ACC Loan Management DAC v McCool
| Jurisdiction | Ireland |
| Judge | Ms. Justice Reynolds |
| Judgment Date | 16 November 2017 |
| Neutral Citation | [2017] IEHC 704 |
| Docket Number | [2015 No. 1715 S.] |
| Court | High Court |
| Date | 16 November 2017 |
[2017] IEHC 704
[2015 No. 1715 S.]
THE HIGH COURT
Banking & Finance – Non-payment of mortgage loan – Bona fide defence – Sale of property – Appointment of receiver
Facts: The plaintiff sought an order for summary judgment against the defendant on the basis of non-payment of loan advanced by the plaintiff to the defendant. The defendant sought leave to defend the present proceedings on the basis that he had an established arguable defence. The defendant submitted that he did not read the relevant facility letters and never had the benefit of availing legal advice. The defendant also objected to the manner of assessment made by the plaintiff in relation to the outstanding amount.
Ms. Justice Reynolds granted an order for summary judgment to the plaintiff. The Court held that the defendant had failed to raise a bona fide defence in the present proceedings. The Court held that the defendant was at fault for signing the facility letters without reading them and he must therefore, bear the ill-consequences. The Court noted that there was no evidence to prove that the defendant had objected to the appointment of receiver over the disputed property at the relevant time period and thus, he was precluded from raising those issues at present.
In these proceedings, the plaintiff seeks summary judgment against the defendant in the sum of €228,005.36 arising out of a loan agreement entered into between the parties on the 30th May, 2006. Under the terms of the agreement, the plaintiff agreed to advance to the defendant a loan comprising a principal sum of €630,000.00 for a period of two years.
By facility letter dated 30th May, 2006 the defendant was offered a loan facility in the amount of €630,000.00 repayable for a term of two years from the date of draw down (which occurred on 15th August, 2006), together with interest thereon.
The purpose of the loan facility was to re-structure existing loan facilities with the plaintiff and the security provided was an extension of the plaintiff's first legal mortgage and charge over properties located at 49 and 51 Shanard Road, Santry, Dublin 9.
By letters of variation dated 21st August, 2008, 6th October, 2008 and 14th July, 2009, the term of the loan was extended until 14th July, 2010.
The defendant defaulted on his repayment obligations and by letter of demand dated 23rd September, 2013, the plaintiff demanded the sum of €872,722.98.
A receiver was appointed on 21st September, 2013 over the two properties secured under the loan facility. That receiver was subsequently replaced by a further receiver on the 20th December, 2013.
Whilst the properties were under the Receiver's control, he collected rent from tenants occupying them and those monies were applied to the defendant's account in 2014.
The Receiver sold the properties and the proceeds of sale were also applied to the defendant's account in 2015.
No payment has been made by the defendant since July 2015 and the plaintiff claims that the sum of €228,005.36, together with continuing interest thereon, remains due and owing.
The defendant does not dispute that the monies were drawn down in the sense that the facility was a re-financing of previous facilities and further accepts that the monies have not been repaid in full.
The defendant seeks liberty to defend the proceedings and argues that he has established arguable grounds of defence in respect of:-
(a) the proper construction of the facility letter of May, 2006 in circumstances where the defendant alleges that the loan term is erroneously described as two years as opposed to twenty years;
(b) the inclusion of surcharge interest to the account and further the alleged miscalculation of the sum due and owing;
(c) the alleged unwarranted appointment of the Receiver over the properties and the wrongful actions of the Receiver.
The relevant legal principles in an application of this nature are well settled and are not in dispute. In order to succeed in defending a claim for summary judgment, a defendant must satisfy the court that he has a fair or reasonable probability of having a real or bona fide defence, as set out by the Supreme Court in Aer Rianta Cpt. v. Ryanair Ltd. [2001] 4 I.R. 607 and in Harrisrange Ltd. v. Duncan [2003] 4 I.R. 1.
The first issue for consideration is the correct construction of the terms upon which the defendant's facilities were refinanced in May 2006. The defendant's case is that this was erroneously set up as a short term investment loan by the plaintiff in circumstances were the defendant posits that his requirement was for a long term commercial loan facility.
However, it is clear from the terms of the facility letter that the purpose of the facility was to restructure two existing facilities which the defendant had with the plaintiff...
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ACC Loan Management Designated Activity Company v Eugene McCool
...judgment to the respondent, ACC Loan Management Designated Activity Company (the bank), against the appellant in the sum of €228,005.36: [2017] IEHC 704. The appellant claimed that he had a number of arguable defences, which the trial judge rejected in error, and that the matter ought to ha......