The High Court rejected the defences advanced by James P. Connors and Luke Connors against Allied Irish Banks’ claim for €239,192.66, but deferred making a final order to allow the parties to explore whether an insurer would honour or replace an uncashed €85,000 settlement cheque.
Mr Justice Donald Binchy delivered judgment on 15 June 2018 on the bank’s application for summary judgment. The defendants accepted that they had jointly taken a €205,500 loan facility in 2010 to restructure existing borrowings and had fallen into arrears. The bank sought judgment for the outstanding balance.
The dispute arose in the aftermath of a fire that destroyed the first defendant’s home in 2009. His claim against FBD Insurance plc was declined, leading to arbitration and later court proceedings. Those proceedings ultimately settled for €195,000. The judgment records that €110,000 went towards costs, leaving €85,000 for restoring the home and replacing belongings.
The defendants argued that the bank should have acted under the insurance policy to help secure full compensation, and should have allowed the settlement proceeds to be used to restore the home. They also raised issues about debt restructuring and the bank’s transfer of €3,971.22 from the second defendant’s accounts to reduce the loan debt.
The judge said the bank had no contractual relationship with FBD and no standing to claim under the policy. He found that the policy clause cited by the defendants did not give the bank a right to join the arbitration. By the time the settlement cheque was issued jointly to the bank and the first defendant, the loan was already in arrears; applying the cheque against the debt could not be considered unreasonable, he said.
The judgment also records that the bank had offered a 12-month interest-only repayment period and had invited the defendants to discuss proposals. The court saw no prospect of the defences succeeding and said the bank was entitled to judgment for the amount claimed.
However, the €85,000 cheque had not been cashed and was said by the defendants’ counsel to be stale. The judge noted FBD might agree to honour it, and that a court order recording the settlement, if one existed, might remain enforceable. He deferred the final order so the parties could contact FBD. If FBD made a fresh payment, it could be credited against the bank’s claim. The judgment does not record a final order being made.