The High Court has refused the Governor and Company of the Bank of Ireland’s application for summary judgment of €1 million against seven businessmen trading as the Corner Park Group. It also refused the application by three defendants to dismiss the proceedings, instead granting the defendants leave to defend on three grounds.
In a judgment delivered on 14 August 2015, Mr Justice David Keane said the dispute over the meaning of the loan agreement was not sufficiently straightforward to decide on a summary application. Resolving it in that way risked injustice, he said. The court did not decide whether the bank was entitled to the €1 million or determine the defendants’ defences.
The bank said the defendants jointly and severally owed the sum under a 2006 facility letter, in addition to security over property. The defendants had borrowed €8.167 million to acquire development land at Newcastle, County Dublin. The loan was not repaid. The bank said the debt exceeded €11 million in May 2014, while the development property and other cross-secured assets were worth less than €4.5 million. Those figures were presented in the proceedings; the judgment did not determine the amount ultimately due.
The bank’s case was that the facility allowed personal recourse for up to €1 million, separate from the security and the defendants’ indemnity for certain stamp duty liabilities. It had demanded €1 million in May 2013 and sought judgment after receiving no payment.
The appearing defendants disputed that interpretation. They said the personal liability provision related only to the stamp duty indemnity, which they argued had been dealt with before the agreement was signed. Alternatively, they argued that personal recourse could arise only after the secured property was realised and a shortfall established, making the claim premature. Three defendants also argued that the agreement should be rectified because, they said, it did not record the parties’ common intention.
The judgment recounts competing affidavit evidence about negotiations. Fred Rogerson, who negotiated for the defendants, said the €1 million provision was agreed to cover a potential stamp duty exposure. The bank’s Senior Business Manager, Des Ryan, said the parties intended the personal recourse to be additional to the indemnity and available at any time. The judgment noted that the bank’s internal documents appeared to speak directly to the bank’s intention, rather than necessarily to a shared intention.
Justice Keane said the defendants’ account, if true, could arguably support a defence. He therefore granted leave to defend on all three grounds. The ruling addressed whether the case could be resolved summarily; it did not decide the underlying contractual dispute or the rectification claim.