A bank has failed to get summary judgment for more than €100,00, plus interest, against two brothers over a loan to finance renovations to one of their homes and to refinance existing borrowings of one of them.

Ms Justice Marie Baker ruled Sean Browne, Allen Square, Bandon, Co Cork, and Gerald Browne, Suncroft, Co Kildare, had made out arguable defences to the claim by ACC entitling them to a full hearing.

The brothers had defences on grounds including they were acting as consumers under the 1995 Consumer Credit Act rather than commercial borrowers, the judge said.

The case arose from a 2008 loan advanced to refinance an existing loan, made in 2006 to Sean Browne, and to release equity on lands owned by both ACC fails to get summary judgment against brothers in Co Donegal to finance renovations to the Bandon house where Sean Browne now lives.

Donegal lands

The loan was secured via a charge over the Donegal lands. After the brothers defaulted on loan repayments, those lands were sold by an ACC-appointed receiver for some €28,000, reducing the loan liability to some €100,000, plus interest.

Both brothers are of limited financial means and fell into arrears on repayments because of an “unanticipated financial and health crisis” of Sean Browne, who worked for a taxi company, the judge noted. Gerald Browne was a retired member of the defence Forces.

The judge said Sean Browne had an arguable and sufficient defence the 2006 loan was a consumer loan linked to the purchasee of his principal private residence and the 2008 loan was made to refinance that loan and also made for the purpose of renovating that residence. He had also an arguable defence over alleged breach of a provision of the 1995 Act concerning the contents of a warning letter, she said.

Gerald Browne had established a “prima facie case” the loan was a consumer loan and the bank had breached the warning letter provisions of the 1995 Act plus a mandatory provision requiring the addresses of all borrowers to be set out in loan documents, she held. She considered the loan documents “faulty” as they did not contain Gerald Browne’s address at all.

2006 facility

Gerald Browne’s position was “more complex” than his brother’s as he was not involved at all in the 2006 facility, she said. The 2008 loan could not be said to have furthered any “business” of Gerald Browne, who was retired from the Army and was not engaged in any trade or profession for which he required or sought loan finance.

She considered the relevant legislation is such that a person is a consumer unless it can be shown they were acting inside their business.

The judge rejected other arguments by ACC it was entitled to summary judgment on grounds the loan, because it was secured on lands which contained a derelict structure, a ruin that was formerly home of their grandfather, was a housing loan and thus outside the provisions of the 1995 Act.

There was no evidence before the court either brother had ever intended to improve the derelict structure, where their grandfather had lived, she said. She upheld arguments on behalf of the brothers that a house has “to at least be a building”. The structure or ruin on the Co Donegal lands was not enclosed, provided no shelter and was not a building, she held.