€8.7m judgement for financial fund against Galway developer

by Ann O'Loughlin

A financial fund is entitled to judgment of €8.7m against a Co Galway based developer, the High Court has ruled.

Mr Justice Max Barrett, in his judgment found Seaconview Designated Activity Company is entitled to a summary judgment against Mr John Lally of Drimcong House, Moycullen, Co Galway.

He had opposed the application and argued the case should go to a full hearing on several grounds including that there had been an unreasonable an excessive delay by Seaconview is seeking judgment against him.

Seaconview opposed the application and argued Mr Lally had no defence to the claim.

The Judge said "Enterprise and speculation are the lifeblood of a free economy" and Mr Lally is a "man of enterprise who speculated on property."

For a time the Judge said Mr Lally was successful, but more recently his fortunes had turned. This was something the Judge said Mr Lally was "deserving of and has the court's sympathy."

However, the Judge said he was satisfied Mr Lally has no case and the points raised on his behalf produced no issue to be tried.

Mr Lally had also failed to disclose even an arguable defence to the fund's claim.

In all the circumstances the Judge said Seaconview is entitled to the summary judgement.

The application for the judgement arose out of guarantees the fund claims Mr Lally made to lenders in 2006 when a company he was a director Brackville Holdings Limited was advanced €82.5m to acquire properties in Dublin.

It is claimed that in 2006 Mr Lally entered into an agreement called an Interest Shortfall Agreement where he unconditionally and irrevocably guaranteed Brackville's obligations to pay interest on the loan facilities.

It is also claimed as part of that agreement Mr Lally undertook to pay the lenders on demand interest due if Brackville failed to pay the interest when it was due and payable.

In September 2015 the loans were acquired by Seaconview.

In 2016, Seaconview demanded payment of €88.1m from Brackville. When the demand was not satisfied it appointed a receiver over the assets.

The properties were sold in 2016, and the net proceeds of sale were applied to reduce Brackville's liabilities.

However, Seaconview says that €8.7m in interest remains outstanding.

It made a demand on Mr Lally for payment of that amount, which it claims he has failed to satisfy.

In his application seeking to have the case go to a full hearing, Mr Lally raised issues about the transfer of the loans to Seanconview.

He had also complained of certain discrepancies in figures cited in the demand letter.

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