Businessman loses appeal over €228,005 judgment

A businessman has lost his appeal over a €228,005 summary judgment order obtained against him by ACC Loan Management DAC arising from a 2006 loan relating to a number of Dublin properties.

The Court of Appeal (COA) dismissed Eugene McCool’s appeal against the High Court’s judgment order after finding he had no arguable defence entitling him to a full hearing of the bank’s claim.

Ms Justice Ann Power, giving the COA judgment this week, said Mr McCool, as well as being owner and managing director of McCool Controls and Engineering Limited, had business interests in the property market.

He had purchased, developed and sold many properties over the years, including some rented out for student accommodation.

This case particularly concerned four properties – one at Howth Road and one at Clontarf Road, both Dublin 3, and two adjacent properties at Shanard Road, Santry – as well as three corresponding loan accounts.

In 2006, the bank offered a €630,000 two-year facility, secured on the Shanard Road properties, to restructure existing facilities on the Shanard Road and Howth Road properties. A condition of the funding was the Clontarf Road loan would be “cleared in full”.

A loan of €624,696 was drawn down in August 2006 and Mr McCool did not repay the loan as per the terms of the letter of loan sanction, she said.

At the request of Mr McCool, and with the bank’s agreement, repayment dates were extended a number of times, with a third extended date up to July 14th 2010, but he did not make repayment by any of the extended dates.

On September 19th 2013, the bank wrote to him, saying some €872,722 was owing under the loan agreement, plus €196 daily interest. It sought payment “forthwith”, failing which any of its rights might be exercised without further notice.

Two days later, it appointed a receiver over the Shanard Road properties which were both sold in 2015 with the proceeds applied against Mr McCool’s loan.

The bank later initiated proceedings for summary judgment seeking €228,005 allegedly outstanding.

Defence

Mr McCool argued he had a defence on grounds including the bank made a mistake when it set up the 2006 loan. He claimed it erroneously created a short term investment loan for the Shanard Road properties when, he claimed, he advised from the outset he required a long term loan for a residential investment property. He also claimed ACC’s appointment of a receiver was unwarranted and he had suffered loss, including of rental income, arising from the bank’s action.

Arising from the sale of the Shanard Road properties, sums of €239,649 and €243,553 were applied to his account. He claimed that was a “fire sale” and the true value of the properties was not achieved. The bank denied his claims.

Having analysed the evidence and applied the relevant law, Ms Justice Power said the claim of error by the bank in setting up the loan was not supported by the record and was incompatible with the history giving rise to the loan agreement, the letter of loan and the variation letters.

In varying the repayment of the original loan, the bank acted reasonably and afforded Mr McCool every opportunity to comply with the terms of its original facility letter, she said

The debt has not been discharged and none of the issues raised by Mr McCool amounts to an arguable defence to the judgment claim, she held. Nor had he made out a valid counter-claim.