Court of Appeal dismisses appeal against High Court order requiring partner to repay partnership loan.

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THE COURT OF APPEAL

Court of Appeal Record No.: 2024/190

High Court Record No.: 2018 1468 S

Neutral Citation No.: [2025] IECA 200

Whelan J. Binchy J. Pilkington J.

BETWEEN/

MARK FORAN

PLAINTIFF/

RESPONDENT

- AND -

WILLIAM FLOOD AND MICHAEL HUGHES

DEFENDANTS

(MICHAEL HUGHES, SOLE APPELLANT)

JUDGMENT of Mr. Justice Binchy delivered on the 10th day of October 2025

1. The parties hereto were members of a partnership formed in 2006 for the purpose of developing lands owned by a fourth member of the partnership, a Mr. Joseph Hughes, who is a brother of the second named defendant. The first named defendant is the son-in-law of the second named defendant, although at the time of the events giving rise to the proceedings he had not yet married the second named defendant’s daughter. By these proceedings, the plaintiff seeks recovery of sums that he paid on behalf of the defendants in order to implement a settlement of proceedings brought by ACC Bank plc (hereafter “ACC”) against the members of the partnership. In a judgment delivered on 22nd March 2024, the High Court (Barr J.) found in favour of the plaintiff, and in an order of 24th April 2024, perfected on 4th July 2024, he ordered that the plaintiff do recover as against the first named defendant the sum of €138,112, and as against the second named defendant the sum of €62,863. This judgment is concerned with an appeal from the judgment of the High Court brought by the appellant only, whom I shall hereafter refer to as the appellant, and I shall accordingly refer to plaintiff hereafter as the respondent.

2. The background to the proceedings may be summarised as follows. On 31st January 2006, the parties to these proceedings, together with Mr. Joseph Hughes (brother of the second defendant) entered into a written partnership agreement with a view to applying for planning permission to develop for housing lands owned by Mr. Joseph Hughes at Crannagh Beg, Athlone. At the same time, the partnership entered into an option agreement with Mr. Joseph Hughes to acquire the lands concerned, which at the time were zoned for residential development, for the sum of €6m. The intention of the partnership was to dispose of the lands to a third party having obtained planning permission to construct a housing development thereon. With such a planning permission, it was estimated that the value of the lands would increase to €12m.

3. The respondent and the defendants each invested €63,500 in the partnership which was applied towards the cost of securing planning permission to develop housing on the lands. It was agreed that Mr. Joseph Hughes would not have to make any contribution to partnership expenses, effectively in consideration of the grant by him to the partnership of the option over his lands. Planning permission for a housing development comprising 212 houses, 6 retail units and related facilities was granted on 1st November 2006. However, a third party appealed the grant of permission to An Bord Pleanála, which gave its decision, reversing the

decision of the planning authority on 8th December 2009, by which time the onset of the financial crisis had, in all probability, rendered the project unviable. In any case, the decision of An Bord Pleanála put the matter beyond any doubt. The purpose for which the partnership had been formed was no longer capable of fulfilment.

4. Between the grant of permission in November 2006 and the overturning of the same in December 2009, the partnership had applied to ACC for a loan in the amount of €1.54m. Loan approval in the amount of €1.26m issued in February 2008, and the loan was immediately drawn down in full. The loan application form was signed by the defendants on behalf of the partnership. The purpose of the loan is a matter of some controversy, and I return to that issue in due course. Immediately following the drawdown of the loan, the respondent and Mr. Flood, using the proceeds of the ACC loan, each drew down a loan from the partnership in the sum of €250,000 for purposes unrelated to the business of the partnership. These loans were drawn down by way of cheques on the partnership account, which cheques had been signed by the defendants, although the appellant claims – and his evidence in this regard is not disputed – that as a matter of convenience he had signed blank cheques on behalf of the partnership which he trusted the first named defendant to complete for appropriate purposes. In a nutshell, these monies were required so that the respondent and the first named defendant could complete, as a matter of urgency, the purchase of properties in Dubai in respect of which each of them had already advanced of the order of €490,000. They had been made aware that the promoters had fraudulently over-sold the development, i.e. had sold more units than were to be constructed, and they had been advised that they should complete the transactions as a matter of urgency in order to ensure they each actually acquired a property, and did not lose the sums they had already invested. To do this, they each needed to borrow €250,000, and they did this, as the High Court judge concluded at para. 54 of the judgment under appeal, by “leveraging the credit of the partnership”.

