ACC Bank PLC -v- Fairlee Properties Ltd & Ors,  IEHC 45 (2009)
|Docket Number:||2005 5373 P|
|Party Name:||ACC Bank PLC, Fairlee Properties Ltd & Ors|
|Judge:||Finlay Geoghegan J.|
THE HIGH COURTCOMMERCIAL COURT2007 5373 PBETWEENACC BANK PLC.PLAINTIFFANDFAIRLEE PROPERTIES LTD., JERRY BEADES AND NIAL RINGDEFENDANTS JUDGMENT OF Ms. Justice Finlay Geoghegan delivered the 4th day of February, 2009 1. The plaintiff's claim in these proceedings arises out of three facilities granted to the first named defendant, Fairlee Properties Ltd. ("Fairlee") which were guaranteed by the second named defendant ("Mr. Beades") and the third named defendant ("Mr. Ring"). The first two facilities were commercial facilities granted in normal course. The third facility was not a normal commercial facility and granted after events which gave rise to the counterclaim in the proceedings.2. All three defendants counterclaim against the plaintiff by reason of alleged negligence, breach of duty and breach of contract of the plaintiff by its loss of title-deeds to properties at Richmond Road and Richmond Avenue, Dublin, and the plaintiff's failure to produce those deeds in June 2004.3. The plaintiff's claim against Mr. Ring and his counterclaim against the plaintiff have been settled and this judgment does not concern the counterclaim.4. At the outset of the hearing, it became apparent that there was substantial agreement in relation to the quantum of the plaintiff's claim against Fairlee and Mr. Beades and their liability on the claim, subject to a right of set off in respect of the damages claimed on the counterclaim. There were only two issues in dispute on the claim. The first was the entitlement of the plaintiff to charge interest on the three facilities from 1st July, 2006, until 17th July, 2007, being the date of commencement of proceedings. Having heard submissions and considered the agreed documentary evidence in relation to that issue, I gave a ruling on the third day of the trial in which I determined that the plaintiff was not so entitled to charge interest. The parties are in agreement that the amount of the plaintiff's claim in such circumstances is 6,278,355.24.5. The second issue is the entitlement of the plaintiff to interest pursuant to the Courts Acts on such sum against the defendants from the date of commencement of the proceedings. I indicated that I would leave over determining that issue until after I determined the counterclaim of Fairlee and Mr. Beades.Nature of counterclaim6. I propose in this judgment referring to the first and second named defendants collectively as the defendants and insofar as is necessary to refer to them individually to do so as Fairlee and Mr. Beades.7. In July 2000, the plaintiff made Facility 1 available to Fairlee. This was a sum in Irish Punts equivalent to approximately 2.6 million. The stated purpose was to enable Fairlee purchase a property at 158-163, Richmond Road, Dublin 1 ("the Richmond Road property"). The facility was secured inter alia by a first fixed mortgage/charge over the Richmond Road property and a guarantee and indemnity from Mr. Beades which in turn was supported by a first fixed charge over a site owned by him at 29-31, Richmond Avenue ("the Richmond Avenue property"). In June 2001, the plaintiff made available Facility 2 to Fairlee in a sum of approximately 330,000. Its stated purpose was to enable Fairlee purchase a property adjoining the Richmond Road property. The security included a first fixed mortgage/charge over that property and the securities already granted inter alia by Fairlee and Mr. Beades in relation to Facility 1. The plaintiff retained the title-deeds to the properties at Richmond Road and Richmond Avenue at all material times.8. Facility 1 and Facility 2 were rolled over from time to time. However, the relationship between the plaintiff and Fairlee and Mr. Beades deteriorated. The plaintiff was not willing to make further facilities available. Fairlee sought finance elsewhere and, by November 2003, Mr. Beades had informed the plaintiff that he was seeking finance from Bank of Scotland (Ireland) Ltd. ("BOSI"). The facilities to be obtained from BOSI were to be sufficient to discharge the then liabilities of Fairlee to the plaintiff. Such facilities were approved by BOSI in February 2004.9. In June 2004, the solicitors for the defendants requested from the plaintiff the title documents inter alia to the properties at Richmond Road and Richmond Avenue on accountable receipt for the purpose of preparing the security sought by BOSI in connection with the proposed facilities. The plaintiff was unable to locate the title documents and ultimately, in early July, informed the defendants that the title documents were mislaid.10. The facilities from BOSI could not be drawn down in the absence of the title documents. The plaintiff commenced a process of reconstituting the title. In July 2005, the plaintiff provided an indemnity to BOSI who in turn granted some facilities to the defendants. In April 2006, following a visit by Mr. Beades to a senior official of Rabobank, the