The agreement for the €10m loan was made to the three by Dermot O’Rourke in 2006 provided it was repayable over three years at 30% interest per year. He claimed about €22m was due over failure to repay it by August 2009 and he was also entitled to 32% interest on the outstanding sum from 2009 onwards.
Ms Justice Mary Finlay Geoghegan ruled Mr O’Rourke, Keredern House, Naas, was not entitled to the judgment orders against Thomas Considine, Coast Road, Oranmore, Co Galway; Patrick Sweeney, Main Street, Loughrea, Co Galway, and Gerard Prendergast, Moortown, Naas, Co Kildare.
Her conclusion was based on construction of a 2008 assignment of the loan by Mr O’Rourke to Bank of Scotland Ireland (BOSI) so as to address liabilities of his to the bank and a purported reassignment by BOSI of that loan back to Mr O’Rourke in 2010.
She stressed her conclusion does not exempt the defendants from an obligation to repay the loan to the person entitled to the benefit of the loan agreement. That agreement must be applied in accordance with the interest terms set out in it, she also stipulated.
The case arose from the sale in 2006 of lands at Millennium Park by Mr O’Rourke and Gerry Conlan to the defendants. The sale was effected through purchase by the defendants of the share capital of two firms, Bandenberry Ltd and Maplefern Holdings Ltd.
Mr O’Rourke alleged he agreed to provide the defendants with a loan for €10m so they could provide shareholder loans to Osberstown Developments Ltd to buy the lands at Millennium Park.
The defendants opposed summary judgment on grounds including Mr O’Rourke had assigned the loan agreement, with their consent, to BOSI in 2008.
They also argued he was not entitled to recover interest at the “unconscionable” rate of 30% and that the 32% interest rate which he sought to apply to the loan after 2009 was a penalty and not recoverable.