Patrick McKillen Jr says €3m loan was illegal so doesn’t have to be repaid, court told

But the lender, Herbert Street Property Finance Unlimited Company, says Mr McKillen has advanced that claim in bad faith as it was a business loan for an apartment development by a McKillen firm called The Pinnacle in Mount Merrion, Dublin, and not towards his personal purposes which would require authorisation.

Mr McKillen claims, among other things, that Herbert Street Finance entered into the December 2022 loan agreement when it was not a retail credit firm authorised under the Central Bank Act 1997.

The proceedings were admitted to the fast-track Commercial Court on Monday on the application of Bernard Dunleavy SC, for Mr McKillen, and on consent from Martin Hayden SC, for the defendant. Mr Justice Mark Sanfey approved directions for the hearing of the case and adjourned it to October.

The court heard that Herbert Street Finance had already brought bankruptcy proceedings against Mr McKillen in relation to the loan and was seeking judgment against him for €2.14m.

It is claimed that a WhatsApp message referred to ‘your loan from me’

In his statement of claim, Mr McKillen said not only was the defendant not authorised to make such a loan, but it had applied a fixed interest sum of €1m on the €3m loan, or 33.3pc, which was not a genuine pre-estimate of any commercial loss and constituted an unenforceable penalty clause.

He claims that €2.3m of the loan had been paid back.

It is claimed that a WhatsApp message from David Agar, the principal shareholder in Herbert Street Finance, to Mr McKillen last April 11 referred to “your loan from me”.

This was the defendant’s representative understanding that the loan was advanced to Mr McKillen personally and was not part of a business-to-business commercial transaction, it is claimed.

Mr McKillen claims his guarantee on the loan was void and/or unenforceable by reason of illegality.

It is also claimed the defendant materially and irremediably prejudiced Mr McKillen’s right of subrogation as guarantor by its conduct including by not pursuing his company, Cool Dust, to which the loan monies were first advanced.

Herbert Street Finance’s Mr Agar, in an affidavit, said he refuted Mr McKillen’s claims in their entirety.