The High Court has dismissed a counterclaim by Thomas and Mary Heffernan against ACC Loan Management Limited over the refusal to release €100,000 intended to fund planning work on development land at Slieverue, Co. Kilkenny.
In a judgment delivered on 27 November 2015, Mr Justice Michael White held that the lender was entitled under the loan terms and mortgage documents to insist that the Heffernans alter wayleave agreements before drawing down the money. The court considered that the agreements could affect the lender’s security.
The counterclaim followed an earlier order in November 2013 granting the lender judgment for €3.366 million in principal. The claim for interest had been adjourned to a plenary hearing, and the Heffernans were permitted to bring a counterclaim. At the 2015 hearing, they pursued only their claim that the lender breached its contract by refusing the €100,000 drawdown under a facility letter issued in December 2008.
The wayleaves, signed with neighbours in November 2008, provided for payments and an entitlement to a house or its market value. Internal bank emails raised concern that those rights might rank ahead of the bank’s security. The judgment records that bank employees considered alternatives, including proceeding with the loan despite the risk, and that a postponement of the neighbours’ rights may have been a possible compromise. The judge said that option did not appear to have been seriously considered by the Heffernans, who feared renegotiation could jeopardise the agreements.
The judge said it was unfortunate the Heffernans could not draw down the sanctioned sum and noted that the first defendant was aggrieved. He nevertheless concluded there were appropriate reasons for the refusal and dismissed the counterclaim. As a result, he did not decide whether a bank could refuse to honour a loan facility without good reason.
The judgment also addressed three other counterclaim grounds, which the Heffernans had abandoned or stopped pursuing during the hearing. The judge said they could not have succeeded.
On the lender’s outstanding interest claim, the court disallowed surcharge interest and directed that interest be calculated from the original loan drawdown to the date of judgment at 2% per annum and Euribor, in accordance with the facility terms.