Three sued over loan to buy BoI headquarters for €180m

THREE MEN are being sued for allegedly failing to pay about €1.1 million in interest on a loan they got along with a number of others to buy the Bank of Ireland headquarters on Baggot Street, Dublin, for €180 million.

Bank of Scotland Ireland (BoSI) claims Patrick Shovlin, Turnberry, Kerrymount Avenue, Foxrock, Dublin; Patrick Fitzpatrick, Dargle Lodge, Cookstown, Enniskerry, Co Wicklow; and Anthony Fitzpatrick, Trethorpe, Brennanstown Road, Cabinteely, Dublin, have defaulted on the interest payments on the loan, which was given to them in August 2006.

Mr Shovlin owes €555,559, while the two others owe €277,779 each, the bank claims.

Two others, Ronan Ó Caoimh, Glencarrig House, Delgany, Co Wicklow, and Peter Lavelle, Sorrento, Nerrano Road, Dalkey, Co Dublin, who were also involved in the loan deal, have discharged their interest payments of €184,413 and €35,175 respectively.

Proceedings against these two were struck out at BoSI’s request yesterday in the Commercial Court. A number of other people were involved in the loan agreement, but they had paid up before court proceedings were initiated.

Mr Justice Peter Kelly rejected an application from Martin Hayden, counsel for the other three men, that the case not be entered into the Commercial Court because the amounts being sought against each individual did not come within the minimum €1 million threshold for entry of cases into the Commercial Court.

Mr Hayden argued that the defendants were severally liable, rather than jointly liable, under the loan agreement and they should not be amalgamated for the purpose of getting the case into the Commercial Court, where cases are dealt with quicker than in the normal High Court.

This was not a case about the €180 million loan for the property but was fundamentally a debt-collection claim for interest due on that loan, Mr Hayden said.

Mr Justice Kelly said the rules for entry into the Commercial Court did not require that a case needed to be against each defendant and he had discretion to enter any case, having regard to its commercial aspects as well as having regard to saving the public purse in terms of court time and the question of minimising legal costs.

In those circumstances, he was admitting the case to his court and adjourned the matter to January 15th to allow the defendants to supply affidavits to state whether they have a defence to the claim.

Failure to provide a defence would result in summary judgment against them, he said.

In an affidavit from Avril Deasy, senior lending manager with BoSI, she said that as of November 12th last, all borrowers who were involved in the loan were in breach of their agreement to pay a total in interest of €1.6 million. A number of borrowers paid what was due, bringing the sum owed down to €1.3 million. When proceedings were initiated against the remaining five, Mr Ó Caoimh and Mr Lavelle discharged their debts.