The High Court has proposed judgments requiring Philip Gaffney to repay a total of US$372,043.70 borrowed from his brothers Alan and Derek Gaffney, while declining to enforce the agreed 15% interest rate.
In a judgment delivered electronically on 29 April 2022, Mr Justice Barr found that the October 2015 oral agreement was a short-term loan to help Philip Gaffney fulfil a large order for Irish souvenir products from US shopping channel QVC. The court found Alan and Derek Gaffney were the lenders and Philip was the sole borrower. It was not satisfied that Philip’s wife, Teresa, was party to the agreement.
The court proposed judgment in the 2016 action for US$272,043.70 in favour of Alan Gaffney and US$100,000 in favour of Derek Gaffney, each against Philip. It proposed dismissing the claim against Teresa.
The judgment said the loan was repayable in April 2016, whether or not QVC had paid by then. The reference to QVC proceeds gave the lenders priority to be repaid from that payment, the court found.
Although Philip had agreed to pay 15% interest, the court declined to enforce that term. It found the rate extortionate and the bargain unconscionable, citing a significant inequality in the parties’ bargaining power.
The dispute arose after Philip secured a QVC order for 67,000 units, worth about US$1.3 million, for a programme planned for March 2016. The parties agreed that about US$370,000 was provided to Philip or his suppliers. They disagreed over whether the money was a loan from Alan and Derek or an investment by Alan and his wife Nicole, and over who had agreed to provide it.
Philip’s separate 2017 action alleged that Alan and Nicole had promised to invest €400,000 in his business and breached that agreement by not providing further funding. The court rejected that account, finding the arrangement was a loan from Alan and Derek, not a long-term investment by Alan and Nicole. It proposed dismissing Philip’s action.
The court also found, on the balance of probabilities, that the QVC order was lost because Philip had not passed all required tests and/or could not produce the 67,000 units in time—not because Alan or Derek breached an agreement by withdrawing funding.
No relief had been sought on whether the Naul, Co Meath property was security for the loan, so the court did not rule on that issue. It said the parties could make written submissions on costs within two weeks of delivery of the electronic judgment; the orders described in the judgment were proposed.