The High Court ruled that Promontoria (Arrow) Limited is entitled to summary judgment against Michael Shanahan over a loan facility originally worth €1.8 million, finding that he had not raised an arguable defence. The judge did not set the judgment amount: he said he would hear counsel on that and any related issues.
The case concerns a 2006 EBS Building Society facility to Cathal Mallon and Shanahan to buy a one-acre development site at Mill Lane, Shankill, County Dublin. Promontoria acquired the loan rights from National Asset Loan Management Limited in December 2015. Proceedings against Mallon were adjourned; the application decided in this judgment was against Shanahan.
Shanahan argued that EBS had orally agreed to limit its recourse to the property and that Promontoria was prevented by estoppel from relying on the written loan terms. He also sought a plenary hearing so he could obtain discovery. Promontoria’s application was for summary judgment, a procedure the court said should be used cautiously and where the defendant has no fair or reasonable prospect of a real defence.
The judge found that the facility letter and two later extensions, accepted by both borrowers, clearly provided for personal liability and contained no limited-recourse term. Shanahan said the oral agreement was discussed at a meeting on 30 June 2006, after the date printed on the original facility letter but before he signed it. The judge considered the alleged term irreconcilable with the written terms. He also said the defence relied on oral evidence to contradict a written commercial agreement, which was barred by the parol evidence rule.
The court found no satisfactory evidence of a shared understanding that the loan was non-recourse or of a clear promise by the plaintiff to that effect. It considered Shanahan’s later conduct, including settlement discussions and an offer above the site’s value, inconsistent with his claim. The request for a plenary hearing to allow discovery was also rejected: the defence depended on an alleged oral agreement, and the judge found no plausible basis for delaying the application for discovery.
The ruling addresses only Shanahan’s application-stage defence and Promontoria’s entitlement to summary judgment against him. The court reserved the amount of judgment and any ancillary issues for a further hearing.