AIB HAS secured summary judgment orders for some €3.58 million against developer Paddy Kelly and his son Simon arising from a guarantee provided by them over loans to the collapsed Thomas Read pub group.

The orders made by Mr Justice Peter Kelly increase to some €84 million the value of judgment orders granted by the Commercial Court against Paddy Kelly and three of his children.

To date, orders for some €30 million have been made against Paddy Kelly, €22 million against his son Simon and €16 million each against his son Christopher and daughter Emma.

Gary McCarthy, for Paddy and Simon Kelly, had earlier told the court Paddy Kelly’s financial position was well known and he would be unable to lodge any money in court pending any full hearing of AIB’s proceedings.

Mr Kelly had, in earlier proceedings last March, said he was considering bankruptcy.

The Kellys had raised what the judge described as a purely technical and unmeritorious argument against AIB’s claim which, the judge ruled, did not amount to the necessary arguable defence required to prevent summary judgment being entered and have the matter sent to a full hearing.

The judge noted there was no dispute AIB had loaned the monies to keep the pub group afloat, that the monies were drawn down, and essentially the pub companies had managed to keep trading over several months using the bank’s funds.

There was also no dispute the guarantee of March 29th, 2007 was signed by Simon Kelly on his own behalf and on his father’s behalf, the judge found.

The Kellys had claimed to have a defence arising from the guarantee being signed on March 29th 2007, some three days after the €3.6 million overdraft facility was agreed to be provided.

The judge said the guarantee did not arise “out of nowhere” and had to be read in the context of the bank’s facility letter of March 26th, 2007 agreeing to provide the overdraft facility on terms, including the form of security “to be provided” which included the guarantee.

The guarantee was a form of security “to be provided” and clearly Simon Kelly, a director of Sharmane – the principal trading company in the Thomas Read group – was aware of that, the judge said.

The terms of the guarantee were perfectly clear, there was consideration to support the guarantee by virtue of the facilities the bank had agreed to provide, and the €3.6 million facility was to be repaid within two months.

The judge noted the money was not repaid within two months, but AIB continued to provide facilities when it could have called in its loans, resulting in a “disastrous” impact on the pubs.

He noted the Kellys had in 2005 agreed to guarantee the liabilities of the pub companies to AIB up to a maximum €2.25 million and the bank had become concerned, and sought additional guarantees, when those debts went well over that figure, rising to €3.6 million by March, 2007.

The judge ruled the bank was entitled to the summary judgment orders.

He also refused to place a stay on the orders.

Paddy and Simon Kelly had previously consented to AIB’s application for judgment in two smaller amounts totalling some €361,000.

Of that total, summary judgment for €301,608 was entered against both defendants arising from a €3 million loan advanced to them in May, 2006 to buy shares in the pub group.

A summary judgment order for some €60,968 was entered against Simon Kelly relating to an overdraft on a current account in his name with AIB.

The bank’s larger €3.58 million claim arose from global working capital facilities extended by AIB to the Thomas Read group between December 2003 and March, 2007.

Paddy Kelly, of Clonmore, Shrewsbury Road, Dublin, and Simon Kelly, The Rectory, Dunganstown, Co Wexford, acted as guarantors for the debts.