The High Court has allowed three borrowers to defend a €9.68 million debt claim on one issue only: whether Promontoria (Arrow) Limited’s action was brought outside the statutory time limit. The court did not decide that the claim was statute barred, and left the issue for a further hearing, possibly as a preliminary issue.
Promontoria sought summary judgment against Pat Burke, John Donnelly and John Fleming, trading as Bridgeford Partnership, for €9,687,433.70 plus further interest. It said it had acquired their loan and related security and that the debt remained unpaid. The proceedings began in May 2017.
The loan facility, granted by EBS Building Society in February 2009, was for €9.4 million. Its amended terms made the loan repayable in full when the two-year term expired in February 2011. Promontoria accepted, for the purposes of this summary judgment application, that the cause of action accrued when the loan was not repaid at the end of that term. The defendants argued that the six-year limitation period had therefore expired before proceedings were issued.
Promontoria relied on two payments recorded against the loan in 2014, arguing that they restarted the limitation period. The defendants disputed that the entries were payments towards this debt. One was said by Donnelly to relate to insurance proceeds from a 2008 fire, received in 2009; he questioned why it appeared as credited in 2014. He also said a second entry could relate to another NAMA matter involving Fleming. The judge found the evidence on both entries insufficiently clear to resolve on the summary application and said discovery might be relevant.
Promontoria also argued that a 12-year limitation period applied to the principal because it was secured by a mortgage. The defendants disputed that the claim, as pleaded, was one to recover principal secured by a mortgage. The judge found they had raised an arguable case on that question too, without deciding its merits.
The court rejected the defendants’ other proposed defences at this stage. It found no arguable defence based on the admissibility of Promontoria’s evidence, proof that it had acquired the loan, or an alleged non-recourse joint venture with EBS. In particular, the signed facility documents provided for repayment and joint and several liability, and the court found the defendants’ supporting material did not establish an arguable non-recourse agreement.
The judge said the precise terms of the order would be discussed with counsel. The judgment therefore grants leave to defend only on the limitation issue; it does not determine the debt claim or finally resolve whether the limitation defence succeeds.