5. Using the loans drawn down by them from the partnership, the respondent and Mr. Flood were successful in acquiring the units they had agreed to purchase in Dubai. They subsequently disposed of those units at a profit, which they treated as their own and each applied this profit for their own purposes. In the course of the hearing in the High Court, it emerged that this profit was of the order of €230,000 each.

6. Soon after drawing down the sum of €250,000, the respondent drew down a further loan of €100,000 for a different purpose, and the appellant herein drew down the sum of €69,950, which he claims was not a loan but rather a reimbursement of the investment of €63,500 he had made in the partnership of €63,500. Over the course of time, the respondent repaid the loans drawn down by him in full, a fact which is accepted by the appellant. However, for reasons which will become apparent, the appellant has declined to do so. Likewise, Mr. Flood has failed to repay in full the loan drawn down by him, although, as will become apparent, the amount that he owes to the partnership has been reduced with the aid of a contribution of €130,000 from his mother.

7. These proceedings are concerned with the liability of the parties hereto amongst themselves for the indebtedness of the partnership to ACC arising out of the loan. On 14th May 2015 ACC had issued summary judgment proceedings against all four members of the partnership, whereby it sought joint and several judgments in the sum of €853,223.96, as against all members of the partnership. Those proceedings were settled for the sum of €390,000, following negotiations between the respondent only and ACC. The defendants chose not to participate in those negotiations. The settlement amount was discharged by the respondent (who paid €260,000) and Mrs. Rose Flood, who paid €130,000 on behalf of her son, the first named defendant.

8. Prior to the settlement with ACC, the respondent had procured payment to ACC of €858,506, the bulk of which was made up of a payment of €496,000 made from the proceeds of the ACC loan which had remained in the partnership account from the time of drawdown of the ACC loan. So, when taken together with the settlement proceeds of €390,000, it is apparent that ACC received the total sum of €1,248,506 in repayment of a loan advanced to the partnership in the sum of €1,266,000. In other words, ACC made a loss of €17,494 on the capital sum advanced. The respondent confirmed in his evidence in the High Court that ACC received no payments in respect of interest or surcharges.

The Proceedings

9. These proceedings were issued on 12th November 2018 by way of summary summons. However, the High Court directed a plenary hearing and a statement of claim was delivered on 28th May 2020. In the statement of claim, the respondent claims that, following the

conclusion of terms of settlement with ACC he discharged more than his proportion of the settlement amount, and claims a balance of €141,167.56 as against the first named defendant, and €56,664.87 from the appellant. The respondent claims that the appellant drew down the sum of €69,950 for his own personal use and benefit for purposes unrelated to those of the partnership. In an amended defence delivered by the appellant on an unspecified date, the appellant denies having drawn down the sum of €69,550 for his own use, and pleads that the sum was used in discharge of partnership expenses. It is pleaded that the sums of €350,000 and €250,000 were applied by the respondent and the first named defendant for their own use and benefit and not for the benefit of the partnership and that no account in respect of the application of those sums was provided by the respondent. It is pleaded that this was in breach of Clause 8 of the partnership agreement, which provides: “[a]ll assets used for the purposes of the Partnership business shall be Partnership Property”. It is further pleaded that the transactions were in breach of s. 20(1) of the Partnership Act, 1890, which provides, inter alia, that all property brought into the partnership on “account of the firm, or for the purposes and in the course of the partnership business, are called in this Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.”

10. The appellant also pleaded that the respondent breached s. 28 of the Partnership Act, 1890 in failing to render true accounts and full information of all things affecting the partnership, and it is also pleaded that the respondent breached s. 29 of the Partnership Act, 1890 in failing to account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership or from any use by him of the partnership property.

