stapleton had agreed to put in €300,000 “via loan to PD to be refunded from equity release from Ulster Bank”. A January 2009 letter from Mr Doran’s solicitors also described it as a personal loan to him, followed by an equivalent loan from him to the company.
The court heard that Easiwrap was facing cashflow difficulties after losses on a US venture and rising polymer prices. A bank equity-release proposal did not proceed. Mr Doran later transferred the money to Easiwrap in tranches, while Mr Stapleton became increasingly involved in the company and invested a further €434,000 from January 2009. The judge accepted evidence that by mid-2009 Mr Stapleton and his advisers had de facto control of the business and that he was, in all but name, a shadow director.
That later involvement did not settle the original loan’s status. The judge said it could reflect an effort to protect Mr Stapleton’s later investment, as well as the possibility that the July 2008 loan had been treated as company funding. Because the later conduct was ambiguous, it did not prove that the parties had tacitly varied the original agreement. The judgment therefore rejected Mr Doran’s defence and declared the €300,000 to be a personal loan repayable by him.