Tuesday 16 January 2018

Shopkeeper failed to establish reckless lending by Zurich Bank, Commercial Court finds

A SHOPKEEPER who claimed he only got a €32m loan because Zurich Bank officials enhanced his original loan proposal cannot go ahead with his action against the bank, the Commercial Court has ruled.





The loan to Jim McConnon was to develop a shopping centre in Castleyblaney, Co Monaghan, which is now estimated to be worth between €1m and €2m.



Mr Justice Peter Kelly found yesterday Mr McConnon had failed to establish an alleged tort of reckless lending exists as a civil wrong in Irish law. Therefore, even if that claim had not been addressed in earlier proceedings by the bank against Mr McConnon, he could not proceed with such a claim, the judge said.



The judge also halted Mr McConnon's action on grounds including that various other claims advanced had already been decided against Mr McConnon when the bank secured a €32m judgment against him in March

2011 over unpaid loans advanced in 2007 to develop the shopping centre. In 2010, the bank appointed a receiver over the centre.



Alleged new evidence had been put forward by Mr McConnon, Main Street, Castleblayney, in support of claims that his loan application was improved upon by bank officials before it was put to their credit committee for approval, had been before Mr Justice George Birmingham in the earlier proceedings, the judge said.



In those and other circumstances, this material did not amount to new evidence entitling Mr McConnon to proceed with his case, he ruled.



He was giving his reserved judgment granting the bank's application to prevent Mr McConnon's case proceeding on grounds including the issues raised could not succeed or had already been decided by Mr Justice Birmingham when he granted judgment against Mr McConnon.



After judgment was given, Mr McConnon said he intended to appeal it to the Supreme Court. The judge granted the bank's application for costs against Mr McConnon but placed a stay on that order for four weeks to allow for the bringing of an appeal against it.



The judge told Mr McConnon he was sorry for his situation and added, while he was sure it was "no consolation", the court dealt with cases of people in situations such as his every day of the week. Sometimes

he dealt with people who had borrowed much greater sums of money, and sometimes smaller sums, but Mr McConnon was "not alone in this situation, I'm afraid."



Mr McConnon had last year initiated proceedings seeking orders to stop Zurich Bank Ireland enforcing the €32m judgment.



He also sought orders requiring the Garda Commissioner to launch an investigation into the "modus operandi" of the bank and directing a judicial inquiry into the alleged "unlawful operation" of the bank. He further sought protection under provisions of the Constitution obliging the State to vindicate the rights of citizens to life, property and good name.



Last month, his claims against the Taoiseach, the Commissioner and various State parties were struck out on consent.



Mr McConnon, while accepting he received and used those loan monies for a shopping centre in Castleblayney had said he wanted all those involved in the process leading to his getting the loan to "take some responsibility". If the bank stuck with its own rules and regulations and the law, it would not have given him the money, he argued.



The bank should have refused to give him the loan and its "wrongdoing"

led to his having a liability which he should not have, he claimed.



The bank has also taken bankruptcy proceedings against Mr McConnon while he has appealed to the Supreme Court against Mr Justice Birmingham's decision granting judgment against him. The bank in 2010 appointed a receiver over the centre

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