The High Court ruled that Irish Bank Resolution Corporation could demand repayment from property businessman John Morrissey in January 2010 under facilities granted the previous year. It also found that the relationship between the bank and Mr Morrissey remained contractual and was not fiduciary.
The judgment, delivered by Ms Justice Finlay Geoghegan on 14 May 2013, resolves two issues set down for determination in advance of the rest of the case. The bank’s summary summons seeks €36,787,674.38 plus interest. The judge stressed that the ruling does not determine the full claim or Mr Morrissey’s counterclaim; directions for the remaining proceedings were to be considered later.
The dispute over the demand centred on a February 2009 facility letter. It made the facilities repayable on or before 31 July 2009 and allowed the bank to demand repayment at its discretion. The judge found that the written agreement remained in force after that date and that Mr Morrissey became obliged to repay on 31 July.
The judge also found that, at a July 2009 meeting, bank manager Kieran Gilmartin agreed the bank would not demand repayment for an unspecified period if Mr Morrissey continued paying net rent into the bank. But the judge found no promise that this forbearance would continue beyond the end of 2009. By November, Mr Morrissey and his advisers understood the arrangement would expire on 31 December. The court therefore found no continuing agreement or representation preventing a demand in January 2010.
The judge rejected Mr Morrissey’s contention that the bank’s dealings with him, including its lending and communications over several years, created a fiduciary relationship. She found that he was an experienced businessperson, negotiated facility terms, and neither sought nor received bank advice on his property or share investments. Both sides had pursued the relationship for their own perceived commercial advantage.
The court formally declared that the bank was entitled to make the demand and that the relationship did not go beyond a contractual one. It did not decide the accuracy of the amount claimed, nor review whether the bank’s decision not to extend the facilities was fair or reasonable.