The Court of Appeal upheld a summary judgment of €671,097.14 in favour of ACC Loan Management Limited against Oliver and Margaret Kelly, but stayed most enforcement for three months to allow them to begin proceedings over funds they say are missing from bank accounts.
In a judgment delivered on 22 March 2019, Ms Justice Baker said the couple had not established a bona fide defence to the bank’s claim on two loan facilities. The appeal arose from an order by Mr Justice Eagar in the High Court. The Court of Appeal allowed the appeal in part because the trial judge had not considered the possible effect of a separate counterclaim or cross-claim.
The bank’s claim comprised €71,097.14 remaining after the sale of property secured against the first loan, and the €600,000 capital sum advanced under the second loan. The bank waived its claim for interest. The couple had argued that at least €489,000 they believed had been deposited with the bank could not be accounted for, and that the bank had also failed to provide development funding allegedly promised in 2006.
The court rejected the proposed €4 million claim for lost development profits as a basis to challenge the debt judgment. It said the evidence did not support a credible claim that a contract to provide the funding had been made. The court also found the alleged missing deposits did not establish a defence to the loans or an equitable set-off against the debt.
However, Baker J considered that the couple had presented a broadly plausible argument that the bank held deposits which had not been located. She noted that the bank had not explained how the insurance cheque, made payable into an ACC account, was processed, or how its records reflected the alleged deposits. She did not assess the strength or legal basis of any claim the couple might bring.
The court ordered that execution of the judgment be stayed for three months, on condition that the couple commence proceedings concerning the missing funds and deliver a statement of claim within that period. The parties were directed to seek case management in the High Court within six weeks after service of the statement of claim. The bank may seek further directions, including an application to lift the stay.
The stay does not prevent the bank from registering a judgment mortgage. Other enforcement steps, including action on foot of a registered judgment mortgage, are stayed. The court directed that further applications be made to the High Court.