Bank entitled to judgment of €18.5m against Church
BANK of Scotland (BOS) is entitled to judgment of €18.5m against the trustees of a non-denominational church arising from loans advanced for the construction of a new church.
The High Court ruled BOS is entitled to judgment against Victory Christian Fellowship church's trustees Brendan Hade and against his wife Sheila Hade, a senior pastor of Fountain Head, Rockbrook, Rathfarnham Dublin. It is also against church founder Gerry Byrne of Woodstown, Knocklyon, Dublin.
Mr Justice Paul Gilligan ruled the bank, and joint receivers it appointed over three of the Fellowship's Dublin premises, are also entitled to permanent injunctions restraining the trustees and others from obstructing or interfering with the receivers taking possession of properties.
The three properties are located at Kilmacud House, Kilmacud Road, Upper Stillorgan; Westland Row and Firhouse Road, Tallaght. They were put up as security for monies advanced by BOS in 2007.
The loans were advanced so the Fellowship could move from its base at Westland Row to a bigger premises at Firhouse, where a new church - the Victory Centre - was constructed. The property at Kilmacud is used as a direct provision centre for asylum seekers in Ireland.
In its action, BOS said it was fully entitled to appoint receivers, chartered accountants Paul McCann and Patrick Dillon over the three properties last May.
BOS rejected the trustees' claims it had breached an agreement in regards to a strategy to deal with the Fellowship's debt to the bank.
There was no reasonable possibility of the trustees obtaining alternative finance within any reasonable period of time, which was a required element of any agreement between the parties.
In a defence and counterclaim, the trustees, who accepted the monies are due. claimed they had agreed in late 2012 with BOS to resolve the dispute over the unpaid loans. However they claimed the agreement was breached by the premature appointment of receivers.
They argued that last April, prior to a decision being taken to appoint the receivers, BOS was given information, from the Fellowship's financial advisor, which the advisor was not sanctioned to give.
The information was disclosed to BOS before the parties had resolved or concluded their differences with BOS and was a decisive reason for the appointment of receivers.
This information included that Revenue had removed the Fellowship's charitable status and that allegedly fraudulent invoices were generated in relation to the construction of the Victory Centre by a party connected to the trustees.
The trustees had denied the claims in respect of the invoices, and argued the removal of the charitable status by revenue was under appeal.
In his ruling, Mr Justice Gilligan said the court was willing to accept BOS's evidence that primary reason behind the appointment of the receiver was the outstanding arrears on the debt owed by the fellowship and the "lack of any progress in relations to sourcing alternative finance"
The Judge said even if the alleged fraud was taken into account by the bank "it could have been only of minor importance."
The court was unable to conclude if there had been a breach of confidence by the Fellowships financial advisor who, the judge said, was not a party or a witness at the proceedings.
Last May receivers obtained injunctions against the trustees over what they said was an organised campaign to prevent gaining access and taking possession of the premises. The receivers claimed those orders were ignored and the trustees and unnamed others prevented them gaining possession.