11. The appellant further pleads that it was the respondent, through misappropriation of partnership monies, who brought about the liability to ACC and that therefore it was the respondent who was responsible for rectifying the same. Therefore, it is pleaded, the appellant was justified in refusing to contribute to the settlement of the ACC proceedings. It is denied that the appellant was liable to contribute the sum of €56,664.87 or any sum to the settlement.

12. The appellant admits to the formation of the partnership for the purpose of taking up an option to purchase the lands of Mr. Joseph Hughes at Crannagh Beg and to apply for and obtain planning permission with a view to selling the property. However, the appellant pleads that the ACC loan facility was negotiated by the respondent and the first named defendant, and that no explanation was given to the appellant as to why it was necessary to draw down such a large sum, which, the appellant pleads, was in breach of the requirements of utmost good faith as required by Clause 12 of the partnership agreement which provides, inter alia, that: - “Each partner shall at all times-

(a) show the utmost good faith to the other Partners in all matters relating to the partnership and shall give a true account of the same when reasonably required to do so by the others;”.

13. The appellant did not bring any counter-claim in the proceedings.

14. While in his defence the appellant denied any liability to the respondent, at the hearing of this appeal he did not dispute the amount claimed by the respondent, i.e. all else being equal, I understood him to accept that that sum correctly reflects his share of the settlement with ACC, although it should be observed at this point that the amount claimed was adjusted during the hearing to €62,863. When asked in cross-examination why he should not pay his share of the partnership losses, the appellant replied that had all the profits made by the respondent and Mr. Flood on their Dubai investments been brought into account, there would have been adequate resources in the partnership to discharge the ACC settlement, without further recourse to the members of the partnership. It was also argued that the appellant should not have to discharge the amount claimed by the respondent on the basis that the respondent, together with the first named defendant, arranged to borrow from ACC far in excess of any needs of the partnership in order to have funds available for themselves personally so as to rescue the investments that they had each made in Dubai.

15. In the High Court, counsel for the appellant argued that by arranging borrowings far in excess of the needs of the partnership, the respondent had failed to comply with his fiduciary duties to his fellow partners, including the appellant, and had thereby exposed them to unnecessary and unexplained risks. Furthermore, it was argued, such consent as the appellant gave to the loans was not an informed consent.

16. The appellant also submitted in the High Court that both the respondent and the first named defendant, Mr. Flood, each made a profit as result of the Dubai transactions, for which each was obliged to account to the partnership, but had failed to do so. The appellant argued that had the respondent accounted for the profit that he made using what the appellant claims were partnership funds, that profit would have been more than sufficient to eradicate any liability of the appellant to the partnership. On the basis of all of the foregoing, the appellant submitted that since the remedy sought by the respondent in the proceedings is an equitable remedy, the Court should refuse him that remedy in circumstances where the respondent had failed to comply with his fiduciary obligations.

17. The respondent accepted having made a profit from the Dubai transaction, as did Mr. Flood. The respondent contended however that the appellant had consented to the advance of the loans to the respondent and Mr. Flood from the proceeds of the ACC loan, and that the respondent had repaid the loan made to him in full. The respondent denied the appellant’s contention that he, the respondent, misled the appellant or that he made a “secret profit” as that term is sometimes used in the context of partnerships such that he had an obligation to remit any profit that he made on the Dubai transaction to the partnership. The respondent submitted that his only obligation was to repay the loan to the partnership, and that he had complied with this obligation, and that he is entitled to recover from the defendants their unpaid share of the settlement with ACC, which he has discharged on their behalf.

Judgment of the High Court

18. At para. 49 of his judgment, the High Court judge reached an important conclusion regarding the ACC loan as follows: - “49. The court does not accept the evidence of the plaintiff and the first defendant, that this loan was taken out by the partnership for the purpose of dealing with the appeal before ABP and/or for purchasing the objector’s lands.”

19. The Judge explained this conclusion in the subsequent paragraphs, firstly noting that by the time the ACC loan was taken out in February 2008, the partnership had already obtained planning permission for the development and it was anticipated that additional expenses in connection with the third party appeal of the grant of permission to An Bord Pleanála would come to approximately €80,000. Even though no evidence was provided in relation to those expenses, the Judge observed that assuming that that figure was broadly accurate, it could not justify the taking out of a loan that was over 10 times greater than the amount needed to resist the objector’s appeal to An Bord Pleanála.

