The High Court granted Seaconview Designated Activity Company summary judgment against property developer John Lally for just short of €9 million, plus interest, under an interest shortfall guarantee connected to a loan to Brackville Holdings Limited.
Mr Justice Max Barrett delivered the judgment on 20 July 2017. The case was a summary debt application. The court concluded that Mr Lally’s affidavit evidence disclosed no arguable defence and that the issues he raised were either not triable or simple enough to determine in the summary proceedings.
Brackville had borrowed €82.5 million under a 2006 credit agreement with AIB and Ulster Bank. Mr Lally guaranteed Brackville’s interest payment obligations. Seaconview said it had succeeded to Ulster Bank’s rights and could enforce the guarantee. After Brackville failed to meet a demand for the debt in July 2016, a receiver was appointed over its assets. Proceeds from asset sales reduced the liabilities, but Seaconview said close to €9 million remained owing, with daily interest accruing.
Mr Lally challenged Seaconview’s entitlement to demand payment, including on the basis that transfer documents were incomplete or unclear. The court found that the transfer certificate, despite blank sections in its schedule, transferred Ulster Bank’s full lender commitment to Seaconview. It also found that the mortgage sale deed and transfer covered the interest shortfall guarantee.
The court rejected Mr Lally’s objections to evidence from a financial consultant employed by a Seaconview service provider, finding there was no requirement that the creditor’s main affidavit be sworn by its own employee. It also rejected arguments based on a bank confirmation letter mistakenly expressed in sterling, discrepancies in demand figures and redemption statements, and the application of funds received by the receiver. The court found no evidence that the loan had been varied in a way that discharged the guarantee, and said the guarantee was continuing, so the delay in suing did not provide a defence.
The judgment records that Mr Lally did not object to the receiver’s appointment. The court also said a guarantor may, subject to the contract, challenge whether the amount claimed is actually owing, including by raising how receivership proceeds were treated. It found no such issue established on the evidence in this application and granted the summary judgment sought.