The High Court has ordered Cambourne Investments Inc, Century City Limited and Peter Curistan to pay Irish Bank Resolution Corporation Limited €11,080,593.75 over loans for units at Dublin’s Parnell Centre.
In a judgment delivered on 14 June 2012, Mr Justice Charleton found that conditions in the facility letters concerning property valuation and the loan-to-value ratio had not been met. The court held that the loan contract under those letters did not come into operation and that guarantees contained in the letters therefore failed.
But the judge found that Cambourne had agreed to borrow the money and the bank had agreed to lend it. The money remained repayable as an ordinary debt. Separate guarantees given by Peter Curistan and Century City, outside the facility letters, were valid, the court held. The judge concluded that Mr Curistan had actively participated in decisions affecting the borrowing and had assented to the changed lending circumstances. The court found no basis for equitable relief from those separate guarantees.
The dispute concerned loans associated with units 1 to 8 at the Parnell Centre. Anglo offered Cambourne facilities in February 2009 to buy units 3 to 6, while proposed facilities for units 1 and 2 and the mall area were never drawn down. The facility conditions required an updated valuation supporting a minimum combined value of €17.12 million and a loan-to-value ratio of at least 80 per cent.
A valuation in January 2009 put the units’ value at €13.7 million. The judgment said a higher valuation was presented to the bank’s credit committee, which waived the valuation and loan-to-value conditions. Neither the borrower nor the guarantors were notified, the court found. Mr Curistan received the lower written valuation in March 2009, after signing his separate guarantee, and Cambourne later drew down further funds.
The defendants had alleged that the Dublin loan was linked to Anglo’s dealings with Mr Curistan over Belfast’s Odyssey Centre, and that the bank had acted in bad faith over the Parnell Centre valuation. The judge found little credible evidence of an overarching agreement linking the two developments and did not determine the allegations about the Belfast lending. He described the Dublin lending decisions as “foolhardy” and found that the bank’s decision to appoint a receiver was made for sound commercial reasons.
The court awarded the plaintiff 12 days of the 14-day hearing and all costs previously made costs in the cause.