20. The Judge also considered, and rejected, an explanation put forward by the respondent in the course of his evidence that the partnership might require the ACC loan funds in order to purchase the lands of the person who had appealed the grant of planning permission. He noted that there was no evidence of any negotiations in regard to such purchase, much less the value of lands. Finally, the Judge rejected as far-fetched a suggestion that ACC would only be prepared to lend an amount of money that was 10 percent of the anticipated market value of the lands, with full planning permission.

21. Having rejected the explanation put forward by the respondent and the first named defendant in relation to the amount of the ACC loan, the Judge then proceeded to express a view on the true purpose of the loan, which in his opinion was to leverage the credit of the partnership so as to obtain a large source of funds that could be used by the respondent and the first named defendant as a temporary source of funding, while they awaited what he referred to as the windfall that would come their way in the event of a positive outcome of the planning appeal.

22. The Judge then considered the impact of his findings on the true nature of the ACC loan on the defence raised by the appellant, and concluded that it had no effect either on the defence raised by the appellant, or on the respondent’s claim in the proceedings. He noted that both defendants had signed the ACC loan application form in which they clearly sought a loan of €1.54m. Since he had signed the loan application form, the Judge held that the appellant could not argue that he did not consent to the loan being taken out by the partnership.

23. The Judge then considered the evidence of the respondent and the appellant in relation to the loans made by the partnership to the respondent and the first named defendant, and he was satisfied that the appellant had given his consent to those loans, noting that the appellant had co-signed the cheques that were made out to the respondent on the account of the partnership. He also noted that the appellant had accepted that he was aware of the withdrawals from the time that he received bank statements in which the withdrawals appeared, and he had made no objection to the same.

24. The Judge accepted the evidence of the respondent and Mr. Flood that they had told the appellant that they had “done well” out of their investments, or words to that effect. The Judge noted that the appellant himself had withdrawn the sum of €69,551 from the partnership account, which he (the appellant) regarded as being a reimbursement of his original investment in the firm. He noted that the appellant had not accounted to the partnership for any profit he had made with these funds, and that this conduct was supportive of his conclusion that neither the respondent nor Mr. Flood had a duty to account for the profits that they had made on the loans they had drawn down.

25. At para. 68 of his judgment, the High Court judge drew all the foregoing conclusions together as follows: - “68. Having regard to the evidence on this aspect of the case, I make the following findings of fact: first, I find that the second defendant was aware that a loan for in excess of €1m had been taken out in the name of the firm; secondly, he was aware that the plaintiff and the first defendant proposed to make withdrawals from the account to deal with issues arising in connection with their Dubai investments; thirdly, he consented to such withdrawals by signing the cheques and by failing to raise any objection to the withdrawals when he received the relevant bank statements; fourthly, he was told later on that the Dubai investments had worked out well for the plaintiff and the first defendant.

26. Having made those findings of fact, the High Court judge then arrived at the following conclusions at paras. 69 - 74: - “69. In these circumstances, I hold as a matter of law, that the plaintiff and the first defendant did not make any secret profit from the use of partnership accounts. The essence of a secret profit is that a partner uses partnership funds or assets without the knowledge of the other partners and makes a profit from the use of such partnership property, which he does not declare to the other partners.

70. There is nothing to prevent partners making a loan of the firm’s money to one of the partners. If that partner makes a profit on the use of the loan received from the partnership, that is not a secret profit for which he must account to the partnership.

71. In this case there was an oral agreement between the parties that the plaintiff and the first defendant could withdraw funds from the partnership account to deal with their problems concerning their Dubai investments. The plaintiff and the first defendant had already invested their own funds in that venture. The second defendant knew that was why they required the additional funds from the firm’s account. The fact that they managed to save their investments in Dubai and to ultimately make a profit on the disposal thereof, does not constitute such profit as a secret profit, for which they had to account to the partnership. Their only obligation was to repay their loans to the partnership account. It is accepted that the plaintiff repaid his borrowings in full.

