Friday 15 December 2017

Businessman entitled to hearing over his claim he is only 50pc liable for €4.6m summary judgement

Tim Healy

A BUSINESSMAN is entitled to a hearing over his claim he is only 50pc liable for summary judgment for €4.6m in relation to a shopping centre development in Co Tipperary, the Commercial Court has ruled.

John Hegarty, Ballygrannan, Drombanan, Co Limerick, who inherited the family scrap metal business, is entitled to argue he was the victim of negligent misrepresentation from AIB when he was seeking loans to invest with others in a shopping centre in Clonmel, Tipperary. The investment was also to buy development land in Maynooth, Kildare.



The loans were later taken over by NAMA which last June sought summary judgment against Mr Hegarty who, Mr Justice Peter Charleton noted, had developed the family scrap business it so that he "accumulated substantial wealth".



On June 21 last in the Commercial Court, Mr Hegarty consented to the entry of summary judgment for €15.5m against him after he accepted he had no defence to the demand in relation to borrowings and guarantees by him for the Maynooth land. AIB had also sought another €4.6m in relation to the fitting out of the Clonmel shopping centre.



However, while consenting to that judgment, Mr Hegarty said he only had a 50pc liability for the Clonmel project. That issue was adjourned and later dealt with in a hearing before Mr Justice Charleton.



Ruling today that Mr Hegarty was entitled to a full plenary hearing of the matter, Mr Justice Charleton said his defence cannot be classified as weak or insubstantial.



Mr Hegarty's involvement in the Clonmel and Maynooth projects was as part of a group involving two other men and two companies against whom various summary judgment orders were also obtained last June by NAMA.



Mr Justice Charleton said Mr Hegarty claimed that during the course of a business meeting in April 2009 with AIB representatives, he (Hegarty) raised concerns about the amount of borrowings of the other people involved in the projects. It was confirmed to Mr Hegarty by an AIB official that he only had a 50 per cent interest in the Clonmel development and would only be pursued for that amount, the judge said.



The law in relation to entering summary judgment is clear that any defence must have sufficient credibility to have a reasonable prospect of success, he said.



He was satisfied Mr Hegarty had raised sufficient controversy about the matter to require the court to hear and resolve evidence.



He gave leave to Mr Hegarty to remit the matter for full plenary hearing as there were substantial grounds for him to argue he was "the victim of negligent misrepresentation" and also that there was an unfair resiling from the representation made to him.



The judge also ordered the Attorney General be notified of the case as constitutional issues may arise under Section 101 of the NAMA Act 2009 in relation to the enforceability of such representations.

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