A COURT in Belfast has ruled that two Limavady businessmen should make a payment of £200,000 (€242,400) on foot of a promissory note they signed in favour of Oxigen Environmental, Dundalk, Co Louth.
However, the court has also ruled that the money should be paid into the court, pending a counterclaim that is being taken by the two men against Oxigen, one of the Republic’s largest waste-management and recycling companies.
Mr Justice Ronald Weatherup made the ruling in a case taken by Oxigen against Shaun Mullan and Brian Mullan, the operators of B Mullan Sons Contractors Ltd.
The firm owned lands that were considered suitable for landfill and held discussions with Oxigen about a possible joint venture. An oral agreement was reached in July 2009, whereby Oxigen would pay £2 million and a joint venture would be established, into which each side would inject £1 million.
In August 2009, Oxigen transferred £200,000 to the Mullans, and a promissory note was executed by them for that amount. In June 2011, Oxigen indicated the joint venture would not be proceeding and sought payment on foot of the note. The defendants claimed the payment was a deposit paid in respect of the agreement between the parties, being 10 per cent of the agreed £2 million.
In his affidavit to the case, the founder of Oxigen, Seán Doyle, said the payment had been the result of a request by B Mullan Sons for a loan. He said he was not content to lend the money to the firm, as he had a concern about security, and that this led to the idea of a promissory note.
The judge ruled that there had to be exceptional circumstances before the right to judgment based on a promissory note could be refused. Such notes were “free-standing independent” agreements, he said, and he did not think that the claim of a breach of the joint venture agreement being made against Oxigen was a qualifying exceptional circumstance.
However, because the note arose in relation to the dealings over the proposed venture, he put a stay of execution on the judgment pending the hearing of the Mullans’ counterclaim for damages for breach of contract.
