The High Court has made an order for possession of some 282 acres of lands in Co Carlow after finding an unpaid loan to a company was secured on those lands.
Mr Justice McCracken yesterday granted the order to AIB against Tullow Investments Ltd, with registered offices at The Parade, Bagenalstown, Co Carlow, but put a stay on his order until November in the event of an appeal and to allow time for repayments to be made.
AIB had claimed, under an indenture of charge dated October 12th, 1994, made between it and Tullow Investments, the latter had charged certain lands as security for all monies due under the indenture. It said the indenture was registered on June 17th, 1998, regarding a loan of £200,000 (€254,130). It claimed a second loan for £200,000 was made to Tullow Investments on December 22nd, 1995.
On August 4th, 2000, AIB said it had demanded repayment of a sum of £440,022 for principal and interest on foot of Tullow Investments's accounts. Tullow had paid some £295,000 up to November 17th, 2000, but had failed to repay the outstanding balance, which now stood at some €570,000.
On September 6th, 2000, the bank's solicitors formally demanded possession of the lands charged but the defendant failed to deliver up possession.
In an affidavit, Mr Edward Nolan, a director of Tullow Investments, said the loan was made to a company called Tullow Farm Machinery Ltd. He argued the sums claimed were not due and the bank was not entitled to possession of the property in question.
The bank contended that Mr Nolan had said he would repay the amount due out of money he anticipated he would receive under what became known as the "passports for investment" scheme. He anticipated two investors worth £1 million each. One of the intended investors, however, became ill and withdrew. In a letter from the Department of Justice in July 1997, Mr Nolan was told there would be no new applications and a substituted investor would be deemed to be a new application.
The bank contended it was only after Mr Nolan received that letter that he began to claim the loan was given to Tullow Farm Machinery. Mr Nolan had said he sent a letter to the bank in January 1996 but the bank said it had never received a letter.
The bank said the first complaint by Mr Nolan relating to the loan that it was aware of was made in September 1997.
In his judgment yesterday, Mr Justice McCracken noted there was a conflict of evidence between Mr Nolan and Mr Martin Hanrahan (a chartered accountant who had audited the accounts of Tullow Investments and Tullow Farm Machinery) relating to which of those two firms the disputed loan was drawn down upon. Mr Hanrahan said the loan was made to Tullow Investments while Mr Nolan said it was made to Tullow Farm Machinery.
Mr Hanrahan had also said Mr Nolan had not queried from Mr Hanrahan which company had drawn the loan until Mr Nolan sent Mr Hanrahan a fax in July 1997.
Mr Hanrahan had said it was his belief the loan represented the loan of £200,000 made by the Bank to Tullow Investments on December 22nd, 1995 which sum was then loaned by Tullow Investments to Tullow Farm Machinery.
