A BANK'S demand that a businessman's company repay €1.06m within 45 minutes was not reasonable, a judge has ruled.
The demand to make the payment to a nominated account on a Friday evening was not realistic or reasonable, High Court judge Gerard Hogan said.
Even if Sean Foley's own bank was open when he got the demand at 4.15pm on March 22, it would be "a heroic feat of efficiency" to have ensured the money was actually received in an account by Bank of Scotland by 5pm as anyone who ever tried to effect "even the simplest banking transaction" would immediately understand, Mr Justice Hogan said.
Bank of Scotland handed the demand to Mr Foley, whose company Belohn Ltd operates Foley's Bar and restaurant on Dublin's Merrion Row, just hours after the High Court ruled its October 2012 appointment of a receiver to Belohn was invalid because the receiver was not appointed by a deed under the bank's seal.
The holding company for Belohn is Merrow Ltd and both companies owe the bank some €5.7m. The bank's €1.068m demand related to Merrow's debt. While the bank also served a demand on March 22 for the €4m Belohn debt, it did not then move to appoint a receiver to that company.
After the High Court discharged the Belohn receiver's appointment, Mr Foley the next day, March 23, secured court protection for that company and an interim examiner was appointed.
When seeking that examinership, he was unaware the bank had appointed a receiver to Merrow on March 22. When he learned that on Sunday March 24, his lawyers applied to the High Court that night for an interim examiner to be also appointed to Merrow.
Bank of Scotland subsequently applied to set aside the appointment of the interim examiner to both companies on grounds including alleged failure to disclose relevant matters.
In his judgment today, Mr Justice Hogan ruled the decision appointing an interim examiner on a one-side only basis to Belohn may be justified in the very special circumstances here, that a receiver had been appointed for six months prior to being discharged.
At the full hearing of Belohn's petition for examinership, there would have to be an entirely fresh application for examinership on notice and the court would have to be satisfied it was appropriate to appoint an examiner, he stressed.
He ruled the 45 minutes allowed for the repayment of the €1.068m loan by Merrow before a receiver was appointed to that company sometime after 5pm on March 22nd was neither realistic nor reasonable. It was hard to see how any demand for repayment within minutes could be reasonable although, in certain conditions, it might be reasonable to demand repayment within hours, he said.
The failure, due to a bona fide error, to disclose to him when hearing Merrow's examinership application, email correspondence showing the bank's receiver was willing to hand over documents necessary for preparation of an independent accountant's report for examinership was "highly material" to the exercise of his discretion whether to appoint an interim examiner, he ruled.
In those circumstances, he set aside his March 24 order related to Merrow, made under Section 3A of the Companies Act, granting it interim court protection until the following day.