Fund’s €2m bid unfair and premature, says Mick Wallace

Independent TD Mick Wallace has opposed as “unfair and premature” an application by a fund for €2m summary judgment orders against him over his guarantee of a bank loan to his firm.

Mr Wallace previously said he lacks the means to repay €20m separately due to ACC Bank, the Commercial Court heard.

Mr Justice Brian McGovern yesterday heard arguments on behalf of the TD and the Promontoria (Aran) Ltd fund before reserving his decision on the summary judgment application. The judge indicated he would rule within a few days.

The fund, represented by Paul Gardiner, claims Mr Wallace has no arguable defence to its bid for summary judgment arising from his guarantee, limited to €2m, of a €2.1m loan made by Ulster Bank in 2009 to his company M & J Wallace Ltd. It also claims that loan was validly assigned to it.

Mr Wallace claims the loan was not validly assigned and thus the fund has no legal entitlement to sue him.

He maintains the fund, having appointed a receiver late last year over assets of M & J Wallace after it failed to repay a demand for €2.2m comprising the full loan and interest, should await the outcome of the receivership. An expected sale of property in Dublin’s Italian Quarter should, given the rise in property prices, yield funds to reduce the debt, he said.

His counsel Stephen Walsh said Mr Wallace contends the summary judgment application is premature and a waste of court time and resources. His client had raised an arguable defence requiring the court to refuse summary judgment and send the matter for a full plenary hearing.

Mr Gardiner, for Promontoria, argued that none of the matters advanced by Mr Wallace amounted to a defence to summary judgment. Only after entry of that judgment should the court address issues about its execution or whether to grant a stay, he argued.

He said there was an “unequivocal statement” by Ulster Bank of February 27, 2015, that it had assigned its rights in the 2009 facility to Promontoria. Mr Wallace had also made admissions about his failure to engage with the fund concerning the debt, said Mr Gardiner.

Mr Wallace had admitted his company was given the €2.1m loan and he executed the relevant guarantee, said Mr Gardiner. There was no dispute a demand was issued by Promontoria and, when no repayment was made, a receiver was appointed over assets of the company. Mr Wallace’s firm had not challenged the appointment of a receiver or a notice of assignment of the debt.

Mr Wallace had opposed this application being fast-tracked by the Commercial Court on the basis of an assertion he owes ACC €20m and had no means to repay this, but that assertion supported this judgment application, counsel said.

Mr Walsh, for Mr Wallace, said the fund’s “unfair” characterisation of Mr Wallace’s affidavits did not reflect the reality Mr Wallace had raised arguable issues concerning assignment of the loans.

There was no evidence before the court to show the person who accepted the Ulster Bank loan on behalf of Promontoria was authorised to do so, he said.

For an assignment to be valid, notice of it must be given to the debtor, he argued. That was a strict statutory requirement, not an “arid and technical” point, and notice was not given.