Developer Bernard McNamara is resisting an application by private investors for summary judgment orders for €96 million against him over his guarantees of the borrowings of a company involved in the €412 million purchase of the Irish Glass Bottle site in Dublin.
Counsel for Mr McNamara and his company Donatex Ltd told Mr Justice Peter Kelly today they will contend the investors, procured by Davy stockbrokers and suing through their Jersey-registered agent, Ringsend Property Ltd, are not entitled to the sum sought because there has been no default by his clients.
Martin Hayden SC said his clients will argue repayment is not due because the investors had invested in the loan stock for a period of seven years up to 2014.
Counsel also argued the investors were at all times aware of a planning risk relating to the development and had assumed that regulatory risk. A High Court decision in another case meant the permission issued by the Dublin Docklands Development Authority (DDDA) was not valid and the reason for the development not proceeding was default by the DDDA.
Counsel said another line of defence and a “major issue” in the case was that Mr McNamara’s guarantee of January 29th 2007 over the borrowings of Donatex related only to the principal sum borrowed and not interest.
The guarantee for €95.8 million was provided to Davy Property Holdings Ltd in respect of Donatex’s liabilities under the local stock instrument and was later assigned to RPL.
Mr McNamara and Donatex may bring a motion to have RPL provide security for the costs of the legal action, it was stated.
John Gleeson SC, for RPL, said Mr McNamara had acknowledged his guarantee of the loan obligations of Donatex.
Donatex was now seeking to rely on pre-contract documents to resist the claim when the contract documents set out the real obligations of the borrower.
On the possibility of a motion for security for costs, Mr Gleeson said Mr McNamara had agreed to indemnify the investors in relation to moves to enforce the guarantee.
Mr Justice Kelly admitted the case to the Commercial Court and listed the summary judgment application for hearing on December 9th.