72. That there was no such duty to account in respect of profit made on such withdrawals, is supported by the fact that the second defendant made a similar, though much smaller, withdrawal from the account in the sum of €69,550, for which he was not asked to account for any profit that he may have made on the use of those funds.

73. I find that in making the withdrawals from the partnership account in the sum of €350,000, the plaintiff was effectively borrowing that sum from the firm. His only obligation was to repay this money. He did that. I hold that he was not obliged to account to the firm for any profit that he made on his Dubai investment.

74. Having regard to these findings, I conclude that there is no substance in the defence raised on behalf of the second defendant.”

27. Having reached those conclusions, the High Court judge granted the respondent judgment against the defendants in the amounts claimed, save that the judgment against the appellant was in the adjusted amount of €62,863.

Grounds of Appeal

28. By his notice of appeal filed on 30th July 2024, the appellant raised eight grounds of appeal. There is considerable overlap between the grounds, and they may be summed up as follows:

(1) The High Court judge erred in law and in fact in holding that there was an oral agreement between the parties that the respondent and the first named defendant could withdraw funds from the partnership account to deal with their problems concerning their Dubai investments.

(2) The High Court judge erred in law and in fact in holding that there is nothing to prevent partners from making a loan of the firm’s money to one of the partners, and if that partner makes a profit on the use of the loan received from the partnership, that is not a secret profit for which he must account to the partnership.

(3) The High Court judge erred in law and in fact in holding that the only obligation of the respondent and the first named defendant was to repay their loans to the partnership account.

(4) The High Court judge erred in holding that his conclusion that the respondent was not under any duty to account to the partnership for the profit that he made using partnership funds was supported by the fact that the appellant had made a similar, although much smaller, withdrawal from the account of the partnership in respect of which he was not asked to account for any profit he may have made using those funds.

29. The respondent’s notice filed on behalf of the respondent on 26th September 2024 is in effect a complete traverse of the appellant’s notice of appeal, and there is no cross-appeal brought by the respondent.

Submissions

30. In the course of his oral submissions to the Court, counsel for the appellant stated that the appellant was not purporting to disturb the findings of fact made by the High Court judge. However, counsel argued that the consent given by the appellant to the drawdown of the funds by the respondent from the proceeds of the ACC loan was not an informed consent, because the respondent did not explain to the appellant in any detail the Dubai transaction, and in particular did not explain to the appellant the risk posed to him in using the proceeds of the ACC loan for the purpose of investing in a property in Dubai. Moreover, it was submitted, this was not the purpose for which the loan sanction had been sought from ACC.

31. It was submitted on behalf of the appellant that the respondent, in failing to provide the appellant with adequate information regarding the Dubai transaction acted in breach of his fiduciary duty to his fellow partners. In support of this proposition the appellant referred to the following passage from Twomey on Partnership, (2nd ed., Bloomsbury Professional)

at para. 15.20 wherein the author states: -

“Some legal commentators have expressed doubt as to whether a partner’s fiduciary duty extends beyond his obligation to exhibit good faith in his dealings with his partners. However, it is contended that a partner’s fiduciary duty should not be so restricted. Rather, it is thought that the term a ‘partner’s fiduciary duty’ encompasses more than simply good faith and indeed that the instances of fiduciary duties set out in this chapter are not exhaustive, but merely examples of the higher duties of conduct which are owed by persons in special relationships, such as that of partners. These duties have been developed by the courts in the exercise of its equitable jurisdiction and include not only the duty of good faith, but also duties such as that of honesty, loyalty, a duty to avoid conflicts of interest, a duty to avoid profiting personally from partnership opportunities/information, a duty to provide full accounts of all information and assets in one’s possession or control and to account for benefits obtained in breach of these duties…. Support for the view that partners’ fiduciary duties should not be restricted to a duty of good faith may be gleaned from the expansive view of a partner’s fiduciary duty contained in the Supreme Court judgments in Williams v. Harris and Meagher v. Meagher. In both cases, the Supreme Court recognised the existence of a fiduciary duty based on the nature of the relationship between the partners, without restricting its application to simply that of good faith. By doing so, the Court has retained the flexibility to extend the duty owed by partners to each other beyond that of good faith as the circumstances require…. Since the parties to a partnership agreement cannot anticipate all the problems that may arise during the life of the partnership, this approach allows the courts to supply general terms to fill in the gaps in the partnership agreement. Therefore, it is apprehended that the courts will require a partner to exhibit the standard of behaviour which one would expect to exist between persons who are in a relationship of ‘equality, mutuality, trust and confidence”.

