The High Court has granted Danske Bank A/S, trading as National Irish Bank, summary judgment against Robert McQuillan for the outstanding balance of his loan, with the amount to be quantified. It did not decide who owns a separate fund of sale proceeds claimed by the bank and by Mr. McQuillan and Jane McQuillan. Instead, it directed Avestus Capital Partners to pay that money into court and ordered a trial of the competing claims.
In a judgment delivered on 14 November 2012, Ms Justice Laffoy considered two proceedings heard together: the bank’s debt claim against Mr. McQuillan and Avestus’s interpleader application. Avestus, formerly known as Quinlan Private, said it claimed no interest in the disputed money and asked the court to decide how it should be disposed of.
The bank’s loan to Mr. McQuillan funded an investment in the Knightsbridge Scheme in London. The parties disputed whether the bank’s security extended to all of Mr. McQuillan’s investment or only the portion funded by the bank. Mr. and Mrs. McQuillan maintained that a second tranche, funded through a separate AIB loan, was their joint investment and should not be paid to the bank. The bank claimed the full return. Avestus had already remitted half of the sale return to the bank.
The bank initially demanded immediate repayment in July 2011, relying on a loan term allowing acceleration where, in its reasonable opinion, circumstances had materially changed. Mr. McQuillan argued that the balance was not yet due and disputed the bank’s reliance on the security documents. The judge concluded that by the October 2012 hearing the contractual final repayment date of 31 July 2012 had passed, making the balance repayable regardless of the earlier demand. She also found the bank’s view that circumstances had materially changed was reasonable, given Mr. McQuillan’s position on the security. The court held that he had no prospect of successfully defending the debt proceedings and ordered judgment for principal and interest once the figures were updated.
The judge found that Avestus met the requirements for interpleader relief. But the competing claims depended on unresolved questions about the loan terms, the execution and scope of a Luxembourg-law pledge, and whether Avestus’s 2010 undertaking to the bank replaced that pledge. The sum in dispute was €709,626.16 as of April 2011. The court declined the bank’s request to determine entitlement summarily, directed Avestus to pay the money into court, and ordered an issue to be tried between the bank and the McQuillans. Avestus was not to be joined to that trial, and the parties’ positions on any claims against it were reserved.