Supreme Court Dismisses Appeal Over €11.4 Million Judgment
In a meaningful ruling, the supreme Court has rejected a man’s attempt to overturn a €11.4 million judgment against him. The court steadfast that the individual,John kelly,failed to provide sufficient evidence to support his claims of illegality on the part of his creditor,Cave Projects Limited.
Writing for the five-judge panel, Mr. Justice Gerard Hogan explained that Kelly did not raise concerns about alleged credit servicing practices by Cave Projects in a timely or effective manner during proceedings in the High Court.
“the issue cannot be raised on appeal without exceptional circumstances, which do not arise here,” stated Mr. Justice Hogan.
Kelly, an auctioneer and estate agent from Athenry, County Galway, attempted to introduce a Central Bank press release to the Court of Appeal.The release, issued in September 2023, asserted that Cave Projects was operating without proper authorization from the Central Bank to provide financial services.
“The central Bank believes Cave Projects is engaged in the provision of credit servicing in the State without holding Central Bank authorisation as a credit servicing firm,” stated the release. It went on to clarify, “It is a criminal offense for an unauthorised firm to provide financial services in Ireland that would require an authorisation.”
However, the Court of Appeal concluded in October 2023 that the issue of Cave Projects’ authorization was not raised in the High Court, nor was any evidence presented. Cave projects objected to the introduction of this issue, arguing it was purely regulatory and irrelevant to the case.
This legal battle stems from a €12 million loan issued by Bank of Ireland in 2007 to a partnership, including Kelly, for development land in Limerick, Clare, and Galway.The loan was secured by charges on various properties owned by all partners.
In 2011, the bank demanded repayment and initiated proceedings against the partnership.Later that year, Nama issued a notice to acquire the debt and security. A loan asset sale deed was subsequently executed by a Nama entity with Cave Projects in 2013.
While the other partners settled their court proceedings, Cave Projects replaced the bank as plaintiff, securing a €11.4 million judgment against Kelly, the sole remaining defendant.
The Supreme Court agreed to hear Kelly’s appeal, focusing solely on how courts should address assertions, supported by credible evidence, that loan recovery efforts are unauthorized and potentially illegal.
Kelly argued that the Court of appeal erred in refusing to accept the Central Bank statement, claiming it rendered the debt contract unenforceable as Cave Projects lacked authorization from the regulator. Cave Projects countered that, even if they engaged in credit servicing, it wouldn’t invalidate the judgment or their right to pursue legal action.
Mr. Justice Hogan emphasized that the Central Bank’s notice “did not change the legal position, but simply recorded the opinion of the regulator.” He further stated, “It is unclear whether the definition of credit servicing, as set out in the Central Bank Act of 1997, extends to the prosecution of actions for recovering debt, still less that it applies to proceedings of this nature, which were already in being by the time key amendments occurred in 2015, 2018, and 2022.”
Ultimately, the Supreme Court, lacking access to potentially crucial evidence, was unable to be convinced by Kelly’s arguments. The court concluded that he failed to demonstrate persuasive and complete illegality.