32. The appellant submitted that the respondent failed to comply with these obligations, in two respects. Firstly, it is said that he failed to provide the appellant with sufficient information to make an informed decision on the respondent’s request for a loan. Secondly, the appellant claims that the respondent had a duty to account to his fellow partners for the profit that he made on the Dubai transaction using partnership monies, and that he breached this duty in failing to do so. The appellant submits that this profit, of which the appellant claims he had no knowledge until the hearing in the High Court, could only be described as a private or secret profit, which was made in circumstances where, had the respondent’s investment of the loan proceeds been unsuccessful, the other partners would have been exposed to a significant loss. While the appellant has made no counterclaim in respect of the profits made by the respondent, this, he says, is because he was unaware of those profits until the trial of the action, and he argues that he is entitled to resist the respondent’s claim on equitable grounds, since the proceedings are grounded upon an equitable right to contribution. While counsel for the appellant acknowledged that a partner who settles a partnership debt is normally entitled to recover from the other partners their pro rata shares of that debt, he submitted that in this instance the Court should not order such contribution having regard to the respondent’s breach of his fiduciary duties to the appellant.

33. For his part, the respondent does not dispute any of the fiduciary principles upon which the appellant relies, although he strenuously denies any breach of his fiduciary duties. The respondents say, simply, that the appellant consented to the partnership making a loan to the respondent and Mr. Flood, and that the only obligation that the loan gave rise to was the obligation to repay the same, with which obligation the respondent has fully complied. The respondent denies having made any secret profit or having any obligation to account for the profits that he made through the use of the loan proceeds.

Discussion and decision

34. In an important concession made during the course of the hearing of this appeal, counsel for the appellant confirmed that he was not seeking to have the court set aside the findings of fact as made by the High Court judge. The most important of these findings are those set out at para. 68 of the judgment of the High Court, which, to recap, were: that the appellant was aware that a loan for in excess of €1m had been taken out in the name of the firm; that he was aware that the respondent and Mr. Flood proposed to make withdrawals from the partnership account to deal with issues arising in connection with their Dubai investments; that the appellant consented to such withdrawals, and; that he had been told subsequently that the Dubai investments had worked out well for the respondent and Mr. Flood.

35. The appellant also accepted that in ordinary course, a partner who has unilaterally settled a partnership debt is entitled to seek recovery from all other members of the partnership of their pro rata share of the debt.

36. It should also be made clear that there is no disagreement between the parties as to the nature of the fiduciary duties owed between parties. The appeal therefore has effectively been reduced to a question of whether or not the respondent breached his fiduciary duties to the appellant, such that the consent that he gave to the loans may not be relied upon by the respondent on the basis that it was not an informed consent. Put another way, the appellant contends that the respondent’s claim for contribution invokes the Court’s equitable jurisdiction, and that he who seeks equity must do equity. Since, the appellant contends, the respondent has breached his fiduciary duties to the respondent, it follows that he has failed to do equity, and he should not therefore be granted the remedy to which he would otherwise be entitled. It must be observed that it is difficult to discern this issue in any of the grounds of appeal.

37. Be that as it may, in advancing his argument that the respondent acted in breach of his fiduciary duties to his fellow partners, the appellant relies upon the High Court judge’s rejection of the explanation given by the respondent for the amount of the ACC loan, and the judge’s conclusion that the real explanation for the amount drawn down was the urgent need of both the respondent and Mr. Flood for funds to “rescue” the Dubai investments. This, the appellant submits, is a clear breach of the fiduciary duties owed by the respondent, and, for that matter, by Mr. Flood, to their other partners.

