The High Court has sent Garrett Kelleher’s estoppel defence to a plenary hearing in National Assets Loan Management Limited’s claim on personal guarantees, while rejecting his counterclaim over the sale of a loan secured on the Chicago Spire site.
Mr Justice Fullam delivered the judgment on 24 February 2015. NALM sought summary judgment for €46,834,427.35, plus continuing interest, under guarantees given by Kelleher for loans to companies in the Shelbourne Connection. The judgment says the guarantees, loans, borrower defaults, demands and amount of Kelleher’s indebtedness were not denied.
Kelleher argued that NALM was estopped from enforcing the guarantees. He said John Mulcahy had assured him that if he cooperated with NAMA, the guarantees would not be enforced. Kelleher said he relied on those assurances by working with NAMA, helping enhance the Chicago Spire project and providing additional security. NALM disputed that any such assurance was given and said its forbearance was conditional on continued cooperation and compliance with stated requirements.
The court found evidence of the ingredients of promissory estoppel and said the central factual dispute was whether Kelleher had met the cooperation condition. It held that he had an arguable estoppel defence. It also found an arguable case on whether the statutory one-month judicial review limit prevented him from raising that defence in response to NALM’s claim. Kelleher had not sought judicial review of the enforcement decision. The court said the intertwined legal and factual questions were not suitable for determination on the summary judgment application.
Kelleher also claimed NALM sold the Chicago Spire loan at an undervalue, arguing that better marketing and development could have produced a site value of $350 million and enabled him to clear the guaranteed liabilities. The loan was sold in June 2013 for a price believed to be $35 million. NALM disputed that it owed duties beyond those of an ordinary mortgagee and argued that the claimed loss was not Kelleher’s personal loss.
The judge held that the National Asset Management Agency Act 2009 imposed no additional duties towards debtors or guarantors beyond the ordinary mortgagee duties. He said NALM could sell the loan as it stood without improving the secured asset or waiting for the market to improve. The judgment also concluded that, even on Kelleher’s figures, the sale could not have generated enough to clear the guaranteed debts. The counterclaim had no reality.
The court answered that it was not clear Kelleher had no case on estoppel, but that he had no viable counterclaim for damage to the assets. It remitted the estoppel issue for plenary hearing. The judgment did not finally determine the guarantee claim or the estoppel defence.