IN THE COURTS: COLM KEENApresents the first in a series of articles on how the economic slowdown is manifesting itself in the courts

DUBLIN’S COMMERCIAL Court on a Monday morning has always been a busy room.

Yesterday, the first day on the new legal term, was no different. There was a long list of cases before Mr Justice Peter Kelly and barristers in black gowns stood around waiting their turn.

But when Friends First Finance Ltd vs McElligott and Another was called, the man who stepped forward wasn’t wearing a gown. Eamon McElligott told the judge he was representing himself and his wife, Esther.

The businessman and his wife, from Kilcolman, Asdee, Listowel, Co Kerry, had guaranteed loans from Friends First taken out by their company, Asdee Quarry Products Ltd as part of plant hire agreements. The loans were now in default.

Mr McElligott argued that the debt did not exceed the €1 million threshold that normally applies to cases in the Commercial Court.

Also, in the last few months he been offering to pay Friends First €1,200 per week. The first cheque had been accepted but more recently the cheques were being returned. “I feel we had an agreement on payment by instalment,” he argued, because the first cheque had been cashed.

Mr Justice Kelly said however that the debt was close to €1 million and he was inclined to allow the case enter his list. He also suggested that Mr McElligott and his wife take legal advice, though they were perfectly entitled to represent themselves.

“If you had a pain in your stomach you’d go to the doctor,” he said.

Later, in Dahra Services Ltd vs Milltown Engineering Ltd, the court heard how two businesses had initially tried to settle their differences without recourse to litigation. During an encounter at a hotel during the Galway Races last year, the applicants, Dahra, had vented their frustration but failed to get the money they were saying they were owed, the court heard.

It was, the court heard, a “significant sum for a small company”and it would be “cruel” if it wasn’t admitted to the Commercial Court, which is designed to allow for the more speedy resolution of commercial disputes. Mr Justice Kelly granted the application. In all there were 31 cases listed for the court.

Upstairs in Court 12 Mr Justice Brian McGovern had an equally if not more demanding list. Outside in the hallway barristers representing a range of parties interested in a major examinership case waited to find out if they could be heard.

In the event there wasn’t time. The case involves an asset management group called First Equity, which has projects worth up to €1 billion under management. The court heard the group had creditors owed €8 million, with the principal creditors being a “Mr Lyons and Mr Kenny”, of Kenny Lyons solicitors, who are owed €2 million. The group was put into interim examinership before Christmas, when Kieran Wallace of KPMG was appointed. Also represented in the court yesterday were AIB, Bank of Scotland Ireland, and the Revenue.

When Mr Justice McGovern said he would extend the protection of the interim examinership to today, when he hoped to hear the case, barrister Rossa Fanning said he and some of his colleagues would be held up in another major examinership case for the first hour of business. Mr Justice McGovern said he would accommodate them.

The courts were all but empty when Mr Justice McGovern heard an application on behalf of Kevin Bradley, from Newport, Co Tipperary. The court heard Mr Bradley was a builder who had a business partner called Ken Herbert, an accountant. A letter from a “Mr Flynn” was shown to the judge, who asked if it was a “private investigator known to the court”. There was no answer to that question. The court heard the letter indicated that Mr Bradley was hopelessly insolvent.

Ulster Bank was looking for €128,000 from Mr Bradley. He was asking the court to set aside a judgment order made by the Master of the High Court because he felt the case before the court should not be heard separate from another case involving Mr Bradley and Mr Herbert. Also, Mr Bradley felt Mr Herbert should be responsible for some of the debt.

Counsel for the bank said she was anxious the Master’s order was upheld as the letter from Mr Flynn indicated another bank was owed €6 million. “I’d be concerned another bank might step in ahead of me in the queue,” she said. The judge ruled against Mr Bradley.

• Colm Keena will be reporting all this week from the Commercial Court and other courts dealing with business cases