Bank to seek repayment of €36m loan to businessman at full hearing

THE COMMERCIAL Court has agreed to overturn a €36 million summary judgment order granted last month to Irish Bank Resolution Corporation against businessman John Morrissey. The bank’s case against Mr Morrissey will now go to a full hearing.

The summary judgment order automatically came into effect last month as a result of delays in filing of Mr Morrissey’s defence to the bank’s claim. He argued the delays were not his fault but were attributable to his then lawyers and he sought to vacate the judgment.

Last week, Mr Justice Peter Kelly agreed to put a stay on the registration of the judgment order on condition that another order was made restraining Mr Morrissey from reducing his assets below €36 million or entering bankruptcy or other arrangements with his creditors.

The judge allowed €2,500 for Mr Morrissey’s living expenses, plus funds for reasonable legal expenses, pending the matter coming back before him yesterday when the bank urged the judge not to vacate the judgment. Mr Morrissey’s new legal team argued he should have an opportunity to make a defence.

Having heard from the sides, the judge agreed to vacate the €36 million judgment and to accept the defence and counter-claim – one of the terms was that Mr Morrissey provide a full statement of his assets and liabilities.

Mr Morrissey is also not allowed to dispose of any assets worth more than €10,000, unless the bank agrees to it, or enter bankruptcy or other arrangements with creditors.

IBRC (formed after the transfer of the business of Irish Nationwide Building Society to Anglo Irish Bank) brought the proceedings against Mr Morrissey over loans allegedly due for repayment in July 2009. Earlier this year, the bank appointed a receiver concerning secured assets of Mr Morrissey and his wife, Carol Nolan, including about 18 properties in Dublin.

On November 21st, the IBRC secured the €36 million judgment order against Mr Morrissey over his failure to comply with court orders requiring delivery of his defence and counterclaim. The defence was to be delivered in September but did not arrive.

Mr Justice Kelly allowed more time to file the defence but made an order stipulating that, unless it was delivered by 2pm on November 21st, judgment would automatically enter. The defence was delivered shortly after the deadline and judgment was duly entered.

In his initial defence and counterclaim, delivered five weeks late, Mr Morrissey denied receiving €36 million in loans and claimed he did not have to repay it due to the bank’s conduct in collapsing the Irish property market and economy. He also claimed €140 million damages from the bank on grounds including suffering a brain haemorrhage while under the stress of dealing with it.

Mr Justice Kelly described the denial of loans as “nonsense” and warned Mr Morrissey he must provide a properly pleaded defence.