No surcharge interest should be included in the redemption figure proposed by the company in respect of loans furnished to the borrower

Contract law – commercial agreement - modular hearing - the figure at which the borrower is entitled to redeem certain loans which are assumed to be vested in the company – borrower was one of the founding shareholders of Blackrock Hospital Ltd (BHL) - health insurer with four doctors put together an investment package to build and develop the Blackrock Clinic – health insurer agreed to sell its shareholding to the borrower and the company - financing for the purchase of the shares was obtained from Anglo Irish Bank – pursuant to the Shareholders Agreement it was agreed that an annual dividend would be declared which would be used to pay the interest on the Anglo loans until they matured, whereupon the entire facility would become immediately due and payable – borrower had two facilities with Anglo - borrowing was secured by a mortgage of his shareholding in BHL – guarantees and cross-guarantees – borrower was advanced the principal amount of €11,188,256 pursuant to the first facility and a further €6,342,000 pursuant to the second facility - facility Letters all fell due for repayment on 31st December, 2010 –company asserts that under General Terms and Conditions which were incorporated into the Facility Letters the lender has an entitlement to an interest surcharge of 4% per annum – bank did not initially demand repayment – bank went into special liquidation – decided to sell the borrower’s loans – borrower asked to redeem his loans – bid was unsuccessful – subsequently the company outbid the borrower to purchase the loans – borrower challenging the validity of this purchase – company demanded repayment - total the sum of €22,879,424 – borrower initiated proceedings – injunction restraining the company from acting on foot of the demand – company subsequently informed the borrower that the redemption figure was much higher than that in the demand - surcharge interest and enforcement costs - redemption issues - whether General Terms and Conditions were incorporated into the Facility Letters – estoppel – whether the borrower relied on representations as to the balance due under the loan facilities at any given time – whether the borrower acted to his detriment – relevant clauses of the agreement – whether the company can contractually claim the redemption figures sought – whether the company as successor in title to Anglo constrained in enjoying such contractual rights, or the amount that it may recover, by virtue of the provisions of the Shareholders Agreement - contractual rights of Anglo under the Facility Letters became vested in the company - redemption figure is not contractually limited to what might or might not be recovered under – whether all or part of the redemption figure is an “unlawful penalty”? - applicable principles governing penalties – relevant caselaw – judicial comity - Banking Evidence - freedom to contract - the surcharge rate of 4% was a generic rate, and not a genuine pre-estimate of loss arising from default - no case in which a bank actually recovered (as opposed to claimed) a surcharge - dominant purpose of the provision - in all the circumstance as judged at the time of the Facility Letters clause 5.1 was a penalty charge, and hence unenforceable – no surcharge interest should be included in the redemption figure proposed by the defendant – whether the company waived its right to claim all or part of the redemption figure - whether the company is estopped from claiming all or part of the redemption figure - questions only arise if the Court was wrong in determining that the surcharge interest is an unlawful penalty - applying only to the surcharge claim and not to the issue of enforcement costs - no evidence that any express representation was made by Anglo/IBRC or the Special Liquidators or the company that surcharge interest would not be applied to the loans – representation may be inferred from conduct or a course of dealing - whether it can be inferred that IBRC/the Special Liquidators would not be charging any surcharge interest – borrower based the amount of his bid on combined loan balances without including any surcharge interest - representation intended to be relied upon by the borrower - IBRC/the Special Liquidators were at the date of assignment to the company estopped from recovering or seeking to recover default surcharge interest – the company is estopped from seeking to recover – company entitled to add surcharge interest to the redemption figure only from the date on which it unequivocally made clear its intention so to do – whether the company can charge “enforcement” costs, charges and expenses – the Court determined that the company can charge but not the sums notified in correspondence – company entitled to only such costs of the modular hearing as may be awarded to the company to be taxed in default of agreement, may be charged and added to the redemption figure - reserved costs, and other possible future or “contingent” costs, may not be charged or factored into the redemption figure –the correct redemption figure – whether the borrower is entitled to any relief in respect of the redemption issues - order stating the present day redemption figure in respect of the borrower’s loans, together with the rate of daily accrual of ordinary interest based on the current EURIBOR rate -