38. In his consideration of the issue, the High Court judge concluded that while the ACC loan far exceeded the needs of the partnership, this fact was immaterial to the respondent’s claim and the appellant’s defence thereto. He arrived at this conclusion because of the consent that had been given by the appellant to the loans and the fact that the appellant, broadly speaking, understood the reason why the respondent and Mr. Flood needed the funds.

39. In advancing the argument that his consent was not an “informed” consent, I understand counsel for appellant to mean that the risks to all members of the partnership associated with the ACC loan, and the onward loans of a substantial amount of the ACC loan proceeds to the respondent and Mr. Flood, were not adequately explained to the appellant. It must be said that on a review of the evidence, there is nothing to suggest that there was any discussion at all about the risks involved, and, so far as the ACC loan is concerned, the appellant’s evidence was to the effect that while he agreed to go along with a loan application, he did not agree to apply for a loan in the amount that was applied for, notwithstanding that he signed the loan application form. Of course, the High Court judge held against the appellant on this point, and his conclusion that the appellant consented to the ACC loan is no longer under challenge in the appeal.

40. In any case, it does not appear to me that there were any unusual risks associated with the loans, that is to say either the ACC loan to the partnership or the loans from the partnership to the respondent and Mr. Flood, and the appellant did not claim that he did not understand the risks involved in any of these transactions. All loans are subject to the risk that there may be a default in repayment, and the appellant must have known that much at least. Insofar as it is contended that the appellant was provided with insufficient information, this argument was made in general terms only and it is unclear precisely what it is the appellant maintains he should have been informed of by the respondent.

41. The implication of the arguments advanced by counsel for the appellant is that the use to which the respondent was putting the loan in some way or another rendered the loan high risk. To the extent that there is any factual basis for this proposition, it appears to be based upon the difficulty in which the respondent and Mr. Flood found themselves before the partnership made loans to them, that being that that the number of units actually being developed in the Dubai project was less than the number of units sold to investors, and so inevitably some investors were going to lose the entirety of their investment on account of the fraudulent conduct of the promotors. That may well be so, but the legal advice given to the respondent and Mr. Flood was that in order to secure their investments, they needed to advance the balance of the purchase monies, and it was for that purpose that they each needed a loan. The very fact that lawyers were involved in this phase of the investment would suggest that the onward transmission of the loan proceeds for the purpose of the acquisition of the property was subject to legal oversight. While it is no function of this Court to make findings of fact, I make this observation merely to demonstrate that, to the extent that the appellant sought to the characterise the purpose of the loan to the respondent as being high risk, this characterisation does not stand up to scrutiny on the basis of the available information, and in any case the appellant did not lay the ground to support the proposition that the purpose of the loan was high risk or that essential information was withheld from the respondent from the appellant.

42. While it would have been prudent for both the appellant and his brother, Mr. Joseph Flood (who provided the only security to ACC, being a charge over his lands, in respect of the loan) to have taken legal advice before agreeing to make the loans to the respondent and Mr. Flood, the fact that they did not do so or that the respondent did not encourage them to do so is not indicative of any breach of fiduciary duty on the part of the respondent to his fellow partners. On the facts as found, the appellant knew in a general way the purposes for which the loan was required and he agreed to make the loan with all attendant risks. For these reasons, I would reject the argument that the respondent acted in breach of his fiduciary duties to the appellant in the manner in which he secured the respondent’s consent to the ACC loan or the loans from the partnership to the respondent.

43. Moreover, the background against which the appellant gave his consent to the loans is of some relevance in any consideration of this issue. It is hardly insignificant that the appellant, in giving his consent to the loans to the respondent and Mr. Flood, was agreeing to assist a member of his own family by providing financial assistance to the person who was to become his son-in-law. Nor is it insignificant that at the time the partnership was sitting on a paper profit of €6m (subject to the planning appeal). As the High Court judge observed at para. 60: - “The size of the loan was largely immaterial to the plaintiff and the first defendant at that time, because they firmly believed that the planning appeal would be determined in their favour within a short period. At which time, they would have had plenty of funds to repay the loan in full and make a large profit.”

