€9.7m summary judgment over businessman's property loans
The High Court has granted summary judgment for €9.7m against a businessman over borrowings his company received to purchase investment properties.
Mr Justice Michael Twomey also granted an injunction preventing James (Seamus) Fagan, and his son Conor from interfering with a receiver's access to two apartment blocks in Dublin which were used as security for the borrowings.
James Fagan, of Ladycastle, Straffan, Co Kildare, is a director and shareholder of Chevas Securities, which in 2010 borrowed around €10m from Ulster Bank to purchase properties in Dublin, Sligo, Dundalk and Galway. The borrowings were secured over a large number of properties, in particular 28 apartments known as Royston Village in Kimmage, Dublin.
The borrowings were restructured in September 2013 and in 2015 Ulster Bank transferred them to Seaconview which last year demanded repayment of the outstanding amount.
Seaconview appointed a receiver over the secured assets in December 2017. It also applied to the Commercial Court for summary judgment for €9.7m
Mr Fagan opposed the application saying that Chevas had reached an agreement with Ulster Bank whereby the loan ceased to be an immediately repayable on-demand facility.
He also argued that because Seaconview agreed with Chevas in May 2016 to accept €30,000 monthly repayments, funded by rents from the properties, there was no breach of his obligations and no default in the loan repayment.
That same agreement did not include a term that the borrowings were repayable on demand. Seaconview denied there was any agreement for conversion of the on-demand nature of the loan. The May 2016 agreement was for a €45,000 monthly repayment, not €30,000, Seaconview said.
Judge Twomey said Mr Fagan's "bald assertions" about the conversion of the on-demand nature of the loan, "flies in the face of the documentary evidence". This was not sufficient to constitute the summary judgment application, he said.
The court could also not attach any particular significance to a claim made in a counter-claim by Chevas that it had suffered loss arising from an allegation that Seaconview or Ulster Bank had lost the title deeds to the properties.
The judge further granted an injunction against Chevas, Mr Fagan, and his son Conor, of Highfield Road, Dublin, preventing them from interfering with receiver Anne O'Dwyer, of Duff and Phelps, interfering with her (receiver's) access to the Kimmage apartments.
The common areas around the apartment blocks were in the name of another company (New Vision) which is controlled by James Fagan, and it was claimed the receiver was not entitled to use these areas to access the apartments.
The judge said the balance of convenience supports an injunction preventing the defendants from prohibiting access.
The injunction also requires the defendants not to make unlawful approaches to tenants regarding non-payment of rents to the receiver. The rents are to be lodged in a ring-fenced account pending the full trial of the action.