The High Court entered summary judgment for Allied Irish Banks plc for €6,324,959.81 against four borrowers over loans for a land purchase and development in Duleek, Co. Meath. Mr Justice Kelly ruled on 3 June 2010 that none of the defendants had shown an arguable defence requiring the claim to proceed to a plenary hearing.
AIB’s claim relied on a facility letter dated 19 January 2009, covering two term loan accounts. The loans had originally funded the purchase of a 1.1-acre site and the development of apartments and commercial units. The defendants accepted that they signed the 2009 facility letter. The loans were called in, and no part of the money advanced had been repaid.
Brian Higgins, Seamus Kavanagh and Glen O’Callaghan argued that they borrowed as consumers under the Consumer Credit Act 1995. They said the bank had not complied with the Act’s requirements for consumer credit agreements, making the loans unenforceable. AIB submitted that the borrowing was for a commercial partnership venture to buy and develop property for profit.
The judge found that the four men had formed a partnership for the venture and borrowed in the course of that business. He held that the consumer-credit provisions did not apply. The three defendants’ assertions that they acted as consumers did not establish an arguable defence, and judgment was entered against them for the amount claimed.
James Mansfield also argued that his involvement was limited to a one-sixth share of the land purchase borrowing, and that he was not liable for later development borrowing. The judge found this inconsistent with the 2009 facility letter, which Mansfield accepted, and with partnership documents and conduct indicating involvement in the entire debt. Any arrangement among the defendants about their respective shares could not limit the bank’s rights under the facility letter, the judge said.
Mansfield further relied on non est factum, saying he had severe reading difficulties and believed the 2009 document only extended the repayment term of the original land loan. The judge accepted for the summary judgment application that Mansfield had a very severe reading difficulty. But he found that Mansfield had not taken reasonable steps to establish the document’s general effect or told the bank about his difficulty. The judge therefore found no arguable defence on that ground. He also rejected Mansfield’s consumer-credit argument and entered judgment against him for the full amount.
The ruling determined the summary judgment application. The judgment does not describe a trial of the underlying debt claim.