National Asset Management DAC v Breslin

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian J. McGovern
• Judgment Date: 26 May 2017
• Neutral Citation: [2017] IEHC 350
• Court: High Court
• Docket Number: [2015 No. 404 S.]
• Date: 26 May 2017

BETWEEN

NATIONAL ASSET LOAN MANAGEMENT DAC

PLAINTIFF

AND

MICHAEL BRESLIN

DEFENDANT

[2017] IEHC 350

McGovern J.

[2015 No. 404 S.]

THE HIGH COURT

Banking & Finance – The NAMA Act 2009 – Non-payment of loan – Execution of deed of guarantee – Summary judgment – Bona fide defence

Facts: The plaintiff sought an order for summary judgment on foot of the execution of deed of guarantee whereby the defendant expressly agreed to pay the plaintiff all the monies due unconditionally. The defendant took the defence that he had obtained a full release and discharge from any obligations created by the guarantee or indemnity arising out of a meeting in the office of the plaintiff.

Mr. Justice Brian J. McGovern granted an order for summary judgment. The Court found that the loan against which the defendant had obtained the full release pertained to a property not related to the plaintiff. The Court held that the defendant had not presented any arguable defence.

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 26th day of May, 2017.

1 The plaintiff (‘NALM’) seeks summary judgment against the defendant in the sum of STG£9,048,360.41 with interest. The monies are claimed on foot of a guarantee in writing dated 2008 whereby the defendant expressly agreed as principal obligor, unconditionally and irrevocably, to pay and guarantee payment on written demand of all monies whatsoever, whether principle, interest or otherwise, which were then or, at any later date became, due and owing to Anglo Irish Bank Corporation plc. (‘Anglo’) by Car Park Solutions Ltd. (‘the company’).

2 In August and September 2007, Anglo made available two loan facilities to the company in the combined maximum amount of STG£21,400,000. These were short term loan facilities. The first facility (‘facility 1’) was made available on 31st August, 2007, in the maximum amount of STG£19,400,000 and was repayable on or before 31st March, 2008. The second facility (‘facility 2’) was made available on 13th September, 2007, in the maximum amount of STG£2,000,000 and was repayable within one month from drawdown (which was to occur in full by 30th September, 2007).

3 The facilities were not repaid by the due date. Following negotiations between Anglo and the company on 25th September, 2008, Anglo agreed to amend the terms of the facilities and certain conditions of the loan. NALM claims that, in consideration for extending the repayment date in respect of facility 1 from 31st March, 2008, to 31st March, 2009, Anglo required additional security in the form of ‘composite joint and several guarantees of Barry Breslin, Francis Smith and Michael Breslin’. Similarly, the plaintiff claims that, in consideration for extending the repayment date in respect of facility 2 from one month from drawdown to 31st March, 2009, Anglo required additional security in the form of ‘composite joint and several guarantees of Barry Breslin, Francis Smith and Michael Breslin’.

4 On 5th November, 2008, the defendant signed letters dated 25th September, 2008, in which he:-

(i) acknowledged that he had read the said letters and Anglo's general conditions (which he acknowledged formed part of the agreement);

(ii) confirmed that he fully understood the terms of the loan agreement;

(iii) acknowledged that he was guaranteeing the performance by the company of its obligations under the loan agreement to Anglo; and,

(iv) acknowledged that he had been given due opportunity to take independent legal advice on the effects of the loan agreement.

5 On an unspecified date in or around October 2008, the defendant executed a guarantee and indemnity (‘the guarantee and indemnity’) referred to at para. 1 above.

6 The facilities were not repaid by the extended repayment date. On 18th August, 2009, and again on 26th August, 2009, Anglo demanded repayment from the company of the monies then due and owing under the facility. While some assets were realised to reduce the company's indebtedness, a significant sum remained unpaid under the facilities. That is the sum claimed in these proceedings.

7 On 13th December, 2010, the facilities and related security (including the guarantee and indemnity) were acquired by NALM pursuant to the provisions of the National Asset Management Agency Act 2009 (‘the NAMA Act’).

8 On 18th February, 2015, NALM wrote to the defendant demanding repayment of the sum of STG£9,048,360.01 under the guarantee and indemnity, that being the sum then due and owing under the facilities. It is not in dispute that the defendant has not discharged that sum or any part thereof.

