National Asset Loan Management Ltd v Michael Barker and Others

• Jurisdiction: Ireland
• Judge: Mr Justice Peter Charleton
• Judgment Date: 10 April 2014
• Neutral Citation: [2014] IEHC 216
• Court: High Court
• Docket Number: Record Number 4426S/2013
• Date: 10 April 2014

National Asset Loan Management Ltd v Barker & Ors

Commercial

Between:

National Asset Loan Management Ltd

Plaintiff

and

Michael Barker, Conor O'Brien, Joseph Hannon, John Lenihan and Martin Fitzpatrick

Defendants

[2014] IEHC 216

Record Number 4426S/2013

The High Court

Commercial Dispute - Loans - State Banks - Summary Judgement - Facility Letter - Business Venture - Defence - Letter of sanction - Right to demand repayment - Default

Facts:The plaintiff was National Asset Loan Management Ltd(NALML) and the defendant was an architect. The plaintiff is the national agency which took over non-performing loans from the State's banks and the defendant was involved in a property investment transaction. Allied Irish Banks made the loan to the defendant to fund the investment. The plaintiff sought summary judgement against the defendant in the sum of €1,249,366.16. Mr Justice Peter Charleton discussed the practice and procedure involved in a summary judgement, referring to the Rules of the Superior Courts 1986 and to the case of Danske Bank v. Durkan New Homes Ltd (2010). Mr Justice Peter Charleton referred to the facility letter which offered an overdraft of €30,000 and a loan account of €957,000 for a business venture and he stated all loans had to be repaid, unless the contract madethe loan dependenton the success of the business venture. Mr Justice Peter Charleton stated the issue of repayment wasreferred to in the letter, as it specified there should be a review and that interest should be applicable. In defence to the application, it was submitted the terms and conditions of the lending were not notified by the bank to the defendant. Mr Justice Peter Charleton stated it depended on the circumstances as to whether general terms and conditions would be incorporated into a contract which already contained detailed conditions. Mr Justice Peter Charleton referred to a memo to the credit committee of the bank, which he stated was a business analysis and contained no defence. It was questioned whether the bank was a business partnerin the venture, due its” money depending on the success of the venture. Mr Justice Peter Charleton stated on the basis of the letter of sanction there was no support for same. Mr Justice Peter Charleton referred to clause 3.1 which stated;loan facilities were repayable on demand, in normal circumstances the bank expected the loan would be available as per the letter of sanction and that the bank had a right to demand repayment if default occurred, such as the expiry of a term loan.

Held by Mr Justice Peter Charleton there was default of repayment of interest and principle and that a demand had been properly made.

Summary judgement entered in the sum of €1,249,366.16

RSC O.37 r7

DANSKE BANK T/A NATIONAL IRISH BANK v DURKAN NEW HOMES & ORS UNREP SUPREME 22.4.2010 2010/10/2392 2010 IESC 22

ALLIED IRISH BANKS PLC v GALVIN DEVELOPMENTS (KILLARNEY) LTD & ORS UNREP FINLAY GEOGHEGAN 29.7.2011 2011/3/612 2011 IEHC 314

1 Mr Justice Peter Charleton delivered on the 10th day of April 2014

2 The plaintiff is the national agency which has taken over non-performing loans from the State's banks. The defendant Michael Barker is an architect who, as regards this case, was involved in a property investment transaction. The loan to fund this investment was made to him by Allied Irish Banks pl and there is no question but the loan was property transferred to the plaintiff subsequent to it running into difficulties.

3 The plaintiff seeks summary judgement against Michael Barker for the sum of €1,249,366.16. The principles upon which summary judgement will be given to a plaintiff have been often rehearsed in prior decisions of the High Court and Supreme Court. In brief, since summary judgement involves a decree being entered on foot of affidavits exhibiting contracts and scrutinising any replying affidavits to see if there is a defence, this jurisdiction is an exception to the constitutionally mandated requirement that courts should hear witnesses, should allow cross-examination and should listen to any submissions made at the end of such a process. Summary judgement, however, is a means whereby liquidated sums can be recovered in short form where there is proof of the existence of a debt and where there is no defence disclosed by the defendant. It has to be clear indeed that the defendant has no defence. A defendant does not have to establish a defence that would probably succeed in order to be permitted a plenary hearing. All the defendant need do is to show factual material which if it is accepted could amount to an answer to the claim. If a defence in law is mounted on facts which are agreed, or more or less agreed, then the High Court hearing this kind of application is entitled to decide the case straight away but is also entitled, as a matter of discretion, to await the more elaborate argument that is attendant upon a plenary hearing. A bald assertion of a fact in answer to a claim may not be enough when it is not backed up by any independent material, most especially if it is highly unlikely. Every such case, however, must be judged on its own merits. If an assertion of fact is made which is in the teeth of a written contract, then a particular scrutiny will be made of that fact and how it is alleged to fit within the matrix that amounted to the contract between the plaintiff and the defendant. Where a case is based on documents, a defendant must be in a position to show that the defence which they seek to make is not totally undermined by the correspondence between the parties.

4 The matter is based on the Rules of the Superior Courts 1986. Order 37 rule 7 provides:-

5 Upon the hearing of any such motion by the Court, the Court may give judgement for the relief to which the plaintiff may appear to be entitled or may dismiss the action or may adjourn the case for plenary hearing as if the proceedings had been originated by plenary summons, with such directions as to pleadings or discovery or settlement of issues or otherwise as may be appropriate, and generally may make such order for determination of the questions in issue in the action as may seem just.

6 Denham J. summarised the relevant law on entering a summary judgment in Danske Bank v. Durkan New Homes Ltd. (unreported,...