The Commercial Court today refused to give summary judgment against 3 Limerick solicitors to pay Anglo Irish Bank over €63m resulting from personal guarantees on outstanding property loans. It has ordered full trial on the validity of what the solicitors have called "form filling exercises." 

Partners Dermot O’Donovan, Michael Sherry and Aidan Frawley  in the firm Dermot G O' Donovan and Partners, argued that they had been given assurances by senior executives at the bank that the guarantees would never be called in. Mr Justice Peter Kelly ruled that the matter should go to trial.

The three men say assurances were given by the bank that personal guarantees on loans were "form-filling exercises," that would never be enforced. Their counsel denied accusations by Anglo that this was a far-fetched defence.  The guarantees arose from loans of €165m to companies and partnerships linked to the Limerick based Fordmount Property Group.

In June, a fourth partner in the O’Donovan firm, Thomas Dalton, consented to summary judgment against him for €21.4m.

Mr Justice Peter Kelly said he was refusing summary judgment because of another ongoing case due to be heard early next year involving their co-guarantor, Michael Daly, who is being pursued by Anglo for €80m over the same loans.

In the separate proceedings Fordmount's Managing Director, Michael Daly, also claimed he had been told by Anglo that personal guarantees would not be relied upon which was found by another judge to be a sufficient defence to allow the matter go to trial.

Mr Justice Peter Kelly has decided to follow suit and has refused Anglo's bid for summary judgment against the solicitors.

The judge said there was "a risk of injustice being perceived to be done," if he had not adjourned this matter for a full hearing, since Daly's case was proceeding to full hearing, and his credibility was pivotal to the success or otherwise of the three solicitors' cases.

He said his decision to refuse summary judgment was not a warranty as to the strength or ultimate success of the three men's cases, but he had taken the decision because he was unable to say that they had no bone fide defence.