The Supreme Court has dismissed Michael and Mary Hoare’s appeal over Allied Irish Banks’ enforcement of security over 15 Galway properties, affirming the High Court orders, including a judgment for the bank of €5,609,556.76.
The appeal concerned the High Court’s dismissal of the Hoares’ claim against the bank and receiver James Luby, as well as related judgment and costs orders. The Supreme Court held there had been no error by the High Court. It did not disturb the separate High Court ruling that the bank’s claim under a guarantee was unenforceable; neither side appealed that part of the decision.
The Hoares’ business involved buying, renovating and letting student accommodation in Galway. They also ran Dangan Homes Limited, a construction company. The judgment says both businesses faced financial difficulties after the 2008 economic downturn, amid falling house prices.
The Hoares argued that an email in July 2011 recorded an agreement under which the bank would forbear from enforcing repayment obligations while they took steps concerning the properties. They said the bank breached that agreement by appointing Luby as receiver in August 2012. The bank disputed that the arrangement provided open-ended forbearance.
The Supreme Court found there had been an arrangement allowing the Hoares time to sell properties themselves if they reached a market value of €1 million. It said the arrangement had a 12-month timeframe, no sales had occurred, and the bank appointed a receiver 13 months after the arrangement was made. The Court found no evidence that the lending was on a non-recourse basis.
Because the High Court judge had heard the oral evidence, the Supreme Court applied the established approach to appellate review of factual findings. It concluded those findings were supported by credible evidence and would not interfere with them. The bank was entitled to enforce its security after the 12-month period.
The High Court had originally entered judgment for €7,453,556.76, then reduced it by €1,844,000 after dismissing the bank’s guarantee claim. The resulting judgment was €5,609,556.76. The Supreme Court affirmed the High Court orders and dismissed the appeal.