The High Court has granted Allied Irish Banks plc summary judgment against brothers Alec Flood and David Flood over business lending connected to a Sutton property venture and a partnership overdraft.
Mr Justice McDermott ordered judgment of €14,423,696.65 against Alec Flood and €13,497,857.50 against David Flood. The court was deciding whether the bank could obtain judgment through the summary procedure or whether the defendants had shown an arguable defence requiring a full hearing. It did not determine the separate claims concerning guarantees and a land charge given by their late father’s estate.
The first loan was for €12.715 million, advanced in 2007 to Alec Flood and his brother Tom to buy a 1.987-acre site at Railway Avenue, Sutton. David Flood guaranteed the loan up to €12.715 million. The partnership also had an overdraft facility, renewed in 2010 at €781,586 for working capital. Both facilities were repayable on demand. The bank issued demands in 2010 and brought the summary proceedings in May 2016.
The brothers argued, among other things, that valid security and an €8 million valuation of their late father’s land were conditions of their agreements. David Flood said the bank’s valuation had led him to believe the security covered the lending at an adequate level. The judge held that the written agreements did not make their liability dependent on the father’s guarantee or charge, or require the bank to enforce that security first. The alleged conditions were not supported by cogent evidence and could not provide an arguable defence on the materials before the court.
The court also rejected claims that the proceedings were an abusive retaliation for David Flood’s affidavit in the separate estate case. It found no arguable basis to dismiss the bank’s claim on that ground. Other proposed defences—including Alec Flood’s limitation argument, David Flood’s claim that he acted as a consumer, and a dispute over the allocation of the Sutton sale proceeds—were also rejected for purposes of the summary judgment application.
The judge concluded that the defendants had not shown an arguable, credible or bona fide defence to the bank’s claims and entered summary judgment for the specified amounts.