A financial fund’s bid to obtain judgment of more than €1 million against a couple who defaulted on a loan agreement should be struck out because of the lengthy delay in progressing the claim, the High Court has ruled.
In her judgment, Ms Justice Marguerite Bolger said the delay in advancing proceedings against Joseph and Helen Bracken over loans taken out more than 15 years ago was “both inexcusable and inordinate”.
The money was originally advanced by AIB Plc. Financial fund Everyday Finance DAC acquired the loans from the bank two years ago.
Ms Justice Bolger said the balance of justice also favoured striking out the proceedings that were commenced in 2013 when AIB sought €1 million, plus interest, from the couple. While the action was commenced 11 years ago it was not set down for trial until late 2021.
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The couple, represented by Darrach MacNamara BL, instructed by solicitor Donnacha Anhold, opposed the claim against them and brought a pretrial application before the court seeking to have the claim against them dismissed on the grounds of delay.
They alleged they were prejudiced because the claim was not progressed over eight years.
Their application was opposed by AIB and then Everyday after it acquired the loan.
The couple accepted they, along with Michael Gleeson, entered into a loan agreement for €850,000 with AIB in 2007 to acquire lands in Ferbane, Co Offaly, on which it was proposed to build more than 30 housing units.
The loan facility was limited in recourse to those lands, the couple claimed. They believed the 2007 agreement meant the bank could not come after any of their other assets, including their family farm.
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In 2013 the bank brought proceedings seeking judgment on foot of a 2009 agreement which it claimed amended and extended the 2007 loan facility.
AIB claimed that a letter of sanction extending the initial facility was signed by the couple and Mr Gleeson. The couple rejected that argument and said signatures on the letter were “not our signatures”.
The couple claimed that while discussions were held with AIB, following a review of the 2007 facility, they never consented to the alleged extension, nor did they receive any additional funds from the bank as alleged by it.
Judgment was sought against the couple, from Munny, Kilcormac, Co Offaly, and Mr Gleeson, of Syngefield, Birr, Co Offaly, who is Mrs Bracken’s brother, after they allegedly defaulted on their repayment obligations.
The couple accepted the housing project was never completed and just €80,000 was repaid to the lender. In 2016 an AIB-appointed receiver sold the property for €180,000.
They claim they lost €120,000 of their savings on the project and argued the action against them was flawed and prejudicial.
In her ruling, Ms Justice Bolger said she was satisfied to dismiss the action against the couple.
While the plaintiff had offered “excuses” for the delay, including settlement discussions, and a possible complaint to the Financial Services and Pensions Ombudsman, the court was satisfied the delay was “inordinate and inexcusable”.
The judge also noted that any hearing of the case was likely to take place in 2024, 17 years after the events of 2007 and 15 years after the 2009 alleged further agreement.
The judge said there were issues in dispute between the parties, and the delay would inevitably render the evidence given by witnesses as fragile and unreliable especially when there seemed to be an absence of certain documentation.
The judge, who noted that Mr Bracken was further impaired by the very serious injury he sustained following an accident in 2017, said this was a case where general prejudice applied and the balance of justice favoured dismissing the claim against the couple.
The judge said the fund had argued its claim should be allowed to continue because a dismissal would involve it writing off a substantial amount of debt.
The judge said the bank’s position cannot be seen as being different from a litigant in any other type of proceedings “simply because of the large sums of money involved”.
“If anything a bank is in a different situation” as it had the benefit “of vast resources”, the judge said.
The judge said her provisional view was that the couple were entitled to their legal costs, having succeeded in their application.
The matter will return before the court for final orders next month.
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