Golf club not required to provide security for defendants' costs in dispute over alleged loan surcharge

Golf Club Not Required To Provide Security For Defendants' Costs In Dispute Over Alleged Loan Surcharge
The Ennis-based club initiated High Court action last March.
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High Court reporters

A Co Clare golf club will not have to provide security for the defendants’ legal costs in a High Court dispute about an alleged surcharge interest of €646,000 on a debt secured over 12 to 13 holes of its green.

In its case, Woodstock Golf and Country Club, Ennis says the surcharge interest represents 66 per cent of the total claim for the principal debt plus 2 per cent Euribor tracker interest. It claims the surcharge is a penalty 6 per cent annual interest and is unenforceable.


Loan service provider Pepper Finance Corporation Limited denies €646,335 is the precise surcharge amount, claiming this figure also includes ordinary interest. It says it is not a penal interest and is lawfully charged.

Regardless of a potential court finding on the enforceability of the surcharge, it says, it would still be entitled to 4 per cent interest under a guarantee signed by Woodstock.

Pepper and receiver Ken Tyrrell, who are defendants in Woodstock’s case, brought a motion asking the court to make the country club provide security, in the form of a payment lodged to the court, for their legal costs, which would need to be paid out in the event the case is successfully defended.

The claims were set out in a ruling by Mr Justice Conor Dignam, who was not satisfied the defendants established a prima facie defence to the claim in relation to the surcharge interest. Therefore, he refused the security for costs application.


The Ennis-based club initiated a High Court action last March over Pepper’s moves to enforce security over some 45 hectares of golf course.

Then, Woodstock’s lawyers, Éanna Molloy SC with Conor Duff BL, told the court the club had 460 members. It was feared membership could “collapse” if the court did not put a stop to the land sale.

Court order

In July, the court granted an order restraining the defendants from taking any further steps in selling the lands until Woodstock’s action has been resolved.

The legal charge over 12 to 13 holes of the green arose out of a 2004 loan from ACC Bank PLC taken out by the now-dissolved Duneside Services Limited, the court heard. The debt was refinanced in 2004, and Woodstock entered into a contract of guarantee and indemnity, which was secured over the golf course lands.


Duneside fell into arrears and Pepper acquired the loan.

Mr Justice Dignam said Pepper issued a letter of demand in September 2020 stating €960,000 was due and must be repaid within seven days. In February 2021, Pepper appointed Mr Tyrrell as receiver over the secured golf course lands, he said.

Woodstock’s managing director, Sheelagh Guerin, contended in a sworn statement that Pepper’s figure includes a suspended surcharge interest of some €646,000. She claimed Woodstock’s guarantee obligation relates only to the principal debt.

It appears ACC Bank began surcharging interest against the loan at 6 per cent as early as 2009 until about 2017 in addition to Euribor tracker interest, she said.


She said Woodstock offered to discharge the capital sum of about €330,000 it says is outstanding on foot of the loan for which it is liable. This offer was not accepted, she said.

Pepper denies any of the interest claimed is an extortionate or impermissible charge.

While not satisfied the defendants established a prima facie defence, Mr Justice Dignam emphasised that his ruling does not constitute a final finding that the surcharge interest amounts to an unenforceable penalty clause.

This is a matter to be determined at trial on the basis of evidence called, he added.

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