The High Court has adjourned Friends First Finance Limited’s claim for €148,525.95 against former employee Frank Cronin for a plenary hearing, after finding two of his defences arguable at this stage.
Mr Justice Herbert delivered the judgment on 15 February 2013. The company sought liberty to enter final judgment for the amount it said was owed under two written loan agreements dated 2 August 2006 and 28 May 2008. Cronin did not deny signing the agreements or challenge the amount claimed.
Cronin said he borrowed to buy investment products sold by Friends First Life Assurance Limited, a related company. He alleged that risks were not adequately disclosed and argued that Friends First Finance had duties to him as both an employee and a customer. These were allegations and submissions, not findings that the companies had acted improperly.
The judge rejected the employer-duty defence as not arguable, finding no basis in the affidavits for a duty to protect an employee from the economic loss alleged. He also found no arguable defence based on alleged statutory and Consumer Protection Code breaches. He made no finding on whether any such breach occurred, and said that even if there had been non-compliance, it would not make the loans unenforceable in these proceedings.
But the judge held that Cronin’s customer-based defence was arguable. He said it was open to argue that a special relationship between a credit institution and borrower could give rise to a duty of care, depending on the circumstances. He did not conclude that such a relationship existed or that the defence was likely to succeed.
The judge also found it arguable that, on the evidence alleged, the court might look beyond the separate corporate identities of Friends First Finance and Friends First Life Assurance. That issue, too, remained undecided.
The court adjourned the case for plenary hearing, to proceed as if begun by plenary summons. The judge said he would hear the parties further on pleadings, discovery and other interlocutory orders. He did not enter final judgment for the lender or determine the underlying loan claim.