DUP MLA David McIlveen loses £27,000 UPS debt challenge

David McIlveen David McIlveen had disputed a loan he received from Ulster Property Sales

The High Court in Belfast has dismissed an attempt by DUP MLA David McIlveen to set aside a £27,000 debt he owed to an estate agency.

Mr McIlveen received a personal loan from Ulster Property Sales (UPS) in August 2011, but disputed the debt.

The court heard he had agreed to pay 72 £500 instalments, but this ceased after 16 months "apparently without notice".

The judge held that Mr McIlveen had not demonstrated substantial grounds for the debt being set aside.

In 2007, Mr McIlveen and another man had obtained a franchise to run a UPS branch in Ballymena, County Antrim, which involved an annual fee of £7,500 as well as a monthly payment for accountancy and management services.

The branch was affected by the downturn in the property market and by 2010 it had accumulated debt to UPS of up to £75,000.

'Exit strategy'

In November 2010, Mr McIlveen informed UPS head office he had been selected by his party as a candidate in the following year's assembly election.

He told the firm if he was elected, he would enter into a severance agreement with UPS.

"I would cease from being a partner from UPS and become a debtor; however, I am happy for a legal agreement to be in place to pay this back," he wrote.

The judge said it was clear from the emails that Mr McIlveen's "exit strategy" involved him addressing his partnership's debt, with the accommodation from UPS head office needed to achieve this.

Bankruptcy fear

She said that subsequent emails showed "tension began to surface between the parties after Christmas 2010 when it appears that the original lump sums proposed by the applicant on 26 November 2010 were no longer available".

"Consequently, the applicant now proposed to discharge the debt by way of modest monthly repayments which would take around six or more years to repay his share of the debt," she said.

"According to the emails the applicant was clear that his offer to repay the debt by way of monthly instalments was based on his limited financial resources.

"He acknowledged that he had other debts and claimed that if his proposal was not acceptable then his only alternative was bankruptcy.

Start Quote

With his professional background, one would have expected the applicant - perhaps more than most - to understand the serious nature of contracts”

End Quote Judge's comments

"He was understandably concerned that this would cost him his political career."

Mr McIlveen was elected as assembly member for North Antrim in May 2011, and eventually agreement was reached on his debt, with UPS agreeing to grant him a loan, including interest, of more than £35,000, payable by 72 monthly instalments of £500.

"Although it is noted that from September 2011 to January 2013 the applicant did make a total 16 payments on foot of the loan, the email exchange suggests that there were late and failed payments," the judge said.

Mr McIlveen emailed UPS in October 2012 to offer "a £20,000 lump sum payment in full and final settlement of the £27,000 debt, with the funds apparently coming from a third party", but this was rejected.

"They took the view that they could not be expected to simply write off £7,000," he said.

After Mr McIlveen failed to meet his December 2012 payment, he apologised and said it was because he was away over Christmas, but he then also failed to make the next month's instalment.

On 18 January 2013, he informed UPS he would be making no further payments on foot of a loan agreement.

Mr McIlveen wrote: "I currently have both my solicitors and a forensic accountant investigating them and any future payments to UPS by me will only be made upon seeking their advice."

In another email several weeks later, he cited an accountancy firm's analysis of UPS central overheads charges and said he had "concerns about the unclear financial background" of his "arrangement" with the firm.

Mr McIlveen wrote: "I am deeply concerned that having asked for over five years to see the accounts relating to UPS head office that they clearly show costs that I was unaware that we as partners had ever signed up to pay for, in particular the 'central overhead' cost to which the vast majority of our alleged debt relates to."

'Quibbles'

The judge said: "I observe that there is no evidence of the applicant ever having raised the issues now being raised in these last two emails.

"For example, there is no evidence of the applicant having asked for accounts for over five years or at all.

"Nor is there any evidence that between 2007 and 2013 the applicant ever disputed the monthly central overhead charge. That is a great many months.

"Rather, the content of these emails is suddenly and entirely incongruent with the content of applicant's earlier emails to the respondents."

The judge said Mr McIlveen had "advanced a number of disparate grounds for disputing the debt", but he would not address all of them in his judgement because he considered some of them to be "quibbles".

"With his professional background, one would have expected the applicant - perhaps more than most - to understand the serious nature of contracts, whether they take the form of loan agreements or franchise agreements," she said.

"Bearing that in mind, one would not, I think, have expected someone in the applicant's position to agree to repay a debt he disputed. Nor would one expect him to agree to a loan facility to repay a debt he disputed."

Dismissing Mr McIlveen's challenge, the judge said there was "no evidence of a triable issue or viable defence to the debt".

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