The High Court has remitted a €28.8 million claim against Edward Sweeney for plenary hearing, finding that he had met the threshold for having his defence heard at trial. The court did not decide whether he is liable for the debt or whether his defences will succeed.
LSREF III Stone Investments Limited sought summary judgment of €28,792,326.80, including continuing interest on principal of €28,604,863.64 from 25 June 2015. The claim arose from guarantees and indemnities given by Mr Sweeney for debts and liabilities of five borrower companies. The judgment names them as Andounia Properties Limited, Mayenne Investments Limited, Pavilion Leisure Complex Limited, Sandreed Investments Limited and Mead Investments Limited.
The plaintiff had acquired a portfolio of loans and related security from IBRC under a loan sale deed dated 31 March 2014 and a deed of transfer dated 11 July 2014. It argued that the guarantee terms made Mr Sweeney liable on demand as a sole or primary obligor, and that he had waived defences based on set-off or counterclaim. It also said the agreements contained no condition requiring the secured properties to be sold before enforcement.
Mr Sweeney argued that agreements made when the guarantees were entered into limited enforcement until after the borrower companies’ assets had been sold. He also alleged that the plaintiff had accepted a cooperation fee and then failed to cooperate with the sales process, and that the plaintiff or the bank had frustrated attempts to obtain the best prices. His stated defences included alleged unauthorised interest increases and alleged prejudice to the guarantees. He also raised a counterclaim alleging interest overcharging and mis-selling and overcharging connected with interest rate swaps.
The judge noted conflicts in the affidavits about cooperation, any agreement to wait for property sales, the calculation and level of interest, and alleged obstruction of efforts to secure the best price. He said Mr Sweeney had given supporting details in his affidavits, including naming bank employees and describing occasions when he said agreements were made and breached. The plaintiff disputed his position.
Applying the summary judgment test, Mr Justice Brian J. McGovern concluded that it was not sufficiently clear that Mr Sweeney had no case. He said it was at least arguable that, given his asserted status as a sole or primary obligor and the wording of the loan transfer, he could raise points that would have been available to the borrower companies. The judge expressly did not decide that this argument was correct. He directed that the matter proceed to plenary hearing.