This case concerned an application for summary judgment against the Defendant for non-payment of loans pursuant to various facility letters.
The Defendant argued that he was a consumer under the Consumer Credit Act 1995 and that KBC Bank Ireland PLC (the Bank) had not complied with the provisions of that Act.
In 2002 and 2004, various facility arrangements were put in place in favour of the Defendant for the purpose of refinancing existing debt and for development works to be carried out on units in Gorey Business Park, Co Wexford. By 2007, just over €7,000,000 was been drawn down pursuant to those facility letters.
During the period from 2009 to 2014, the Bank had engaged with the Defendant with a view to revising payment schedules and capitalising outstanding arrears. The Bank had requested, pursuant to the facility letters, that certain assignments of leases be put in place but no assignments were forthcoming. In addition, the Defendant had failed to apply rental income against the debts due to the Bank. In November 2014, the Bank issued a "reservation of rights" letter and as the Bank was thereafter unable to reach a consensual agreement with the Defendant, the Bank issued summary proceedings in 2015.
Was Mr Osborne a consumer?
The judge noted the following:
- The loan documentation clearly indicated that the lending was for commercial purposes;
- The Defendant had warranted under a facility letter that "he is availing of the facility in connection with his business or profession as a Business Park Proprietor and, accordingly, he is not borrowing as a consumer for the purposes of the Consumer Credit Act 1995".
The Defendant relied on a recent judgment in ACC Loan Management Ltd v Browne and Anor  IEHC 722 in which the Judge concluded that a person is a consumer unless it can be clearly shown that the person is acting within the remit of that person's business.
The Judge in this case respectfully disagreed with the above judgment and in considering the commercial nature of the lending between the parties and the clear terms of the facility documentation, the Judge rejected the contention that the Defendant was a consumer and granted the order for summary judgment.