Brothers lose action to stop receivers selling assets

Two brothers have lost their bid to restrain receivers selling their assets after Allied Irish Banks obtained a €17.6 million judgment against them.

Mr Justice Brian McGovern rejected arguments by Paul and Gerard Dormer the €17.6 million judgment granted against them in March 2014 should be vacated due to AIB's alleged failure to properly complete a January 2014 settlement agreement under which they had agreed to judgment provided specific conditions were met by AIB.

On foot of his decision, he lifted interim injuctions restraining receivers appointed by AIB over various assets of the brothers dealing with those assets and taking steps to sell them.

In their proceedings against AIB and receivers Luke Charleton and Marcus Purcell, of Ernst & Young, the brothers, with addresses at Fortrose Park, Templeogue, and Rathdown Park, Terenure, both Dublin, alleged the January 2014 agreement required three named AIB representatives to make a “recommendation” to its area credit committee concerning credit facilities for them.

They later learned from a data protection request the representatives provided some negative information about them to the committee which made a rejection of the facilities inevitable, the brothers claimed.

The case arose after AIB in early 2014 sought summary judgment against the brothers. An agreement was reached in late January 2014 on terms including their consent to judgment on conditions including the recommendation to the area committee.

The matter was adjourned to allow implementation of the agreement and came before Mr Justice Peter Kelly in March 2014 when the brothers sought an adjournment to respond to issues in a bank affidavit. Mr Justice Kelly ruled the agreemeent was clear and the bank was entitled to judgment for €17.6 million. That judgment was not entered on consent.

The brothers in late 2014 sought to have the judgment vacated after alleging AIB breached the settlement terms and the recomendation was “nothing of the sort”.

Dismissing their application to continue the injunctions, Mr Justice McGovern said he considered the terms of the agreement were “quite clear” and required the AIB representatives to make a recommenation to the area credit committee. There was no guarantee the committee would accept the recommendation and it did not, he said.

This case was clearly designed to achieve the setting aside of the €17.6 million judgment but the law clearly stated that nothing short of fraud, pleaded with sufficient particularlty and established on the balance of probabilities, would amount to sufficient grounds to upset a previous court decision which, as was the case here, had not been appealed.

In this case, the brothers had clearly stated they were not alleging fraud and instead alleged they were induced to enter into the settlement on the basis of a mispresentation, namely the three AIB representatives would make a recomendation to the area committee when the recommendation made was “nothing of the sort”.

That issue was raised before Mr Justice Kelly who had decided against the brothers and gave judgment to the bank, he said. That March 2014 order was a final order, had not been appealed and, because there was no allegation of fraud, the judgment could not be set aside.

The brothers had failed to show a fair issue to be tried at a full hearing, which was an essential ingredient for their applicaiton to continue the injunctions restraining the receivers, he said. They had also failed to show damages would not be an adequate remedy in the event the court was wrong to lift the injunctions.