44. The appellant has also argued that the respondent should not succeed in these proceedings because he had a duty to account to the partnership for the profits that he made on the Dubai transaction. To the extent that this argument is grounded upon an asserted breach of the respondent’s fiduciary duties, it falls away in light of the conclusions above.

45. To the extent that the argument relies upon ss. 20(1) and 29(1) of the Partnership Act, 1890, it must also fail in circumstances where the appellant consented to the transaction and, having done so, s. 29(1) of the 1890 Act is not engaged. It will be recalled that s. 29(1) of that Act provides that “Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him of the partnership property name or business connexion.” The facts are that the appellant consented to the use of partnership funds by the respondent for purposes entirely unconnected to the business of the partnership. In those circumstances, the obligation of the respondent, as the High Court judge held, was to repay the loan in accordance with whatever terms were agreed (in this case none were agreed) and, as is apparent, the respondent complied with that obligation.

46. In the course of discussion with this Court, counsel for the appellant was asked if he could cite any authority for the proposition that, where a partnership makes a loan to a partner, there is an obligation on the partner borrowing the funds to account for any profits made through the use of the loan proceeds. Counsel did not cite any authority in support of the proposition.

47. Finally, even taking the appellant’s case at its height, i.e., that the respondent breached his fiduciary duties to the appellant, it is apparent that no loss flowed from the breach. So therefore, the appellant asks the Court to deprive the respondent of an order to which he is otherwise entitled on the basis of the breach alone. The consequence of acceding to the appellant’s argument would have the same effect as an award of damages in favour of the appellant in the sum of the amount claimed by the respondent, leaving the respondent at a loss in the that amount, even though the breach of fiduciary duty relied upon did not result in any loss to the appellant. Moreover, at the level of principle, if the appellant is right, the Court would always be bound to refuse the relief sought by a claimant found to be in breach of fiduciary duties, regardless as to the amount claimed, in circumstances where the party against whom relief is sought has sustained no loss as a result of the breach of fiduciary duty. The appellant has cited no authority for such a draconian proposition.

48. In conclusion, these proceedings have their origin in a property scheme put together by the partnership, which ultimately did not bear fruit. Inevitably, this means that the expenses incurred by the partners in advancing the planning application, and thereafter the third-party appeal to An Bord Pleanála, are lost. The drawdown of the ACC loan has not in any way increased the losses sustained by the partnership, save only to the extent that Mr. Flood has failed to repay his loan in full, which is causing the respondent a loss, but not the appellant. By his defence to these proceedings, the appellant seeks to avoid his liability for his share of partnership losses that he agrees have been sustained on the basis that he agreed to advance a loan to the respondent in respect of which he claims the respondent failed to disclose essential information regarding the risks posed to the appellant, and also on the basis that the respondent failed to account to the partnership for profits that he made using the loan advanced to him by the partnership.

49. That argument was rejected by the trial judge and has again been rejected in this appeal. It may well be that the appellant feels somewhat aggrieved that the respondent has made a profit using partnership funds, while the partnership itself has made a loss, but the respondent’s use of the partnership funds was made with the consent of the appellant and does not in and of itself give rise to any obligation on the part of the respondent to account to the partnership for the profit. In those circumstances, I am of the view that the High Court judge was correct in his conclusion that the only obligation of the respondent to the partnership arising out of the loan was to repay it, and the appellant accepts that the respondent has done so.

50. I would therefore dismiss this appeal. Since the respondent has been entirely successful in this appeal, my provisional view is that the respondent is entitled to an order requiring the appellant to pay his costs, pursuant to s. 169(1) of the Legal Services Regulation Act, 2015. If the appellant wishes to contend for a different order, then he should do so by way of written submissions, not to exceed 1,500 words, to be filed within 14 days from the date of delivery of this judgment. In such event, the respondent shall file any replying submissions he may wish to make, also not to exceed 1,500 words, within a further

14 days. If no indication is received within the 14-day period, the order of the Court, including the proposed costs order, will be drawn and perfected.

51. Since this judgment is being delivered remotely, Whelan J. and Pilkington J. have authorised me to indicate their agreement with the same.