The High Court rejected Hirar Properties Limited’s defence to Allied Irish Banks plc’s application for summary judgment over a €2.86 million loan, finding no fair and reasonable probability that Hirar had a real or bona fide defence. The court said it would hear counsel on the terms of the orders; the judgment does not specify the final orders or state that summary judgment was entered for AIB.
The dispute concerned a loan secured against The Globe, a property on Cecil Street in Limerick city. Hirar argued that, before the loan was restructured in May 2008, AIB had agreed to be flexible with funding and make necessary amendments to facilitate a Business Expansion Scheme investment in a proposed hostel project. John Philip (JP) Ryan, who guaranteed the loan, said AIB later failed to consent to proposed leases, and that the scheme was abandoned as a result.
The judgment records that AIB’s May 2008 sanction letter stated a €2.25 million loan to take over existing borrowing and a €2.25 million guarantee from Ryan. It did not refer to a hostel development, BES funding or a commitment to consent to leases. Ryan later negotiated a reduction in interest rates but did not seek to add the alleged BES commitment to the sanction letter.
The court considered a solicitor’s December 2009 letter requesting consent to two proposed leases. It said that the letter showed a request for consent, not an agreement to provide it. The defendants had not produced the correspondence Ryan said supported a joint venture, or evidence of follow-up requests for consent. A later accountant’s letter said Ryan expected the bank’s consent, but the court found it did not establish an agreement.
Applying the summary judgment test, the court concluded that the alleged discussions were aspirational rather than legally binding and that the evidence did not support a collateral agreement or a defence sufficient to send the case to a plenary hearing.
The judgment also addressed two related AIB proceedings against Ryan. He had sought to adjourn them pending a plenary hearing in the Hirar case. Because that case was not being sent to a plenary hearing, counsel said the adjournment application would not be pursued. The court left the precise terms of orders in all three proceedings to be addressed with counsel.