Danske Bank A/S trading as Danske Bank v Gillic & ors

Factual and Procedural Background

The Plaintiff, formerly known as National Irish Bank, granted a loan facility of €615,500 to the Defendants for the purchase of approximately 0.74 hectares of land at Cristendum, Fairybank, Waterford. The facility letter, dated 1st December 2006, included a condition precedent requiring a professional valuation of the property showing a minimum open market value of €1,200,000. The loan was to be repaid in full by 30th September 2008, with interest payable in eight quarterly installments. The Defendants signed the acceptance and drew down the loan. The property lacked planning permission for development and was eventually sold under receivership in June 2014 for €37,237.51, after deduction of receiver’s fees. The Plaintiff credited the Defendants with the net proceeds of sale. The Plaintiff seeks summary judgment against the second named Defendant for €752,581.53. Appearances were entered by the first and second Defendants, and judgment was previously obtained against the third Defendant in default of appearance.

Legal Issues Presented

1. Whether the second Defendant has a fair and reasonable probability of a real and bona fide defence to the Plaintiff's claim for repayment of the loan facility.
2. Whether the second Defendant signed the loan agreement in a personal capacity or solely as a director of a company.
3. Whether the appointment of a receiver over the property was lawful.
4. Whether the Plaintiff is estopped from enforcing the loan due to an alleged agreement to "park" the property and suspend interest accrual.

Arguments of the Parties

Plaintiff's Arguments

• The second Defendant failed to make payments as required under the loan facility.
• Letters of demand were sent on 13th August 2013 and 6th November 2013, which remained unheeded.
• The loan was drawn down by the Defendants personally, not by any company.
• The loan facility letter acknowledged the Defendants acted in their personal capacity as property investors.
• The appointment of the receiver was lawful and justified due to non-payment.
• The alleged agreement to "park" the property and suspend interest accrual is unsupported by documentary evidence and inconsistent with commercial practice.
• The Defendants took no meaningful steps to sell the property or mitigate loss after 2011.

Second Defendant's Arguments

• The loan facility was granted to a company, International Property and Investments Ltd., and the second Defendant signed only as its director, not personally.
• The appointment of the receiver was unlawful as it occurred shortly after a letter of demand that allowed seven days to pay.
• The Plaintiff made an unambiguous representation that the property would be "parked" for 5-7 years starting from January 2009, during which interest would not accrue.
• The second Defendant relied on this representation to his detriment, and the property was subsequently sold for less than it could have been if sold earlier.
• The defence of promissory estoppel applies, and the matter requires a plenary hearing for discovery and examination of bank officials.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court carefully applied the established legal test for summary judgment, requiring the Defendant to show a fair and reasonable probability of a bona fide defence. It examined the second Defendant’s three grounds of defence in detail.

Regarding the claim that the loan was taken on behalf of a company, the Court found no credible evidence of company involvement: no board resolution, no company correspondence, no company account into which the loan was drawn, and no evidence of company ownership of the property. The second Defendant’s assertion was made late and contradicted by the course of dealings, rendering it not credible.

On the receivership challenge, the Court held it irrelevant to the present claim. The Plaintiff was entitled to initiate proceedings after the letter of demand, and any grievance about the receiver’s appointment should be pursued separately.

Concerning promissory estoppel, the Court found no cogent evidence of an unambiguous representation or agreement to "park" the property and suspend interest accrual. There was no written agreement or documented terms, making the alleged arrangement commercially improbable. The Defendant failed to demonstrate the essential elements of promissory estoppel, including reliance and detriment supported by evidence.

Overall, the Court concluded that the second Defendant did not satisfy the test for a bona fide defence, and the evidence did not disclose an arguable defence warranting a plenary hearing.

Holding and Implications

The Court granted Summary Judgment in favor of the Plaintiff against the second Defendant in the sum claimed.

This decision directly resolves the Plaintiff’s claim for repayment against the second Defendant without a full trial, as no credible defence was established. No new legal precedent was set beyond reaffirming established principles governing summary judgment and promissory estoppel.