Fund entitled to judgment from €3.89m, High Court rules

A fund is entitled to judgment for €3.89 million against members of a partnership over default on repayment of borrowings to build 16 apartments at Mill Race, Bunclody, Co Wexford, the High Court has ruled.

Promontoria (Gem) DAC, Haddington Road, Dublin, had sued Ciaran Redmond, Lackabeg, Co Carlow; Michael O’Neill, Market Square, Bunclody; Peter Crean, Kildavin, Bunclody; and Clody Norton, Newtownbarry House, Bunclody, all trading as the Norc Partnership.

The action arose out of a €3.89 million loan made by Anglo Irish Bank to the partnership in 2005. The loan was later taken over by Nama and sold on in January 2017 to Promontoria (Gem).

In June 2017, with the loan standing at some €4.5million, Promontoria demanded repayment. When that was not made, the fund appointed a receiver over the Bunclody apartments and also sought summary judgment against the defendants.

Mr Justice Michael Twomey said he was satisfied to grant judgment for the principal sum of €3,896,000.

Only two members of the partnership, Mr Crean, a solicitor, and Ms Norton, a businesswoman, had contested the summary judgement application, he said.

Mr Crean’s argument that his case should go to a full hearing, rather than be dealt with summarily, was based on what he said was a binding agreement he reached with Promontoria in February 2018 whereby his liability for the €4.5 million demand would be settled on an undertaking to pay €80,000.

Ms Norton also relied on that alleged agreement and said the claim against her could not be sufficiently particularised until the issue over the alleged agreement was dealt with.

In relation to the alleged settlement agreement, the judge said it was not a credible defence to the summary proceedings. Even if agreement in principle had been reached on the €80,000 settlement figure, it was clear to the court such an agreement would not be legally binding until legal documentation was signed by Promontoria, he said.

Mr Justice Twomey also rejected claims of an arguable case on grounds of alleged breach of the code of conduct for lending to small and medium enterprises or that the proceedings were statute barred.