The High Court dismissed solicitor John Spencer’s claims against Irish Bank Resolution Corporation (IBRC) over a failed investment in a geared property fund and ruled that Stapleford Finance Limited was entitled to €1,087,071.19 plus continuing interest on a loan. The court reserved the question of interest for a further hearing.
In a judgment delivered on 19 June 2015, Ms Justice Costello found that two statements in a brochure about the Whitgift Geared Property Fund were misleading. The brochure listed two development opportunities on the same site without saying they were alternatives. It also said the Whitgift Foundation had confirmed it would support and fund plans to maximise the shopping centre’s value, although the Foundation had given no such assurance.
However, the judge dismissed Spencer’s claim for negligent misstatement. She found that the identified asset management and development opportunities were not unreasonable, and that the bank’s stated potential return of 220% over 10 years had a reasonable basis. The higher 300% figure was attributed to Howard Holdings, not represented by the bank as its own forecast.
The court also held that the brochure was preliminary marketing material, not the final basis for investment. Spencer received more detailed documents, including the Black Book, and understood that it used more cautious language and did not stand over the earlier figures. The judge concluded that he had not established that he relied on the brochure in a way that entitled him to damages. She separately rejected his claim concerning alleged oral representations, finding that he had not proved the statements attributed to bank representative David Hayes.
Spencer had invested €1 million personally in a bond linked to the fund and borrowed a further €1 million, which he advanced to the Cashel Rock Partnership for a second bond. The court noted that both bonds had no value. Spencer’s claim to recover losses associated with the partnership was not maintained after the evidence failed to establish an assignment of the partnership’s interest.
His separate claims concerning the loan also failed. The judge found the brochure statements could not be treated as terms of the loan agreement and that taking out the loan itself did not establish a loss attributable to the lender. The court rejected his request to be discharged from his loan obligations. It did not decide the legal arguments about set-off because no damages were awarded.
Stapleford had acquired the loan from IBRC in 2014 and counterclaimed for the outstanding balance. Spencer accepted that €1,087,071.19 was due as of 31 August 2014. The court entered judgment for that amount, with continuing interest, and said it would hear the parties on interest.