The High Court has declined to grant summary judgment to Cabot Asset Purchases (Ireland) Limited in its debt claim against Sean Mooney and Grainne Mooney, referring the case to a plenary hearing instead.
In a judgment delivered on 4 May 2018, Mr Justice Max Barrett said Cabot had not established, on the balance of probabilities, that the Mooneys defaulted on a 2006 loan. The defendants had firmly denied defaulting on their repayment obligations.
The facility letter recorded a loan of €201,000, including €200,000 for investment in a property development fund and €1,000 for an arrangement fee. Its repayment clause said the capital and interest would be cleared at the end of the term from a maturing investment, with the capital element payable from funds maturing under a Friends First Crystal Development Fund policy.
Cabot relied on demand letters sent by Ulster Bank in September 2014. The judge noted that the letters did not refer to the facility letter or its repayment arrangements. They said the borrowers had failed to provide monthly instalments, while the facility letter appeared to contemplate repayment at the end of the term rather than monthly instalments. The judge said Cabot’s evidence that money was owed on this loan, based on the demand letters, did little to satisfy its burden of proof.
The court also considered whether the loan was limited recourse, as the defendants argued. The judge said it was unclear how the fund proceeds were meant to reach Ulster Bank or whether there had been a default in that respect. He left the contractual interpretation issue for the judge at the plenary hearing, where evidence could be heard if necessary.
The case had come before the High Court by way of appeal from an order of the Master, who had struck out the proceedings after a contested application. The judgment explained that the Master lacked jurisdiction to determine contested cases and could only transfer them to a judge. The defendants had effectively abandoned their separate challenge to Cabot’s standing, and the judge accepted that Cabot was the proper party to bring the claim.
Applying the test for summary judgment, the court found the defendants had an arguable defence and that material issues remained for trial. It declined to enter summary judgment and referred the matter to plenary hearing. The judgment did not determine whether the Mooneys ultimately owed the claimed debt.