The brothers behind the collapsed Taggart property empire must wait to see if they face a civil trial over a £5m personal guarantee they signed a year before their company went bust.
Michael Taggart, who owned 51% of the business, yesterday faced lawyers from Ulster Bank over personal guarantees given before the company went into administration in October 2008 owing £300m.
In a hearing before Master Kelly at the High Court in Belfast, Mark Horner QC for Ulster Bank and Michael McLaren QC for the Taggarts laid out their basic arguments.
Mr McLaren told the Master that in June 2007, the bank stopped cheques worth £200,000 made out by the company and said they would withdraw their support unless the brothers signed personal guarantees.
But they say they were led to believe that the guarantee would expire within months and as soon as some of their assets were restructured.
The Taggarts, who are separately bringing a £120m claim for breach of contract against the bank, also claim they were in discussion to have the guarantee reviewed every three months — and that they believed the £5m replaced another guarantee for €4.3m on land at Kinsealy in north Dublin
But the bank says the August 2007 guarantee was separate.
Master Kelly withheld judgment and will give a written decision on whether or not the Taggarts will have to repay the debt or not, or if the case should go to trial.
Other points before Master Kelly included whether or not it was made clear if the personal guarantee was temporary or not, whether the brothers understood what they were signing, differences between the two personal guarantees and inconsistencies in affidavits.
Master Kelly said “one could not fail to be impressed by the scale of the Taggart operation” but asked if their situation could not be compared to that of an individual corner shop owner.
He also compared the claims of ‘discussions’ between the bank and the Taggarts on the three-month review of the guarantee to a child asking for permission to stay up past his bedtime, but still being told ‘no’.
Mark Horner said Michael Taggart had “toured the British Isles in his personal helicopter” and that the brothers were “sophisticated users of financial services”.
But the brothers’ lawyer said any inconsistencies in affidavits were because they “did not have access to all of their paper or electronic documents because of the administration”.
He added that his clients had changed their affidavits when they realised they had made mistakes and were “being very frank and honest”.
“We submit that any inconsistencies are minor, peripheral and were corrected by Michael Taggart and John Taggart themselves,” he said.
At the height of the boom Michael and John Taggart from Dungiven, Co Londonderry, featured on the Sunday Times Rich List and owned a multi-million property portfolio spanning Britain, Ireland and the Isle of Man.