National Asset Loan Management Ltd v Tom Coyle

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: Mr. Justice Clarke
• Judgment Date: 09 April 2014
• Neutral Citation: [2014] IESC 27
• Date: 09 April 2014

[2014] IESC 27

THE SUPREME COURT

Clarke J.

Laffoy J.

Dunne J.

[Appeal No: 22/2014]

National Asset Loan Management Ltd v Coyle

Between/

National Asset Loan Management Limited

Plaintiff/Respondent

and

Tom Coyle

Defendant/Appellant

NATIONAL ASSET LOAN MANAGEMENT LTD v COYLE UNREP MCGOVERN 19.12.2013 2013/38/11234 2013 IEHC 606

AER RIANTA CPT v RYANAIR LTD 2001 4 IR 607 2002 1 ILRM 381 2001/1/68

DANSKE BANK AS T/A NATIONAL IRISH BANK v DURKAN NEW HOMES & ORS UNREP SUPREME 22.4.2010 2010/10/23922010 IESC 22

MCGRATH v O'DRISCOLL 2007 1 ILRM 203 2006/35/7529 2006 IEHC 195

Banking – Loans – Appeal against summary judgment – Contractual obligations

Facts: The defendant/appellant ("Mr. Coyle") had a banking relationship with Anglo Irish Bank plc ("Anglo Irish"). His loans were taken over by the plaintiff/respondent (which, is a subsidiary of the National Asset Management Agency, referred to as "NAMA"). NAMA issued proceedings in the High Court seeking summary judgment in respect of a claim against Mr Coyle for a liquidated sum in excess of €60 million. The High Court granted the summary judgment and Mr Coyle appealed. The issue to be decided on appeal was whether Mr Coyle had a sufficiently arguable defence to meet the low threshold required in respect of the summary judgment.

Held by Clarke J,

The appeal concerned straightforward questions of law and construction of documents. Anglo Irish had issued Mr Coyle with a facility letter outlining the reorganisation and amalgamation measures taken in relation to his accounts. This letter constituted the terms of the contract in existence between him and Anglo Irish and was also the basis of his continuing contractual obligations with NAMA after they took over the loans. Mr Coyle had accepted any pre-existing or further consolidation of accounts by signing the facility letter. The question to be determined was whether further transactions took place after the facility letter was in place, which were not in furtherance of the consolidation or transfers expressly contemplated by the facility letter itself.

Clarke J considered in this context, firstly, transactions that occurred when the relevant loans were taken over by NAMA, and, secondly, a series of transactions where interest had arisen in respect of one of the facilities. He dealt with each in turn. Clarke J said that the money loaned to Mr Coyle on specified terms and conditions remained due and owing under the terms of the facility letter. He said that nothing changed after the relevant transactions occurred. The obligations on the parties were still the same with the only difference being that the monies were owed to NAMA as opposed to Anglo Irish. In relation to the second type of transaction, Clarke J was only concerned with whether the relevant amount of interest had been properly charged from one account to another. He was satisfied that the interest transactions did not breach any legal obligations on the part of Anglo Irish or NAMA. As a result, both types of transactions were considered regular. In addition, all of the consolidation measures adopted either predated the facility letter or were expressly contemplated by it meaning Mr Coyle was precluded from seeking to reopen these issues. Clarke J was not satisfied that an arguable defence against NAMA”s claim had been made out.

Appeal dismissed.

1 Judgment of Mr. Justice Clarke delivered the 9th April, 2014.

2 Judgment delivered by Clarke J. [nem diss]

1. Introduction

3 2 1.1 A very net question about banking transactions arises on this appeal. The defendant/appellant ("Mr. Coyle") had a significant banking relationship with Anglo Irish Bank pic ("Anglo Irish"). His loans were taken over by the plaintiff/respondent (which, as it is a subsidiary of the National Asset Management Agency, I will refer to as "NAMA"). Subsequently, NAMA issued proceedings claiming both euro and pound sterling sums with a combined value in excess of €60 million. The proceedings were admitted into the Commercial List of the High Court and, having been brought by summary summons in respect of a claim for a liquidated sum, were brought in the ordinary way before the Court on a motion for summary judgment.

