Judgment of €4.5m granted over breaches of lease agreements

A company whose profits are distributed to charities here and abroad has been granted summary judgment for €4.5m against two other companies over alleged persistent breaches of lease agreements for aircraft, including helicopters involved in search and rescue operations.

Mr Justice Peter Kelly granted summary judgment yesterday for €4.5m and also ruled, if that sum is not paid to lawyers for the plaintiff by 3pm next Wednesday, the plaintiff is entitled to a further judgment of some €8m, plus delivery up to it of three helicopters and equipment including medical kits.

Rental payments must also continue to be paid as provided for under the leases, he directed.

If the €4.5m sum is paid by Wednesday, the case over entitlement to the additional €8m and to possession of the helicopters and medical kits will proceed to a full hearing later this year, the judge said.

The defendants were granted leave to defend on a number of grounds, including the exact nature of what was agreed at a meeting with Italian lawyers last month and the level of professional fees being claimed in the case.

The proceedings were initiated in the Commercial Court last month by Abbey International Finance Ltd, Merrion Square, Dublin — beneficially owned by the World Charitable Foundation of Ireland. Since 1993, Abbey has paid more than €21m to its beneficial owner, all of which was distributed to charities in Ireland and abroad, the court heard.

The action is against Point Ireland Helicopters, with registered offices at Earlsfort Terrace, Dublin, and Elitaliana, with registered offices in Rome. Both defendant companies are within the same group of companies whose parent is the Italian company, Point Holdings.

The case arose from a series of aircraft lease agreements involving a number of helicopters and air medical kits. Abbey claimed Point Holdings guaranteed the obligations of the two defendant companies under the leases and alleged serious default in relation to payment obligations under the leases since late 2008.

In opposing summary judgment, the defendants disputed the validity of termination notices served on grounds including alleged discussions between the sides last month which resulted in a €300,000 payment to the plaintiffs. They also argued that Italian law governed those discussions.

In his ruling yesterday, Mr Justice Kelly noted there had been default on rental payments under those leases almost from the beginning and the defendants admitted €3.2m rent was owed but disputed the additional claims. While he regarded the line of defence as weak, he would grant leave to defend but on conditions including payment of the €4.5m sum by Wednesday.

In the proceedings, Abbey has alleged it was trying to service loans while at the same time the defendants were defaulting on their lease payment obligations.