A High Court judge has criticised the “sloppy” and “careless” manner in which legal proceedings are being brought by various banks in their efforts to recover multi-million euro unpaid loans that mostly relating to property developments.
Mr Justice Peter Kelly, who manages the Commercial Court list, noted that, in one case by Anglo Irish Bank, the bank had in its legal claim sued for €3 million when the sum involved was €9 million.
The judge said an error of €6 million was suggestive of carelessness and there was “a lot of that” in High Court actions brought by banks, said. If a claim was for €9 million, that should be the amount specified in the summons, he said.
Anglo “can’t spell principal either”, the judge remarked, referring to a document where principal was misspelt as the “principle” sum advanced. However, that error was “not fatal”, he added.
The judge had in another recent case referred to the “sloppy” manner in which proceedings by Allied Irish Banks were brought arising from unpaid loans of some €550 million to companies in the Zoe Developments group.
The judge was today dealing with proceedings by Anglo against Michael McKenna, of Killahan, Abbeydorney, Co Kerry, in which the bank is seeking summary judgment for €9.3 million over loans to Mr McKenna himself and also arising from his alleged guarantee of loans made to a company, Moormac Developments Ltd.
The bank claims Mr McKenna has provided guarantees over loans to Moormac and some €3.1 million was due and owing by the company by June last that remained unpaid. It also claims Mr McKenna had failed to repay a loan of some €5.9 million
advanced to him personally in August 2008. It alleges some €9.3 million is now due and owing.
It also claims it has made extensive efforts to solve the issues through negotiations with Mr McKenna, including talks about the possible sale of a property at Ballybunion, Co Kerry, to raise funds. It had recently become clear the matter would not be resolved without court proceedings, the bank said.
The bank also said the National Assets Management Agency (Nama) had on July 6th last issued a direction to the five participating institutions in Nama, which include Anglo, that Nama must approve any action in relation to any individual debtor’s personal guarantee which has an impact greater than €1 million.
The bank had asked Nama was such approval required when it had already issued judgment proceedings and had been informed Nama approval was not required in such circumstances, it said.
Counsel for Mr McKenna argued there remains an issue whether the proceedings could be brought without the prior approval of Nama.
Mr Justice Kelly said there was “a good deal of sloppiness” by the bank in its presentation of the legal papers where €3 million was described as the claim, rather than the actual €9 million involved. Such an error “is negligence, nothing more or less”, and such errors should not be occurring, he said.
While it was argued the bank had delayed bringing the proceedings, the judge said he would transfer the case to the Commercial Court and would list the summary judgment application for hearing in December. He was not very impressed with the defendant’s arguments related to the Nama issue, he added.
