A fund has won its application for €2 million summary judgment orders against Independent TD Mick Wallace over his guarantee of a loan given by Ulster Bank to a company of his. A three month stay applies on execution of the judgment order.
At the Commercial Court today, Mr Justice Brian McGovern ruled the Promontoria (Aran) Ltd fund — the Irish subsidiary of US fund Cerberus — was entitled to summary judgment after finding Mr Wallace had raised no arguable defence to the claim.
He entered judgment for €2 million, the maximum amount of Mr Wallace’s liability under his guarantee of the debt of his company, M & J Wallace Ltd, and also awarded costs against Mr Wallace.
Stay on execution
The judge granted a stay for three months on execution of the judgment order to facilitate a calculation of the sum due under Mr Wallace’s guarantee in the event of an expected sale of a property at Dublin’s Ormond Quay.
He would not grant a stay on entry of the judgment, he said.
Stephen Walsh BL, for Mr Wallace, had sought a stay of some three or four months on the judgment order on grounds of the personal circumstances of his client.
The stay application was a plea for “the type of practical and sensible justice” that operates in the courts, counsel said.
Mr Walsh said ACC Bank has had a €20 million judgment against Mr Wallace for four years and had recovered little of that.
If this fund thought it would “leapfrog” ACC and “snaffle” some asset, it was “naive in the extreme”, he said. There was “nothing” there to execute the judgment against.
There was also an application to wind up M & J Wallace, founded in 1970 by his client’s father, which was for hearing on February 15th, counsel said. Mr Wallace had to direct his attention to that matter which had an emotional significance for him.
General election
Mr Wallace is also putting himself forward for re-election and will be campaigning in the forthcoming general election expected to be held on February 26th, counsel said. It was also a practical consideration Mr Wallace may be “jockeying” in post-election negotiations.
Counsel agreed with the judge the TD had to be re-elected first.
An expected sale of a restaurant property on Ormond Quay, on which the fund held security, would also reduce Mr Wallace’s liability, he said. That sale would have a positive impact in relation to Mr Wallace’s overall indebtedness.
Paul Gardiner SC, for the fund, said this was a “very unusual” stay application and Mr Wallace had already effectively had a stay for three months. The debt of the company will be reduced below €2m by the property sale but that sale would not extinguish the debt, he said.
The other factors amounted to an argument Mr Wallace was “too busy” to deal with this matter but were not reasons for a stay. The TD would suffer no prejudice by entry of the judgment because he is not paying anything, he argued.
It seemed Mr Wallace was just saying he was not paying either ACC or Promontoria, counsel said.
Mr Wallace was not in court today.
Arguable defence
In arguments last week opposing summary judgment, Mr Wallace had contended he had an arguable defence entitling him to a full plenary hearing. Among his grounds was that the fund had not been validly assigned the €2.1 million loan advanced in 2009 by UIster Bank to M & J Wallace.
He also argued the summary judgment move was “premature, unfair and oppressive” and the fund should await the outcome of the receivership it put in place last year over an asset of his company.
The planned sale of a property at Dublin’s Ormond Quay — the Taverna di Baccio restaurant — would reduce the debt and the fund should await that, he said.
Promontoria (Aran) maintained there was a valid assignment of the Ulster Bank loan and none of the other matters advanced amounted to a defence to summary judgment.
In his decision, Nr Justice McGovern said Mr Wallace had not disputed the €2.1 million was loaned to his company or that he had executed a guarantee of that, limited to €2 million. Nor had he disputed the company had not repaid the loan after a demand for repayment issued.
Evidence
There was “clear and uncontradicted evidence” to show a valid assignment of the Ulster Bank loan to Promontoria, he found.
The judge added he could not ignore it was the fund that appointed a receiver over the property at Ormond Quay and Mr Wallace’s company had not disputed the validity of the receivership.
The evidence adduced by the fund in support of summary judgment was “clear and ambiguous” and was either admitted by Mr Wallace or not disputed on any legal and factual basis which met the test required for a full hearing, he ruled.
In a statement issued on Friday evening, Cerberus welcomed the ruling, which it said “acknowledges our committed efforts to engage with Mr Wallace on his debts over the last year.”
The company continued: “The facts of this case are beyond dispute and it is regrettable that the only way we could address this borrower was through the courts.”
