The High Court granted summary judgment to the Governor and Company of the Bank of Ireland for €1,743,896.15, plus accruing interest, against John Flanagan and Gerard Lillis over two loan accounts. Mr Justice Sean Ryan gave judgment on 14 May 2012.
The bank’s motion concerned advances of €1.5 million for a commercial mortgage and €230,000 for a bridging loan. The loans were later restructured under a facility letter dated 4 March 2009. The judgment records that the defendants borrowed the money and had not kept up repayments as they fell due. The bank said the accounts were in default and that it had demanded payment.
Flanagan filed affidavits for himself and Lillis and represented both defendants at the hearing. Their submissions included that a deed of covenant concerning an intoxicating liquor licence had been required as security but was not put in place; that discussions after they signed the 2009 facility letter meant no final contract had been reached; that there had been no drawdown or consideration under that letter; and that the bank had misrepresented the loans to regulators. Flanagan also argued that the bank’s recourse was limited to trading profits from the hotel premises and challenged whether the defendants had received formal notice of default.
The judge rejected those proposed defences. He found that the bank had waived its right to require the licence security after advancing the loans, and that this did not prevent it recovering the money. The signed facility letter established the revised arrangement; later proposals to change payment terms did not show that a replacement agreement had been reached. The judge considered the drawdown argument a misunderstanding because the 2009 letter restructured existing loans rather than providing a further cash advance.
The alleged regulatory misrepresentation was disputed by the bank. The judge said that, even if accepted for argument, it did not affect or prejudice the defendants and did not provide a defence. He found the claimed restriction of the bank’s recourse had been raised late, lacked support in the documents and earlier exchanges, and was inconsistent with the defendants’ previous conduct.
Applying the summary judgment test, the court concluded there was no genuine or credible factual issue to be tried and no arguable legal defence. It entered judgment for the plaintiff in the amount claimed. The judgment does not state a separate order for costs.