parent company of the plaintiff, in the Netherlands, an additional interest-free facility of 3 million was granted to Fairlee by the plaintiff. Later, in the month of April 2006, the plaintiff found the title-deeds.11. The defendants counterclaim that the plaintiff was negligent in failing to produce the title documents to the properties at Richmond Road and Richmond Avenue when requested in June 2004. They make alternative claims, alleging breach of contract and breach of trust. They contend that each suffered significant loss and damage arising from the negligence, breach of duty, breach of contract and breach of trust of the plaintiff in failing to keep the title documents securely, and failing to produce them when requested in connection with the redemption of the relevant mortgages or charges given by the defendants to the plaintiff.Issues12. There are multiple facts in dispute between the plaintiff and the defendants. Many of the detailed disputes are not relevant to the issues which the Court now has to determine. The parties, with the assistance of their counsel and solicitors, during the course of the hearing reduced quite significantly the relevant issues in dispute. The issues remaining in dispute at the end of the hearing may, most conveniently, be resolved by a consideration of the following:(i) The relevant findings of fact prior to June 2004;(ii) The liability of the plaintiff for its admitted failure to produce the title documents in June 2004 in the context of the relevant findings of fact;(iii) The findings of fact relevant to the defendants' counterclaims for damages and the quantification of those claims.(iv) The liability of the plaintiff for the defendants' alleged losses.Findings of fact to July 2004 13. The following are the findings of fact which appear relevant to the issue of the plaintiff's liability, if any, for its admitted failure to produce the title documents to the properties at Richmond Road and Richmond Avenue when requested in June 2004.14. The title-deeds to Richmond Road and Richmond Avenue were given by the defendants to the plaintiff pursuant to the mortgage/charges granted as security for Facilities 1 and 2 and subsequently retained by the plaintiff as mortgagee or chargee of the properties.15. Fairlee is a property development company. At all material times, the plaintiff was aware that Fairlee proposed developing the property at Richmond Road, either by assembling the site, adding value by obtaining planning permission and reselling, or by constructing thereon and selling what was built thereon.16. Mr. Beades is a property developer in his personal capacity. At all material times the plaintiff was aware of this and that Mr. Beades proposed developing the property at Richmond Avenue. The plaintiff was aware since the end of 2003 that Mr. Beades had obtained planning permission for forty-eight apartments on a site at Richmond Avenue comprising the site owned by Mr. Beades, and an adjacent site then owned by a Mr. Frank Murphy.17. Since at least March 2003, the loan facilities of Fairlee from the plaintiff were in arrears. In October 2003, the plaintiff demanded repayment in full. At latest by this date the plaintiff had decided not to make further loans to Fairlee or Mr Beades.18. In December 2003, the plaintiff was informed that the defendants were in negotiations with BOSI which proposed granting facilities to Fairlee which would permit it repay in full to the plaintiff Facility 1 and Facility 2.19. In February 2004, the plaintiff was furnished by the defendants with a copy of a letter dated 24th February, 2004, from BOSI, approving a facility of 4,620,000 to Fairlee. That approval expressly included as a purpose the refinancing of the plaintiff's facilities to Fairlee, then estimated at 3,320,000.20. The plaintiff agreed at this time, if not earlier, to such an exit strategy for its relationship with the defendants pursuant to Facility 1 and Facility 2.21. By letter of 20th May, 2004, the plaintiff provided to the solicitors for the defendants the redemption figures for the liabilities of Fairlee to the plaintiff under Facility 1 and Facility 2.22. The approved facilities from BOSI required, inter alia as security, a first fixed charge over the property of Fairlee at Richmond Road and a first fixed charge over the property of Mr. Beades at Richmond Avenue, in support of a guarantee from Mr. Beades for the proposed facilities to Fairlee. On 4th June, 2004, the then solicitors for BOSI sought from the defendants' solicitors the title documents inter alia to the properties at Richmond Avenue and Richmond Road for the purpose of preparing the necessary securities.23. The solicitor for the defendants then sought the title documents to Richmond Road and Richmond Avenue, on accountable receipt, from the plaintiff by email dated 15th June, 2004. These were expressly requested in connection with the refinance being obtained from BOSI for the purpose inter alia of redeeming the loans of Fairlee from the plaintiff secured inter alia...
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