The High Court has refused Patrick and Angela Rainsford leave to defend claims brought by trustees of the Michael Forman Living Trust over 16 promissory notes. It ordered judgment for US$4,708,739 against Patrick Rainsford and US$2,327,709 against Angela Rainsford, with interest at the contracted rate and a US$109,000 credit deducted from the total claimed.
The ruling, delivered by Mr Justice Quinn on 29 October 2021, followed an application for summary judgment. The defendants accepted that the money had been advanced and not repaid, and that they had signed the notes and related agreements. They argued that the loans formed part of a “loan for equity” arrangement agreed in 2008: according to Patrick Rainsford, repayment would be sought only when the businesses could fund it or after a sale or flotation.
The court said leave to defend required an arguable case. It found the defendants’ account was contradicted by the written documents, which repeatedly set specific repayment dates without making payment conditional on a business sale or other equity outcome. Thirty-five documents were signed by Patrick Rainsford and 34 by Angela Rainsford, the judge said. Extensions recorded in those documents set new maturity dates; the final common date was 28 February 2019.
The judge acknowledged that the defendants may have believed Mr Forman would continue granting extensions. But he found no evidence supporting the claim that this would continue after the final extension. The affidavits and emails relied on by the defendants did not establish an agreement overriding the written repayment terms. The court also rejected estoppel as a defence, finding no evidence that the defendants relied to their detriment on a representation or pattern of extensions.
The trustees sought the judgment on behalf of the trust. Their standing to pursue the claim was not disputed. The court held that Irish law governed the first two notes under a 2018 amendment and that Irish procedure governed the summary judgment test. The later notes were governed by California law, but the defendants did not pursue their earlier jurisdiction challenge, and the court applied the Irish test for leave to defend.
The court accepted a US$109,000 credit for an ex gratia payment made by eMuse to the trust. The judgment records that this payment was not made by either defendant, but found the defendants’ account of it specific and uncontroverted. The order was for the amounts claimed, less that credit, together with contracted interest. The judgment does not state a final net figure after applying the credit or specify a quantified interest total.