Developer claims signature on loan guarantee was not his

A PROPERTY developer being pursued by Bank of Scotland Ireland for €8.4 million over his alleged guarantees of loans to his building company has claimed a signature in his name on one of those guarantees is not his.

Charles Fergus has also alleged multiple defects in the 17 guarantees related to the loans.

In light of the claims by Mr Fergus, who has secured legal aid to defend the proceedings, Mr Justice Brian McGovern yesterday ruled BoSI was not entitled to summary judgment orders and the case must go to a full plenary hearing.

If Mr Fergus was correct the signature was not his, this was “a serious matter” for the bank, the judge said. Equally, if Mr Fergus had no basis for his allegations, that was a serious matter for him. The issue could only be decided on oral evidence in a plenary hearing.

Mr Fergus had also raised an issue as to the bank’s entitlement to proceed against him at this stage, having earlier appointed a receiver to realise the assets of his company, the judge said. He noted the bank had initially moved under 17 guarantees but had withdrawn six of those and said he would not separate “good and bad guarantees” as the bank had sought.

He was dealing with BoSI’s application for €8.4 million summary judgment orders against Mr Fergus, Ceol na Mara, Tullan Strand, Bundoran, Co Donegal, arising from his alleged guarantees of 2004-2008 over loans to his building company, Fergus Haynes (Developments) Ltd.

Following alleged default, the bank demanded repayment of some €7.79 million in September 2008. When that was not paid, it appointed a receiver over the assets of the company and brought proceedings in the Commercial Court against Mr Fergus arising from the guarantees. It claims €8.4 million is now due and owing.

Yesterday, Jarlath Ryan, for BoSI, argued, while the company had been misdescribed in the bank guarantee documents as “Fergus Hynes (Developments)”, this did not deprive the bank of entitlement to summary judgment.

When the judge asked why the bank didn’t get its documents right, counsel argued a guarantee could be enforced where there was an obvious mistake. The court should construe the contract on the basis there was an obvious error, he said.

Justin Dillon SC, for Mr Fergus, argued the bank should not be entitled to proceed under the guarantees when a receiver had been appointed over the principal debtor, the company. He argued all of the guarantees are defective and said there was a further issue concerning a signature. Mr Justice McGovern said the case should go to a plenary hearing and he would refuse summary judgment.