Supreme Court dismisses appeal by Donegal developer over €9.2 judgement

December 19, 2019

The Supreme Court has dismissed an appeal by a Co Donegal property developer over a €9.2 million judgment granted against him arising from guarantees over unpaid loans to his building company.

The judgments addressed what a bank must do to prove debt and Mr Justice William McKechnie strongly disagreed with the majority view that the courts may, in certain circumstances, draw inferences from a customer’s silence in response to a bank’s claim.

In the context of banker and customer, it is “notorious” that, for the vast majority of people, the relationship “is not based on an equal footing” and the “recent public scandal about tracker mortgages verifies this point”, he said.

Bank of Scotland plc sought judgment against Charles Fergus, Ceol na Mara, Tullan Strand, Bundoran, over alleged guarantees provided from 2004 to 2006 over loans to his building company, Fergus Haynes (Developments) Ltd.

After a demand for repayment in September 2008 was not met by the company, it appointed a receiver over its assets and took proceedings against Mr Fergus arising from the guarantees.

In 2012, the High Court’s Ms Justice Mary Finlay Geoghegan was critical of the bank’s conduct of the case, saying it was “extraordinary” for a bank to commence proceedings seeking judgment on 17 guarantees, contending he was liable on each guarantee for the full amount of the judgment when many of the guarantees were patently unenforceable.

As Mr Fergus had not himself given any evidence and had not denied a signature appearing to be his was in fact his, the judge accepted he had signed four original documents sought to be relied on by the bank.

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