Friends First Finance has secured summary judgment orders totalling €4.5 million against three daughters of deceased property developer Liam Maye over default on payments for loans advanced for equity fund investments.
At the Commercial Court today, Mr Justice Peter Kelly granted summary judgment orders for about €1.5 million each against Nicola, Emma and Dawn Maye after rejecting their claims of having an arguable defence to the bank’s case.
Eileen Barrington, for the defendants, had argued they had a defence on grounds of alleged breach by Friends First of provisions of the Consumer Credit Act 1995.
Hugh O’Keeffe, for Friends First, said no defence had been made out justifying the matter being sent to a full plenary hearing.
The court heard Liam Maye, who died in May 2008, had just months earlier requested that arrangements be made for his daughters by wealth advisers Warren Private Clients in order to ensure financial provision for their future.
The arrangements were tax-driven and involved the daughters being put into a fund which had been set up for Mr Maye by Warren Private Clients, the court heard.
Under the rules of the fund, the daughters would only pay tax when they exited it. To
finance the daughters’ investments into the fund, loans were secured from Friends First.
The action against Emma Maye, Belarmine Park, Stepaside, Co Dublin arose from a loan agreement of April 2008 and a later refinancing facility. Ms Maye, it was claimed, defaulted on payments due, leading to the agreement being terminated last March after which Friends First brought proceedings claiming €1.54 million was due and owing.
Dawn Maye, also Belarmine Park, Stepaside, and Nicola Maye, Weaver’s Hall, Plunkett Avenue, Foxrock, Dublin, were sued for about €1.55 million and €1.54m respectively under similar agreements terminated in similar circumstances.
After being told that a clause in one of the Friends First facility letters expressly provided that the Consumer Credit Act applied to the borrowing, Mr Justice Kelly remarked it seemed “odd” and “quite extraordinary” that consumer legislation would be used to protect people “borrowing millions to make equity fund investments”.
In his judgment, Mr Justice Kelly said there was no dispute the monies were advanced, utilised by the defendants and not repaid.
The defendants contended they had established an arguable defence on the basis of an alleged breach by Friends First of a particular provision of the Consumer Credit Act, he noted.
That provision - Section 30 - requires that a copy of a credit agreement be provided to borrowers within a 10-day period while Section 38 prevented enforcement of a credit agreement where there was a breach of Section 30.
While this was a “purely technical” defence, if it was arguable, the defendants were entitled to a full hearing, he said. However, having analysed the evidence and the law, he found there was delivery of the credit agreement in accordance with the
provisions of the Act and that the borrowers were provided with the precise terms of that agreement.
In those circumstances, the defendants had not established a triable issue, it was “very clear” there was no defence, and Friends First was entitled to summary judgment in the amounts sought, he ruled.