The High Court dismissed Patrick M. Keane’s claim against Allied Irish Banks plc over a put and call option linked to the sale of Oranmore Nursing Home, ruling that the claim was unsustainable and bound to fail.
In a judgment delivered on 8 November 2016, Ms Justice Murphy exercised the court’s inherent jurisdiction to dismiss the proceedings. The application was decided on uncontroverted affidavit evidence and legal submissions; it was not a full hearing of the underlying claim.
Keane sought specific performance of an option agreement, arguing that AIB had become obliged to buy the nursing home after events he said triggered the put option. He claimed the bank was required to pay an amount equivalent to the loan balance, which he put at €7,406,467.44 in July 2015. He also argued that written notice was unnecessary because the bank knew he was relying on the option.
The bank said the documents assigned only the benefits of the option, not its contractual obligations. The judge agreed: the assignments described in the evidence transferred the option’s benefits and imposed no duty on AIB to purchase the property. She also held that, if Keane had transferred both benefits and burdens as he argued, he would have retained no interest in the agreement on which to sue.
The documents presented another obstacle. The assignments referred to an option agreement dated 30 November 2004, but no such agreement was before the court, and the evidence did not establish that one existed. The two option agreements produced were dated 16 December 2005; the court found no evidence that those agreements had been assigned to AIB.
The court also found that Keane had not served the written notice required to exercise the put option. It rejected his description of that requirement as a technicality. Keane had surrendered his leasehold interest when the nursing home was sold to a third party, leaving him without an interest the option could cover, the judge said.
The judgment records that the nursing home was sold for €1.62 million during earlier enforcement proceedings in July 2015, leaving a multi-million-euro loan shortfall. The court acknowledged Keane’s submission that concern for more than 40 residents and 56 staff members had motivated his cooperation with the sale, but said that did not explain why he had not raised the option claim as a defence or counterclaim in the earlier debt proceedings.
The court dismissed the claim as unsustainable and bound to fail. It did not order AIB to purchase the nursing home or grant the specific performance Keane sought.