The Supreme Court has allowed part of Gerard McCaughey’s appeal against summary judgment for Irish Bank Resolution Corporation (in special liquidation), sending the dispute over a New York Hotels investment loan to a full hearing on a limited basis. It dismissed the appeal concerning a separate Woolgate loan.
The judgment, delivered by Clarke J. on 11 July 2014, arose from the bank’s claim for unpaid loans. The written facilities were repayable on demand and had backstop repayment dates no later than March 2008. McCaughey argued that statements made when the loans were arranged meant the bank would not call them in until the relevant investment funds had ended.
The High Court had entered judgment for €2,516,590.45, following an agreement between the parties that reduced the amount from €5,205,175.90 and set terms for discharging a further €2,723,612.93. Other parts of the claim had been sent to a full hearing. McCaughey appealed the judgment relating to the Woolgate and New York Hotels loans.
For the New York Hotels investment, the Supreme Court considered updated evidence about the fund’s remaining interest. The investment vehicle, Peninsula Real Estate Fund LP, retained an interest in a venture involving the Eastgate Hotel, which could produce a return. Clarke J. found an arguable basis for saying the fund had not yet ended, although the judgment said a return sufficient to clear McCaughey’s liabilities appeared highly improbable. The Court therefore allowed him to defend the loan claim at a full hearing on whether it was yet due, based on the alleged collateral contract, representation or promise that repayment would wait until the investment ended.
That permission is limited. The Court said McCaughey could not defend or counterclaim over the New York Hotels loan on a mis-selling basis. Earlier proceedings alleging mis-selling of that investment had been dismissed after a full trial, and the Supreme Court found no arguable basis to recast that claim in this case.
The Woolgate appeal was dismissed. The Court found no arguable basis for saying that fund remained active: a liquidator had been appointed to the insolvent Luxembourg company in the investment structure, with no prospect of it paying money into the fund. It also upheld the High Court’s conclusion that no arguable mis-selling claim had been made out for that loan.
The Supreme Court said it would hear further submissions on the precise form of order to follow from its conclusions.