DCSIMG

Developer’s wife to defend £31M lawsuit

The Linen Green was formerly part of the Dolan property empire

The Linen Green was formerly part of the Dolan property empire

The wife of a Co Tyrone pharmacist turned property developer today secured High Court permission to defend a bank’s claim against her for more than £31 million in personal guarantees.

Jacqueline Dolan was granted an order setting aside default judgment for the Irish Bank Resolution Corporation.

She was held to have established a potential defence to the claim based on the alleged undue influence of her husband Peter Dolan.

The couple were directors in the Dungannon-based development company Jermon Ltd.

Despite rapid growth in the retail and office property sectors the firm was hit hard when the market crashed.

In 2011 it was placed in administration with debts of £100m.

Later that year IBRC obtained default judgment against Mrs Dolan for £31.6m it claimed over a personal guarantee from 2008.

Contesting that order, she argued that she became a director in the company at her husband’s request but held the post in name only.

Mrs Dolan stated that she had worked as a teacher at in a secondary school and took no note of the firm’s finances beyond what Mr Dolan told her.

In November 2009 she was allegedly told by her husband that the bank required them to enter into personal guarantees, the court heard.

An affidavit submitted by her stated: “I was not at all happy about being required to sign a personal guarantee, but nevertheless I was persuaded against my better judgment to do so because Peter told me the company was under significant financial pressure, and the loan facility was vital to its ability to continue to trade.

“At the time I was not aware of the full extent of the company’s borrowings, nor was I told, or did I realise, that the guarantee was actually for a sum of £39m.”

Recalling that it was signed at a solicitors office in Belfast, she claimed to have received only a general explanation about the potential adverse consequences.

No separate legal advice was given about the extent of the guarantee or her full potential personal liability, she claimed.

“I realise that the agreement does contain an express acknowledgement above the signatures, but to be candid I simply signed where I was asked to, below my husband, and our signatures were witnessed,” she added.

Ruling on the application, Master McCorry stressed that he was only assessing whether Mrs Dolan had raised an arguable defence with some prospect of success.

Although the bank argued there was evidence that she was an experienced businesswoman with direct and personal knowledge of the company and its finances, Master McCorry said he was not trying the factual issues.

“Whatever reservations this court may, or may not have, as to the reliability of this defendant’s account, they are not such that the court could or should, without very strong reason, at this stage hold that her entire evidence is unreliable,” he said.

“That being so it follows that this court must at this stage, conclude that the defendant has done enough to satisfy it that she has an arguable defence based upon undue influence, and set aside the default judgment, and give leave to defend on that issue.”

 

Comments

 
 

Back to the top of the page