The High Court awarded Allied Irish Banks plc judgment for €376,323 against Peter McGrath and Mark McGrath over a 2007 loan, ruling that the defendants had not established a fair or reasonable probability of having a bona fide defence.
Mr Justice Noonan delivered the judgment on 30 July 2018. The bank had agreed to advance €788,000 for two years under a written credit agreement dated 17 October 2007. The loan was drawn down and not repaid within the agreed term. The bank’s solicitors demanded the outstanding balance on 17 June 2016.
The defendants argued that they had not received a fully signed copy of the agreement within the period required by the Consumer Credit Act 1995, and that the loan was therefore unenforceable. The judge assumed for this application, without finally deciding, that the defendants could be treated as consumers. He found the bank had provided prima facie evidence that a signed copy was sent within the relevant period. He also said the defendants’ substantial payments and their remittance to the bank of proceeds from the 2013 sale of the farm used as security were incompatible with their late claim that the agreement did not bind them. The judge concluded this point did not amount to an arguable defence.
The defendants also alleged that the bank had promoted a Fifth Belfry Bond as “risk free”, and that negligent misrepresentation had caused them investment losses. They sought to rely on a damages counterclaim against the bank. The judge held that the alleged counterclaim arose from a separate cause of action, unrelated to the credit agreement, and could not provide a defence by way of set-off to the bank’s claim.
He declined to stay execution of the judgment pending the counterclaim, describing the supporting account as vague and the potential claim as speculative at this stage. He did not decide the counterclaim’s merits or whether it was time-barred. The defendants remained free to pursue it separately.
The judge also said the defendants had not explained how an alleged refinancing agreement of 28 August 2012 created a defence, given there was no dispute that the original loan had been advanced and not repaid. The court entered judgment for the bank for the sum claimed.