The High Court recently considered an injunction application by parties to restrain the appointment of a receiver over property, in circumstances where they maintained that the defendant was in breach of an amended settlement agreement.
Background
The plaintiffs borrowed significant sums from AIB in order to finance the purchase and construction of 56 commercial and residential properties. In February 2016, a Deed of Settlement was entered into between the plaintiffs and AIB where AIB agreed to accept €9,850,000 in full and final settlement of all loans due by the plaintiffs, provided the figure was paid by 30 June 2016. The plaintiffs were also required to make interim payments of €50,000 per month pending the repayment date of 30 June 2016.
The Deed of Settlement contained a provision that any variation of the Deed would not be effective unless in writing and signed by the parties. The extension of the repayment date was extended twice by agreement between the parties, first to 30 December 2016 and then to 30 July 2017. The extensions were not agreed in writing. The plaintiffs claimed that a third amendment was agreed in June 2017, extending the repayment date indefinitely, provided the plaintiffs continued to make the interim monthly payments.
In June 2019, Everyday Finance purchased the loans in question from AIB. A demand letter was issued by Everyday Finance on 26 November 2019 seeking the sum of €22.8 million. The plaintiffs alleged that in circumstances where they were now able to complete the settlement agreement, the defendant could not rely on the demand letter. The defendant admitted that the first two amendments were made, but deny that the third amendment was made, and asserted that the original Deed of Settlement had expired and could no longer be relied upon by the plaintiffs.
High Court Decision
Mr Justice Quinn held that the plaintiffs had not established the existence of a fair issue to be tried. He found that the evidence put forward by the plaintiffs in relation to the existence of an amended settlement agreement amounted to nothing further than the level of a bare assertion. The plaintiffs contended that the continued making of payments amounted to evidence of an amended settlement agreement and that the payments amounted to part performance of the settlement by the defendant. Mr Justice Quinn found that in the absence of any evidence of the making of an amended settlement agreement at interlocutory stage, the payments were only evidence of the reduction of the debt. Mr Justice Quinn refused the plaintiffs' application for an injunction.
Downes and Howard Limited v Everyday Finance DAC [2020]IEHC 306
