The Court of Appeal has sent two issues to a plenary hearing in a debt recovery case involving Feniton Property Finance DAC, Pepper Finance Corporation (Ireland) DAC and Eugene McCool. The appeal concerned a High Court summary judgment ordering McCool to pay €2,429,789.73. The court did not overturn liability outright or order a new hearing of every defence: it granted leave to defend only on the amount outstanding and whether the guarantee was conditional.
The plaintiffs say the debt arose from a personal borrowing and a guarantee of loans to Lyngarth Ltd, of which McCool was a director and shareholder. The Court of Appeal held that the plaintiffs had produced evidence of the loan facilities and guarantee, and McCool had not denied signing the relevant documents. But the evidence of what had been advanced, repaid and remained due was drawn from bank statements. The plaintiffs’ witness, John Burke, had not been involved in the original lending and did not say he had reviewed the original lenders’ records or verified that the statements were true copies. The court found no evidence that account statements had been sent to McCool throughout the lending relationship.
McCool disputed the balances. The court said the amounts due on the personal and company facilities must therefore be proved at trial, including the advances, repayments and credits from receiver sales. It also said McCool could pursue his contention that only €24,500 remained due on the personal facility, although that figure had been raised in submissions rather than sworn evidence.
The second issue concerns a 27 January 2009 letter from McCool’s solicitors, which said documents including the guarantee were being provided on the condition that the bank advanced funds under the loan facility. The facility provided for up to €466,000, but the evidence showed that €70,200 was drawn down. The appeal court said the meaning and effect of the letter could not fairly be resolved on the summary application and should be considered at trial.
The court rejected McCool’s other grounds, including arguments based on alleged lender and receiver misconduct, the particulars in the summons, limitation, and the assignment of the loans. It held that the alleged conduct of the original lenders and receivers did not provide a defence against these plaintiffs in this case. The court also said the trial would be confined to the two remitted issues; other defences raised or available in the summary judgment application could not be revived there.
The appeal was partly successful for each side. The Court of Appeal proposed reserving the costs of the summary judgment application and appeal to the trial judge, subject to either party notifying the court within 14 days if they disagreed.