Alex O’Neill Solicitors replies to one of the queries received at Lawlink@alexoneill.ie
Q. One year ago I took out a loan to develop a small apartment block which is now partially built. I have run into financial difficulty and a few months ago received letters from the bank requesting repayment of the loan in full. I have continued making interest payments and am not in arrears. However, I am not in a position to discharge the loan in full. I have now received papers requesting me to file a defence or the bank claim they will obtain judgement against me. What would you advise?
Dear Reader,
A. Debt collection and requests for Judgements against individuals and companies have increased at an alarming rate. When the bank write to you with a demand letter it is of the utmost importance that you respond. If you are served with papers, and it looks like you have been, do not ignore them. Engage a solicitor to act for you. Turn up in Court to defend the proceedings against you. Failure to do this can result in a Summary Judgement i.e. a Judgement in your absence being secured against you.
Recently in the commercial court Mr Justice Kelly gave hope to Defendants in a somewhat similar scenario in that he ruled that well-known property players David Courtney and Bernard Doyle made out “arguable defence” to actions by Barclays Bank who sought judgement against the developers for 9million over non repayment of the full loan on demand.
Rossa Fanning, for the developers argued that Barclays had, by their representations, enticed the developers to move their business from First Active to Barclays and in doing so had indicated to the Defendants that the bank were in the project for the long term. Mr. Rossa was essentially arguing that the banks were prevented from unilaterally withdrawing the loans as a result of their actions and representations.
Mr. Justice Peter Kelly ruled that the Defendants had established an “arguable defence” to the Summary Judgement proceedings.
Most banks are towing the line and trying to work with borrowers to find some solution that is satisfactory to both parties. It is most unfortunate that your bank doesn’t appear to be adopting the same outlook and perhaps in light of recent developments in the commercial court should you return to your bank, they may have a different view on the matter.
I should add that in the above case the Judge did emphasise that he was not stating whether the defences as outlined above would actually succeed at trial. He simply found that there was an “arguable defence”.
Ultimately where persons or companies are issued with seven day demand letters demanding repayment of loans in full every aspect of the bank’s behaviour and indeed the borrower’s behaviour should be examined in detail to see what was set out in the original letter of loan offer and what actually transpired and whether there was any variation to the agreement.
I strongly suggest reverting to the Bank requesting that they hold the proceedings and see if you can come to an arrangement. If not see your Solicitor who can review all papers and if possible defend the action in full.
Gemma Lyons
Your Questions
If you have a legal query that you would like answered you can email lawlink@alexoneill.ie or send your query to Alex O’Neill Solicitors, 22 Barrington Street, Limerick. The column is a reader’s service only. It is not intended to replace professional advice.
