Promontoria (Gem) dac v Murphy

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 30 May 2019
• Neutral Citation: [2019] IEHC 395
• Court: High Court
• Docket Number: [2019 No. 4 S.]
• Date: 30 May 2019

BETWEEN

PROMONTORIA (GEM) DAC

PLAINTIFF

AND

STEPHEN MURPHY

AND

MARGARET MURPHY

DEFENDANTS

[2019] IEHC 395

[2019 No. 4 S.]

THE HIGH COURT

COMMERCIAL

Summary judgment – Bona fide defence – Want of prosecution – Plaintiff seeking summary judgment against the defendants – Whether the defendants had a fair or reasonable probability of having a bona fide defence to the summary proceedings

Facts: The plaintiff, Promontoria (Gem) dac, applied to the High Court seeking summary judgment against the defendants, the Murphys, of Bagenalstown, County Carlow. The claim was against Mr Murphy for the sum of €48,319,840.92 and against Mrs Murphy for the sum of €17,207,314.73. The borrowings were extended by Bank of Ireland to the Murphys in respect of property acquisition and property development in Ireland. Mr Murphy raised a number of defences to the summary judgment. He also brought a motion to strike out the summary proceedings on the basis that they failed to disclose any cause of action and for want of prosecution.

Held by Twomey J that the Murphys did not have a fair or reasonable probability of having a bona fide defence to the summary proceedings. Twomey J could see no basis for the proceedings being struck out, holding that it was patently clear that there had been no delay on the part of Promontoria.

Twomey J held that he would grant summary judgment in the sum claimed.

Application granted.

JUDGMENT of Mr. Justice Twomey delivered on the 30th day of May, 2019

Summary – application for summary judgment for €65 million

1 This is a summary judgment application by the plaintiff (‘Promontoria’) against the defendants (‘the Murphys’) of Bagenalstown, County Carlow.

2 The defendants are a married couple and while the second named defendant (‘Mrs. Murphy’) did not appear at the hearing, submissions made by the first named defendant, (‘Mr. Murphy’), were treated by Mr. Murphy and by Promontoria as being made also on behalf of Mrs. Murphy.

3 The claim is against Mr. Murphy for the sum of €48,319,840.92 and against Mrs. Murphy for the sum of €17,207,314.73. The borrowings were extended by Bank of Ireland to the Murphys in respect of property acquisition and property development in Ireland.

4 The initial loans were extended to the Murphys pursuant to 18 Facility Letters between October 2002 and May 2010 (the ‘Loan Facilities’). These Loan Facilities were subsequently acquired by National Asset Loan Management DAC (‘NALM’) under sections 87 and 90 of the National Asset Management Agency Act, 2009.

5 By a Deed of Settlement dated 24th of October 2016 (the ‘Settlement Agreement’) between NALM and the Murphys, the Murphys agreed to pay certain monies to NALM and NALM agreed, subject to compliance with those obligations, to release its charge over the Murphys” family home and to limit its recourse against the Murphys. In particular, this Settlement Agreement provided that in the event of any breach by the Murphys of the terms of the Settlement Agreement, all sums due and owing under the Loan Facilities would become immediately due and payable.

6 By a Deed of Transfer dated 27th of January, 2017 (‘Deed of Transfer’) NALM transferred to Promontoria its right, title and interest in the Loan Facilities along with all the security and rights connected therewith, including the Settlement Agreement.

7 As a result of the breach by the Murphys of the Settlement Agreement, which is not disputed in these proceedings, letters of demand dated 29th of November, 2018 were issued by Promontoria and arising from the failure of the Murphys to meet those demands these proceedings issued.

8 Mr. Murphy, who was not legally represented at the hearing, raised a number of defences to the summary judgment. He also brought a motion to strike out the summary proceedings on the basis that they failed to disclose any cause of action and for want of prosecution. The defences raised by the Murphys will be considered first.

Defence that evidence of Mr. Gracey is inadmissible

9 Mr. Murphy's first defence is that the affidavit sworn by Mr. Alastair Gracey, on behalf of Promontoria, outlining the details of the Loan Facilities, the alleged breach of the terms of the Settlement Agreement and the amounts due and owing, is inadmissible as Mr. Gracey is not an employee of Promontoria.

10 Mr. Gracey is an employee of Link ASI Limited, a loan service company. He has averred that he is a senior asset manager of that company which acts as a service provider for Promontoria, and that Link ASI Limited maintains the loan accounts for the Murphys” Loan Facilities. The services provided include the updating of data, the application of payments to those accounts, the processing of loan redemptions and the general day-to-day administration and management of those Loan Facilities.

11 In addition, Mr. Donal O'Sullivan, a director of Promontoria swore an affidavit to the effect that Link ASI Limited was appointed by Promontoria as a service provider in respect of the Murphys” Loan Facilities and that Link ASI Limited has responsibility for the day-to-day administration and management of the Murphys” Loan Facilities.

12 It is also relevant to note that Mr. Murphy in his affidavit in which he refers to the Settlement Agreement admitted many of the issues covered by the affidavit of Mr. Gracey. For example, Mr. Murphy avers in his affidavit of 29th March, 2019 that Promontoria acquired the Loan Facilities and that the Murphys entered the Settlement Agreement with NALM. Under the terms of the Settlement Agreement, the Murphys agreed that they had been granted the Loan Facilities, that €69,433,943 was outstanding from them and that events of default had occurred under those Loan Facilities.

13 Order 37, rule 1 of the RSC envisages that in summary proceedings not just the plaintiff, but also ‘ any other person who can swear positively to the facts’ supporting the summary judgment application, may swear an affidavit in support of such a claim. In addition, in light of caselaw such as Ulster Bank Ireland Ltd v. O'Brien [2015] 2 I.R. 656 and, in particular, Promontoria (Arrow) Limited v. Burke [2018] IEHC 773 (where the evidence of an employee of a loan service company was held to be admissible where that employee had access to the books and records of Promontoria), it seems clear to this Court that, in the circumstances of this case, the evidence of Mr. Alastair Gracey is admissible in these proceedings. The fact that he is not an employee of Promontoria does not mean that his evidence is inadmissible, since he is a person who can swear positively as to the relevant facts necessary for a summary judgment application, particularly in light of the averments by him and on behalf of Promontoria regarding his role in the day-to-day management of the Loan Facilities on behalf of Promontoria and the admissions of Mr. Murphy on affidavit regarding the evidence to which Mr. Gracey is deposing. Accordingly, this defence is not sufficient for this matter to be sent to plenary hearing.

Affidavit does not state if deponent is a man or a woman

14 In what was not his strongest argument, Mr. Murphy...