The High Court rejected the defendants’ proposed defences to Pepper Finance Corporation (Ireland) DAC’s summary debt claim, but ordered the company to verify recent credits to the loan account before judgment is entered.
Mr Justice Quinn’s judgment, delivered on 19 February 2021, concerns facilities originally granted by IIB Bank, later KBC Bank, to Emerald Properties (IRL) Limited. The facilities were guaranteed by John McCarthy and Wendy McCarthy. Pepper sought summary judgment for €12,369,550.12; the motion claimed €12,364,400.
The defendants sought leave to defend at a plenary hearing. John McCarthy alleged that KBC had made a collateral agreement in November 2008 to continue the facility and refrain from appointing receivers if he personally funded interest shortfalls. The judge found the alleged agreement vague and unsupported by the later facility letters and correspondence. He concluded that the evidence did not establish an arguable defence on that ground.
The defendants also argued that the 2020 transfer of the loans and related rights to Pepper was champertous because litigation was already under way. The judge rejected that submission, finding the transaction akin to a loan sale with an associated right to pursue recovery, rather than a sale of a bare right to litigate.
On the amount claimed, the court considered the account statement and the defendants’ objections to interest, charges and fees. Pepper said it would waive €1,383,448.36 for the purpose of the summary judgment application if judgment were granted. The judge accepted that the defendants had enough account detail to respond to the claim and found their objections did not require the claim to be sent to a plenary hearing.
However, Pepper had relied on an earlier estimate that the eventual shortfall after property sales would be about €2.5 million, potentially rising to €4.5 million if a particular property could not be sold. At the hearing, the parties referred to No. 24 Lansdowne Road having sold for €2.1 million. The judge said this recent information had not been verified on affidavit and ordered Pepper to verify the amounts credited to Emerald’s account. He expressly limited the direction to that verification, rather than a wider update or audit of the receivership.
The court directed Pepper to file the affidavit within two weeks, with the matter to return one week later. It ordered that judgment be entered for the amount claimed, less €1,383,448.36, after the updated account balance had been verified. The judgment therefore set conditions for entering judgment; it did not state a final payable figure.