In 2010 James Fagan, as a director and shareholder of Chevas Securities Ltd borrowed €10 million from Ulster Bank to purchase properties in Dublin, Sligo, Dundalk and Galway.  The borrowings were secured over a large number of properties, in particular 28 apartments known as Royston Village in Kimmage, Dublin.  The borrowings were restructured in September 2013 and in 2015 Ulster Bank transferred them to the Seaconview DAC,  Last year, Seaconview DAC demanded repayment of the outstanding amount on the borrowings.  Seaconview DAC subsequently appointed a Receiver over the secured assets in December 2017, Anne O’Dwyer of Duff and Phelps..

Seacconview DAC applied to the Commercial Court for summary judgment for €9.7m. represented by Rossa Fanning SC.  Mr Fagan opposed the application saying that Chevas Securities Ltd had reached an agreement with Ulster Bank whereby the loan ceased to be immediately repayable on-demand facility.  Mr Fagan further argued that because Seaconview DAC agreed with Chevas Securities Ltd in May 2016 to accept €30,000 monthly repayments, funded by rents from the properties, there was no breach of his obligations and no default in the loan repayment.  That same agreement did not include a term that the borrowings were repayable on demand.

Seaconview DAC denied there was any such agreement for conversion of the on-demand nature of the loan. The May 2016 agreement was for a €45,000 monthly repayment. Mr Justice Twomey said Mr Fagan’s “bald assertions” about the conversion of the “on-demand” nature of the loan, “flies in the face of the documentary evidence”.

Seaconview DAC and Receiver Anne O’Dwyer of Duff and Phelps sought an Injunction preventing the Defendants from interfering with the receivership or trespassing at the properties. The Injunction was also sought against Mr Fagan’s son, Conor Fagan.

On the 11th July 2018, the High Court granted Summary Judgment for €9.7 million. Further, Mr Justice Michael Twomey also granted an Injunction preventing James (Seamus) Fagan and his son Conor Fagan from interfering with a Receivers access to two apartment blocks in Dublin which were used as security for the borrowings.

The common areas around those apartment blocks were in the name of another company (New Vision) which is controlled by James Fagan, and it was claimed that the Receiver was not entitled to use these areas to access the apartments. The judge said the balance of convenience supports an Injunction preventing the Defendants from prohibiting access.

The Injunction also requires the Defendants not to make unlawful approaches to tenants regarding non-payment of rents to the Receiver.  The rents are to be lodged in a ring-fenced account pending the full trial of the action.

Rose Murphy is a Solicitor in the Commercial Department of FitzGerald Solicitors, 6 Lapps Quay, Cork.

TEL:         +353 (0)21 4279800
FAX:        +353 (0)21 4279810

EMAIL:    
RoseMurphy@fitzsols.com
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www.fitzsols.com

Please note the foregoing article does not constitute legal advice and you should contact your solicitor for specific advice tailored to your circumstances.

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