4 3 1.2 The High Court (McGovern J.) delivered a reserved judgment on that motion and, for the reasons therein set out, granted summary judgment in the sum of €49,856,925.50 and Stg. £10,567,723 (see National Asset Loan Management Ltd v Coyle [2013] IEHC 606). Mr. Coyle appealed to this Court. In that context, it should also be noted that Mr. Coyle had sought, but had failed to obtain, a stay on the judgment granted by McGovern J. In those circumstances, Mr. Coyle applied to this Court for a stay. At an early stage of the hearing of the stay application it became apparent that one of the major issues which would need to be determined on the stay application was as to whether Mr. Coyle really had sufficient grounds for appeal to meet the established criteria for a stay. It is, of course, well settled that one of the issues which this Court is required to assess on a stay application is as to whether, on the materials available, it can properly be said that there are significant grounds for the appeal. The absence of such grounds would weigh very heavily against the granting of any stay. However, with that in mind, it became clear that it would be an unnecessary use of scarce court resources to hear detailed submissions on the merits of the appeal solely for the purposes of deciding whether or not to grant a stay when, in reality, it would not take much longer to analyse those same grounds for the purposes of determining the substantive appeal. In those circumstances, it was arranged that the appeal would come on for hearing in early course.

5 4 1.3 It must, of course, be recalled that the judgment granted by McGovern J. in the High Court in these proceedings was on a motion for summary judgment. The issues before McGovern J. and, therefore, the issues before this Court on appeal, are not, therefore, as to whether Mr. Coyle must necessarily succeed on his defence but rather whether he has a sufficiently arguable defence to meet the undoubtedly low threshold specified in the jurisprudence in respect of the grant of summary judgment. While that jurisprudence is now very well rehearsed, it will be necessary to touch briefly on it in due course.

6 5 1.4 However, the basis on which Mr. Coyle asserted that he had an arguable defence became focused at the appeal before this Court on one point. It is necessary, in that context, to identify that argument.

2. The Defence as argued

7 2 2.1 It is not in dispute but that Mr. Coyle's loan facilities with Anglo Irish had been in difficulties from some time in 2008. He had a very large number of bank accounts. In 2009, a number of rearrangements occurred in respect of those bank accounts which had the effect of significantly narrowing the total number. In October 2008, Mr. Coyle had approximately 16 separate loan accounts with Anglo Irish. By the end of that year, it appears that this had grown to 21 different accounts. On the 23rd January, 2009, 10 of these separate loan accounts were amalgamated into a single new account. This appears to have been done through the debiting of money from the new account and the transfer of those monies to the then existing accounts so as to leave them with a zero balance. Once a zero balance was thus reached, the old accounts were then closed. A similar process was carried out at about the same time which brought three other loans together in a separate account. These transactions were not expressly authorised by Mr. Coyle at any point. It is said that these changes were the product of the implementation by Anglo Irish of a new banking system known as T24. Further similar activity occurred throughout 2009 and 2010, resulting ultimately in six streamlined accounts.

8 3 2.2 However, on the 20th July 2010, a facility letter was issued by Anglo Irish to Mr. Coyle which specified six facilities lettered "A to F". It is worth quoting the facilities and their respective purposes in full. The details of each facility are set out in section 1. of the letter:

Facility A:	The maximum amount of GBP £8,004,000 (Eight Million and Four Thousand Pounds Sterling) with a current balance of £7,965,596, together with interest accrued and due thereon.	Palace Street
Facility B:	The maximum amount of GBP £1,028,000 (One Million and Twenty Eight Thousand Pounds Sterling) with a current balance of £1,262,863, together with interest accrued and due thereon. Please note this account is currently in excess of the approved limit of £1,028,000 and that the excess referred to above is not ratified by the Bank.	Palace Street Interest A/c
Facility C:	The maximum amount of €29,814,000 (Twenty Nine Million, Eight Hundred and Fourteen Thousand Euro) with a current balance of €30,654,404, together with interest accrued and due thereon. Please note this account is currently in excess of the approved limit of €29,814,000 and that the excess referred to	Investment Properties

	above is not ratified by the Bank.
Facility D:	The maximum amount of €1,149,000 (One Million, One Hundred and Forty Nine Thousand Euro) with a current balance of €1,611,601, together with interest accrued and due thereon. Please note this account is currently in excess of the approved limit of €1,149,000 and that the excess referred to above is not ratified by the Bank.	Investment Prop Interest A/c
Facility E:	The maximum amount of €10,680,000 (Ten Million, Six Hundred and Eighty Thousand Euro) with a current balance of €9,608,872, together with interest accrued and due thereon.	54 Apart Suites & Kasterlee

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