The Test on an Application for Summary Judgment

9 There was no disagreement between the parties as to the test applicable for summary judgment. These principles are to be found in a number of decisions which were drawn together in the judgment of McKechnie J. in Harrisrange Ltd. v. Duncan [2003] 4 I.R. 1 at pp. 7 – 8. I do not propose to set out those principles as they are well known.

10 In McGrath v. O'Driscoll [2007] 1 I.L.R.M. 203 at p. 210, Clarke J. stated:-

‘So far as factual issues are concerned it is clear, therefore, that a mere assertion of a defence is insufficient but any evidence of fact which would, if true, arguably give rise to a defence will, in the ordinary way, be sufficient to require that leave to defend be given so that that issue of fact can be resolved.

So far as questions of law or construction are concerned the court can, on a motion for summary judgment, resolve such questions (including, where appropriate, questions of the construction of documents), but should only do so where the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment.’

11 In this case, the defendant raises a number of defences to the claim for summary judgment (which are set out at para 16-20 below) and argues that the court should remit the matter to plenary hearing.

The NAMA Act 2009

12 In view of the issues raised by the defendant, there are a number of specific provisions of the NAMA Act which are relevant to this application.

13 Section 101 of the NAMA Act provides as follows:-

‘(1) If in relation to a bank asset that NAMA or a NAMA group entity has acquired—

(a) it is alleged that a representation was made to, a consent was given to, an undertaking was given to, or any other obligation was undertaken (by agreement or otherwise) in favour of, the debtor or another person by the participating institution from which the bank asset was acquired or by some person acting or claiming to act on its behalf,

(b) no such representation, consent, undertaking or obligation was disclosed to NAMA in writing, before the service on the participating institution of the relevant acquisition schedule,

(c) the records of the participating institution do not contain a note or memorandum in writing of the terms of any such representation, consent, undertaking or obligation or do not contain a record of any consideration paid in relation to any such representation, undertaking or obligation, and

(d) the representation, consent, undertaking or obligation, if made, given or undertaken, would affect the creditor's rights in relation to the bank asset,

then that representation, consent, undertaking or obligation—

(i) is not enforceable, and cannot be relied on, by the debtor or any other person against NAMA or the NAMA group entity,

(ii) is enforceable, and can be relied on, by the debtor or any other person, if at all, only against a person other than NAMA or a NAMA group entity, and

(iii) is not enforceable, and cannot be relied on, by NAMA or the NAMA group entity against the debtor.

(2) A claim based on a representation, consent, undertaking or obligation referred to in subsection (1) gives rise only to a remedy in damages or other relief that does not in any way affect the bank asset, its acquisition, or the interest of NAMA or the NAMA group entity or (for the avoidance of doubt) any property the subject of any security that is part of such a bank asset.

(3) The Court shall not make an order under section 182 in relation to a claim to enforce a representation, undertaking or obligation referred to in subsection (1).’

14 Section 108 of the NAMA Act provides as follows:-

‘(1) NAMA or a NAMA group entity may certify under its seal or common seal, as the case requires, that NAMA or the NAMA group entity holds a bank asset specified in the certificate.

(2) A document purporting to be a certificate issued in accordance with subsection (1)—

(a) shall be taken to be such a certificate, and to have been certified under the seal of NAMA or the NAMA group entity, as the case may be, unless the contrary is proved, and

(b) is conclusive as to the matters set out in it.’

15 Section 190 of the NAMA Act provides as follows:-

‘In any proceedings for the recovery by NAMA or a NAMA group entity of money, a certificate in writing under the seal of NAMA or the common seal of the NAMA group entity that a specified sum of money was owing to NAMA or the NAMA group entity at the date of the certificate by a specified person on a specified account is, at any time within one month after the date of the certificate, evidence that the sum specified in the certificate is and remains owing to NAMA or the NAMA group entity by the person and on the account specified in the certificate.’

Grounds of Defence Advanced by Defendant

16 The defendant advances a number of grounds of defence which he says are sufficient to warrant the action being remitted for plenary hearing. The first ground is based on an allegation that, at a meeting on 24th October, 2008, Mr. Fergal Feeney of Anglo expressly assured the defendant that, if he executed the...