Bank of Ireland has settled on undisclosed terms proceedings against a Dublin solicitor and his wife in which the bank sought to recover €69.5 million arising from unpaid property loans and guarantees. Summary judgment actions against companies of the couple have also been resolved.
Solicitor Brian O'Donnell and Dr Mary Pat O'Donnell, Gorse Hill, Vico Road, Killiney, Co Dublin, had argued the bank was acting unfairly and unreasonably in demanding repayment. They also complained the action was "ill-considered" with negative publicity over it devaluing their international property portfolio.
They claimed reputational damage inflicted on them as a result of the bank's action exceeded the €69.5 million being sought by the bank.
Mr O'Donnell's practice of Brian O'Donnell & Partners, Merrion Square, Dublin, is among the firms contracted to provide legal advice Nama. He described himself as one of Ireland's leading corporate lawyers, and claimed the case has had a "devastating effect" on his practise.
The bank had denied those claims and argued that what the couple essentially wanted, in light of the global financial crisis which had "consumed" many of the couple's investments that the bank should "simply not call in the money".
The bank's summary judgment application opened before Mr Justice Peter Kelly yesterday but it became evident discussions were underway between the sides. This morning, the judge was asked to give more time for talks as the sides believed they could reach an agreement.
At 2pm, the judge was told by Paul Gardiner SC, for BoI, the matter had been resolved and the only order sought was that the cases be adjourned generally with liberty to re-enter [in the event of the settlements not being implemented]. Maurice Collins SC, for the couple, said there was consent to that.
Mr Justice Kelly said he couldn't say he was surprised and the wonder was the matter had not settled some time ago. He added he wanted, in the public interest, to express his view on issues on whether the Consumer Protection Code afforded a defence to summary judgment in such cases.
Mr O'Donnell had argued he had a defence on grounds of alleged breach by the bank of the code in its dealings with the couple, including its alleged failure to deal reasonably with them over the loans.
Mr Justice Kelly said he entirely agreed with the decision earlier today of Mr Justice George Birmingham — in a case where that judge granted €32 million summary judgment against a Co Monaghan man in favour of Zurich Bank — that no defence to summary judgment arose under the code.
However, he disagreed with Mr Justice Birmingham's reference to the Zurich Bank application as one of "the rare cases" where a plaintiff is entitled to summary judgment.
While it was true summary judgment is only entered in clear cases where there is no defence, he did not accept such cases were "rare", Mr Justice Kelly said.
BoI had sought the €69.5 million summary judgment orders against the O'Donnell's over various loans and guarantees, including a €7.7 million loan to purchase a property at Ailesbury Road, Dublin and other facilities to refinance property loans with Ulster Bank and Anglo Irish Bank.
The bank also sought €42 million summary judgment orders against three companies of the couple over the same loans. The three companies are GreyStoke Societe Anonyme, a Luxemburg registered company; Vico Swiss Holdings AG and Avoca Properties Ltd.
The Bank claimed default for some time of interest payments on various facilities and also alleged the couple had failed ultimately to advance acceptable proposals to address their indebtedness and that of their companies. Last December, the Bank demanded repayment under the facilities and guarantees.
The bank had also claimed the couple, and companies in which they have shareholdings, had extensive additional borrowings of some €800 million with other financial institutions across several jurisdictions.
The defendants argued they had an arguable defence on various grounds, including the bank had acted unfairly and unreasonably and in breach of fiduciary duty to them and should have given them a proper opportunity to service and refinance the various loan facilities. They also counterclaimed for breach of implied terms of agreement and for reputational damage.
During the proceedings, Mr Justice Kelly raised issues about the exact status of Vico Capital which he noted had been described as a trading name of the couple and private equity firm but was also described by Mr O'Donnell as a limited company and partnership.
In an affidavit, Mr O'Donnell said he and his wife began using the name Vico Capital in 2006 and it was "a limited company, a partnership and business name of my wife and I". They "felt it was necessary to adopt the name for ease of reference and to depersonalise the business from our individual names". He added Vico Capital was not a holding company and BOI Private Banking understood that.
In a statement of affairs, Vico was said to have assets valued at more than €1 billion but BoI had queried the property values on which the assets statement was based.