Anglo Irish Bank has failed to obtain summary judgment orders for €84.4 million against a developer after a High Court judge ruled he had made out an arguable defence.
Michael Daly, of "Dalmin", North Circular Road, Limerick, is being sued for €84.4 million over unpaid loans of some €165 million to the Limerick-based Fordmount property group and two partnerships.
He argued, among various claims, he was assured by officials in Anglo personal guarantees provided by him over loans were effectively "paper" guarantees and would never be called upon.
He also alleged he had "easy access" to senior figures in the bank, including Sean Fitzpatrick and David Drumm, and was actively encouraged in 2006 and 2007 to undertake massive property developments here and abroad with the assurance hundreds of millions would be loaned by Anglo.
Today, while stressing he was making no finding on the merits or otherwise of either the bank's claim or Mr Daly's defence, Mr Justice Peter Charleton ruled Mr Daly had made out an arguable defence such as required the matter go to a full plenary hearing.
The judge said much of what Mr Daly had said relating to guarantees and other matters was inconsistent and he also had to explain why, at a crucial point in early 2008, he had to submit a statement of his assets to the bank.
Mr Daly had also suggested it was indicated to him by Anglo officials that its rules about guarantees could be circumvented.
The court could not at this stage make an assessment of his credibility or take any view as to how either side had behaved, the judge said. Mr Daly had raised issues adequate to get him over the low threshold required to send the matter to a full
hearing, he ruled.
He made directions to ensure a speedy hearing of the action in the Commercial Court and adjourned the case for mention to May 20th.
Mr Justice Charleton told Brian Kennedy, for Anglo, he expected the bank would make discovery of minutes of credit control comitee meetingfs and other documents sought by Mr Daly.
The case relates to loans of more than €165 million advanced by Anglo to three companies in the Fordmount property group and two partnerships to buy property in Limerick city and county for development. When the loans were not repaid by December last, the bank appointed a receiver over most of the assets of the companies.
Anglo claims Mr Daly was a director at all material times of Fordmount Property Group Ltd, Fordmount Developments Ltd and Fordmount Developments (Savoy) Ltd, and a 50 per cent partner of the Fordmount Partnership and the St Munchin's House Partnership. Mr Daly has a liability for some €84.4 million of the loans to the companies and partnerships, Anglo alleges.
Mr Daly claims any loans entered into by the partnerships were done so as partners and any personal guarantees were on the basis of five guarantors. He claims his partners were four partners in the law firm, Dermot G. O'Donovan & Partners - solicitors Dermot O'Donovan, Michael Sherry, Aidan Frawley and Thomas Dalton.
Representing himself, Mr Daly told the court he had relied on oral assurances from Anglo officials that personal guarantees provided by him over loans were secondary to the security taken by the bank and would never be relied upon. He claimed the bank failed to take proper security and its handling of securities was "a shambles".
Lawyers for Anglo argued it was clearly entitled to summary judgment as Mr Daly, an accountant and experienced businessman, had accepted the monies were loaned and he had signed the guarantees.
The claims by Mr Daly about his access to senior Anglo executives were not relevant to the application and the allegations about Anglo's approach to the guarantees were "incredible", the bank also argued.
