Tuesday 24 January 2017

Bank fails to get summary judgment for more than €100,000 against two brothers over a loan

Tim Healy

Published 10/11/2015 | 17:17

The judge ruled that the brothers had made out arguable defences to the claim.
The judge ruled that the brothers had made out arguable defences to the claim.

A BANK has failed to get summary judgment for more than €100,000 against two brothers over a loan for purposes including the financing of renovations to one of their homes.

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Ms Justice Marie Baker ruled Sean Browne, Allen Square, Bandon, Co Cork, and Gerald Browne, Suncroft, Co Kildare, had made out arguable defences to the claim.

It means they are now entitled to a full Commercial Court hearing of the claim for judgment against them.

The brothers had defences on grounds including they were acting as consumers under the 1995 Consumer Credit Act rather than commercial borrowers, the judge said.

The case arose from a 2008 loan advanced to refinance an existing loan, made in 2006 to Sean Browne, and to release equity on lands owned by both brothers in Co Donegal.  It was also to finance renovations to the Bandon house where Sean Browne now lives.

The loan was secured via a charge over the Donegal lands.

After the brothers defaulted on loan repayments, those lands were sold by an ACC-appointed receiver for some €28,000, reducing the loan liability to some €100,000, plus interest.

Both brothers are of limited financial means and fell into arrears on repayments because of an "unanticipated financial and health crisis" of Sean Browne, who worked for a taxi company, the judge said.

Gerald Browne was a retired member of the Defence Forces.

The judge said Sean Browne had an arguable and sufficient defence that the 2006 loan was a consumer loan linked to the purchase of his principal private residence and the 2008 loan was made to refinance that loan and also made for the purpose of renovating that residence.

Gerald Browne had established a "prima facie case" the loan was a consumer loan and the bank had breached the warning letter provisions of the 1995 Act plus a mandatory provision requiring the addresses of all borrowers to be set out in loan documents, she held. 

She considered the loan documents "faulty" as they did not contain Gerald Browne's address at all.

Gerald Browne's position was "more complex" than his brother's as he was not involved at all in the 2006 facility, she said.

The 2008 loan could not be said to have furthered any "business" of Gerald  Browne, who was retired from the Army and was not engaged in any trade or profession for which he required or sought loan finance, she said. 

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