Leona Flynn v National Asset Loan Management Ltd and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice Cregan |
| Judgment Date | 25 July 2014 |
| Neutral Citation | [2014] IEHC 408 |
| Court | High Court |
| Date | 25 July 2014 |
BETWEEN
AND
AND
AND
[2014] IEHC 408
THE HIGH COURT
Commercial property – Property interest – Debt – Plaintiff seeking declaration that she transferred her interest in property – Whether plaintiff”s transfer of interest was invalid and unenforceable
Facts: The plaintiff, Mrs Flynn, is married to Mr Flynn who purchased and developed the commercial property Belfield Office Park (Belfield). Belfield was purchased by Maldonado Ltd, purchasing money being provided by Anglo Irish Bank. In 1996, Maldonado Ltd entered into a deed of trust with investors, agreeing to hold Belfield on trust for beneficiaries including the Flynn family. In 2002 the Bank offered new loan facilities and entered into a loan facility letter with all investors. The Bank loans were transferred to the defendant, National Asset Loan Management Ltd (NALM, formed by the National Asset Management Agency (NAMA)) in 2010. NAMA then claimed that all members of the Flynn family were indebted in respect of the Bank loans. Mrs. Flynn took the view that she was not indebted, did not provide a statement of affairs, and was considered an uncooperative debtor by NAMA who then called in the loans of each family member. Mrs. Flynn sought declarations from the High Court: that she transferred her interest in Belfield to her husband pursuant to a 2008 contract and Deed of Assurance and that since that time she has had no right, title or interest in the said property; That as a result of this transfer, she has also transferred her debt and, therefore, that she has no liability to the Bank or NAMA or NALM in respect of such loans; that she transferred her interest with the full knowledge and consent of Mr. Drumm, then Chief Executive Officer of the Bank, and that as a result the Bank (and therefore NAMA/NALM) are estopped from denying the transfer to her husband. NALM claims: that it was a stranger to any agreement between Mrs and Mr Flynn; that the purported transfer by Mrs Flynn of her interest and debt was invalid and unenforceable because the prior written consent of the Bank was required; that the consent of Mr Drumm was insufficient; that, there was no representation by Mr Drumm or reliance on such by the Flynns and, therefore, no issue of estoppel or acquiescence arises; That, if the plaintiff sought to rely on any representation of Mr Drumm, then by virtue of s. 101 of the NAMA Act 2009 such an agreement or representation was not binding on NAMA. NALM filed a counterclaim against the Flynn family claiming that they are indebted, that the loan is in default and that NALM is entitled to judgment. Mrs Flynn pleaded that s. 101 is unconstitutional. The Flynn family claim: that the counterclaim is premature; that it is an abuse of process because it is brought for an ulterior purpose, namely to force Mrs Flynn to provide a statement of affairs; that the facility letter relied on does not represent the entirety of the terms agreed between the Flynns and the Bank; that the loans are not in default; that the Flynn loans have been called in by NAMA/NALM for an improper purpose; that NAMA/NALM have unlawfully discriminated against the Flynns, are in breach of their statutory duty, are guilty of misfeasance of public office and deceitful overcharging of interest; That NAMA/NALM have failed to conduct itself towards the Flynns in accordance with the basic principles of fairness and natural and constitutional justice.
Held by Cregan J that, having considered all the evidence and the legal submissions, Mrs Flynn”s transfer is not binding on the Bank/NAMA/NALM for the following reasons: it is clear from the terms of the loan agreement that the prior written consent of the bank was required; the evidence is that Mr Drumm consented to the proposal put forward by Mr Flynn to the transfer of Mrs Flynn”s interest, however, his agreement to that proposal was at most either an agreement to agree, or an outline agreement in principle, with nothing to suggest that Mr Drumm intended to waive the whole suite of contractual and security arrangements put in place the Bank over Belfield; the loan facility from was advanced to the Flynn family jointly. Cregan J held the Flynns” arguments that NAMA engaged in an abuse of process, was guilty of misfeasance, and deliberately overcharged were unsustainable. He held that there was no event of default on the loan and that NALM gave misleading reasons for calling in the loans. He held that if NALM were to call in the Flynn loan without any other objective differentiating factor between the Flynns and the other investor groups, this would be a breach of its statutory duty and of its code.
Cregan J held that the plaintiff”s transfer of interest to her husband is not binding.
Judgment approved.
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JUDGMENT of Mr. Justice Cregan delivered on the 25th day of July, 2014
1. The plaintiff in this case, Mrs. Leona Flynn, is seeking various declarations from the court in respect of a commercial property known as Belfield Office Park. In her statement of claim Mrs. Flynn seeks the following declarations:-
1. That she has transferred her interest in Belfield Office Park to her husband, Mr. John Flynn, pursuant to a contract dated 1 st January, 2008, and a Deed of Assurance dated 8 thJanuary, 2008 and that since that time she has had no right, title or interest in the said property.
2. That as a result of this transfer of her interest in the property, she has also transferred her debt of €21.9m to her husband (in respect of loans advanced to her and other members of the Flynn family in respect of that property, by Anglo Irish Bank (now IBRC), which loans have now been acquired by NAMA) and, therefore, that she has no liability to Anglo Irish Bank or NAMA or NALM in respect of such loans.
3. That she transferred her interest in this property and her debt to Anglo Irish Bank to her husband with the full knowledge and consent of David Drumm, then Chief Executive Officer of Anglo Irish Bank, and that as a result of this consent Anglo Irish Bank, (and now therefore NAMA/NALM), are estopped from denying the transfer to her husband of her interest in the property and the associated debt.
4. That, as a result, she does not owe any monies to Anglo Irish Bank or to NAMA/NALM and as such that she is not in NAMA parlance "an obligor" of NAMA/NALM.
5. That,...
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