The High Court has refused Emberton Finance Ltd.’s application for summary judgment against Maurice Cronin over a €259,966.45 loan claim, sending the case to a plenary hearing on one issue: Cronin’s defence that he signed the loan agreement believing it was non-recourse.
Mr Justice McDermott ruled on 19 October 2018 that Cronin had raised an arguable defence of non est factum — that he believed he was signing a document of a fundamentally different character from the one he signed. The judge directed that the issue be fully pleaded. He did not determine whether Cronin’s account was true or whether the loan debt is ultimately payable.
The €250,000 loan was advanced in October 2007 by Friends First Finance Ltd. to fund Cronin’s investment in a New York office-building project. It was repayable by December 2012. Emberton later acquired the benefit of the loan. The lender said €259,966.45 remained due, including €9,966.45 in interest, and that no interest had been added after August 2010.
Cronin said his accountant, the late James Loughnane, told him the loan would be non-recourse against him personally, with recovery limited to the security. He said he would not have entered the investment or taken the loan otherwise. The written facility contained no such restriction and provided for repayment by Cronin. The judge noted that Cronin had signed the agreement, received a copy and had an opportunity to withdraw, but said that at this stage he had to accept the facts Cronin put forward for the summary judgment application. Those facts were capable of supporting a defence if accepted.
The judge rejected Cronin’s proposed defences based on alleged breaches of the Consumer Credit Act 1995, finding no arguable basis to make the loan unenforceable. He also refused to dismiss the proceedings because Loughnane had died shortly before the second case was issued. The judge said any application concerning the alleged prejudice from his unavailability could be considered later under the relevant court rules, after the issues had been clarified and discovery obtained if appropriate.
Friends First had brought earlier proceedings for the same amount. Those proceedings were struck out in January 2013 after the lender failed to provide a further affidavit. Emberton issued the present proceedings in March 2016. The order in this judgment gives Cronin leave to defend on the non est factum issue alone; the underlying claim remains for determination at the plenary hearing.