Monday 19 March 2018

David Drumm’s brother ordered to repay €167,000

Ken Drumm outside court in Dublin
Ken Drumm outside court in Dublin

A BROTHER of former Anglo Irish Bank CEO David Drumm, Ken Drumm, has been ordered to repay €167,843 over default on loans he got from the bank and on hire purchase agreements related to cars.

However, a dispute over Mr Drumm's liability to Anglo’s successor, IBRC, for another €51,733, arising from a loan for €50,000 made in 2008 to buy shares in Anglo, was sent to a full hearing.

Mr Justice Daniel Herbert ruled Mr Drumm had an arguable defence on this issue because Anglo, despite having "total control" over its share price, stood by while the shares fell to a zero value.

It was arguable, in choosing the time of sale of shares, a mortgagee must exercise a reasonable duty of care, the judge said.

Mr Drumm had also raised an arguable defence as to IBRC's entitlement to charge "penalty" interest on some of the sums outstanding, he found.

But Mr Drumm had no arguable defence to repayment of other sums totalling some €167,843, he said.

IBRC, now in special liquidation, sought judgment for some €234,000 over Mr Drumm's failure to meet repayments on separate loan and hire purchase agreements he or his former company entered into with Anglo between 2006 and 2008.

One of the agreements, of January 2006, related to the hire purchase of a BMW X5 car for Mr Drumm's company, Shrewsbury Developments Ltd, since been struck off the Companies Register. Mr Drumm signed an indemnity making him personally liable for the debt which amounted to €91,190 when it fell into arrears in January 2010, IBRC claimed.

IBRC also alleged he defaulted on two other hire purchase agreements for Mercedes and Volkswagen cars which he allegedly sold, without the consent of the bank and failed to pass on the proceeds to the bank.

He used €50,000 from another loan to buy €75,000 in Anglo shares and IBRC alleged he was personally liable for that debt.

He claimed Anglo officials told him there would be no personal recourse to him because security for the loan was in the shares themselves which Anglo retained control over in a nominee account.

IBRC argued there was no basis for Mr Drumm's claims of interest overcharging and also argued the share-purchase loan was never a non-personal recourse loan and he was always meant to be liable regardless of what happened to the value of the shares.

Mr Drumm represented himself in the hearing but was not in court yesterday for the judgment.  Jarlath Ryan BL, said he was attending only for the purpose of taking judgment on behalf of Mr Drumm.

In his decision, the judge noted Mr Drumm had argued IBRC's claim for some €7,000 interest on the €50,000 loan was not enforceable due to Anglo allegedly overcharging interest on his and other customer accounts for 15 and 20 years.

IBRC had said it had announced in September 2010 there had been some overcharging in relation to Libor/Euribor rates on certain loans from January 1990 to July 2004 and it engaged in refunding affected customers but Mr Drumm was not identified as one of those affected.

Mr Drumm's claims concerning overcharging related to other loan and mortgage accounts and could not be raised as a defence in this case, the judge found.

He had no arguable defence to repayment of some €22,404 on a 2007 loan for €20,000 as that was "a straightforward loan" of money to Mr Drumm, who had alleged it was a loan to buy Anglo shares. 

IBRC was also entitled to judgment arising from the hire purchase agreements but Mr Drumm had an arguable defence to "penalty" interest claims in that regard and those matters would go to plenary hearing.

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