Judge expresses sympathy in judgment for €47m against developers

A High Court judge said one “cannot but feel” for people who “got lucky during the Celtic Tiger era” and lost it all in the crash. They were “demi-consumers” or people who sat just outside protection given under consumer credit legislation.

Mr Justice Max Barrett was speaking during a case where an investment fund secured judgment for €47 million against property developers Michael and Kevin Corbett, plus an additional €10 million judgment against Michael Corbett, over unpaid loans.

A Dublin-registered fund, LSREF III Achill Investments Ltd, sought judgment against Michael Corbett, Annaville, Western Road, Cork, and Kevin Corbett of Grenagh, Cork, arising from loans acquired by the fund from Ulster Bank late last year.

The Corbetts opposed summary judgment and argued they had defences to the claim entitling them to a full hearing. The judge disagreed and found, as a matter of law, there was no basis for sending the matter to plenary hearing and he must grant summary judgment.

‘Unhappy position’

On “a human level, one cannot but feel” for the Corbetts and the “unhappy position they find themselves in”, he said. They were unable to repay vast sums borrowed and had lost much, or all, to their creditors.

However, this was “one of those cases in which the court is coerced by our present law into granting summary judgment sought”.

Judgment was sought against both men over sums loaned to them in June 2011 by Ulster Bank as part of an agreement to renew existing loan facilities. LSREF said the facilities were repayable on demand and were for purposes including to finance an office building and student accommodation at Copley Street, Cork; 88 student homes at Bachelor’s Quay, Cork; and several commercial and residential properties in Cork city. It was argued €47.2 million was owed on them.

Judgment for an additional €10.54 million was sought against Michael Corbett over a loan from Ulster Bank in October 2010 to continue existing facilities. Demands for repayment were issued last March.

Meetings between the fund and the Corbetts failed to produce an agreement.

Mr Justice Barrett said there is “a class of vulnerable people” who fall outside the definition of consumer in the Consumer Credit Act and associated legislation.

These persons continue to present before the court in significant numbers often without legal representation and need “substantial legal protection”, he said. They had “got lucky during the Celtic Tiger era” and lost it all in the subsequent crash.

The question whether such people ought to be given additional protection is for lawmakers to decide and the court expressed no opinion in this regard, he said.