THE HIGH COURT  
COMMERCIAL  
[2021] IEHC 685  
2020 No. 131 S  
BETWEEN  
JAMES D. VANDEVER, CHRISTOPHER SAMUEL FORMAN AND SUZANNE ELISE FORMAN  
PLAINTIFFS  
AND 
PATRICK RAINSFORD AND ANGELA RAINSFORD  
DEFENDANTS  
JUDGMENT of Mr. Justice Quinn delivered on the 29th day of October 2021.  
1. The plaintiffs seek summary judgment in the sum of US$4,708,739 against the first 
named defendant and in the sum of US$2,327,709 against the second named defendant, 
together with continuing interest.  
2. The claim arises pursuant to 16 promissory notes executed by the defendants in favour of 
Michael R. Forman (“the Deceased”) between 22 August 2008 and 20 December 2018. 
Mr. Forman died on 29 January 2019.  
3. The plaintiffs are the  trustees of the Michael Forman Living Trust (“the Trust) and the 
claim is being pursued by them on behalf of that Trust.  
4. The defendants seek leave to defend the proceedings. The ground of their intended 
defence is that the loans the subject of the pro missory notes were advanced in the 
context of a “loan for equity deal”. The defendants assert that before any of the monies 
were advanced and the first promissory note was signed, the deceased agreed that he 
would seek repayment of the loans not on their s tated maturity dates, or extended dates, 
but only after the business of the companies into which the defendants invested the 
monies lent was in a position to fund repayment, or “on an exit on sale or flotation” of the 
relevant companies.  
5. The threshold for granting leave to defend such a claim is low and it is only necessary 
that the defendants demonstrate an arguable case. I have considered the affidavit 
evidence and submissions made on behalf of the defendants and have concluded that the 
claims made by  the defendants are no more than a bald assertion of the “loan for equity 
deal” and contradict the documentary evidence exhibited. Accordingly, the plaintiffs are 
entitled to judgment in the amount claimed.  
First Promissory Note for US$1.5 million, execut ed 22 August 2008  
6. The first named defendant is the sole Obligor on this note.  
7. The core obligation stated in this note is in the following terms: -  
 “For value received, the undersigned, Patrick Rainsford, an individual (“Obligor”) 
hereby promises to pay to Michael R. Forman, an individual (“Holder”) at 120 North 
Robertson Boulevard, Los Angeles, California 90048, or at such other place or to 
such othe r party or parties as the holder of this Note may from time to time 
designate, the principal sum of One Million, Five Hundred Thousand and 00/100 US 
Dollars (US$1,500,000) with interest thereon at the rate of six and one quarter 
percent (6.25%) per annum ( the “Interest Rate”)”.  
8. The note provides for the payment of interest monthly in arrears commencing on 1 
November 2008 up to and including the stated Maturity Date of 1 February 2009, “at 
which time any and all unpaid principal together with accrued but  unpaid interest shall be 
due and payable”.  
9. The note provides for an increase in the rate of interest to 10% on the occurrence of any 
default, and the provision for the payment by the Obligor of all costs and expenses 
including legal costs incurred by the holder related to the collection of any amounts due 
under the note. Para. 5 provides: -  
 “Obligor, for itself and all endorsers, guarantors and sureties of this note, and each 
of them and their heirs, legal representatives, successors and assigns, hereby 
waives presentation for payment, demand, notice of non – payment, notice of 
dishonour, pro test of any dishonour, notice of protest, and protest of this Note and 
all other notices in connection with the delivery, acceptance, performance, default 
or enforcement of the payment of this Note and agrees that its liability shall be 
unconditional and w ithout regard to the liability of any other party and shall not be 
in any manner affected by any indulgence, extension of time, renewal, waiver or 
modification granted or consented to by the holder”.  
10. Para. 7 provides: - 
 “Nothing contained herein shal l prevent holder from waiving in any certain instance 
or in any particular occasion, any right or remedy hereunder (including, but not 
limited to, the operation of the acceleration clause above) Consent to one such 
transaction shall not be deemed to be a c onsent or waiver of any future 
transactions. No such waiver shall constitute a further or continuing waiver of such 
right or remedy as to any preceding or succeeding breach hereunder. No single or 
partial release of any right hereunder or under any instrum ent securing or 
guaranteeing this note shall preclude any other or further exercise thereof or the 
exercise of any other right. Holder shall at all times have the right to proceed 
against any security for this Note in such order and in such manner as holde r may 
deem fit, without waiving any rights with respect to any other security. No delay or 
omission on the part of the holder in exercising any right hereunder or under any 
other instrument shall operate as a waiver of such right or of any other right unde r 
this Note”.  
11. Jurisdiction and choice of law are contentious issues raised by the defendants. Paragraph 
10 of the Note provides as follows: -  
 “This Note shall be governed by and construed in accordance with the laws of the 
State of California. Any a ction on this Note must be brought in a US Federal Court 
or California State Court having jurisdiction, located in Los Angeles County; Obligor 
hereby agrees and submits to personal jurisdiction of such courts”.  
12.  The terms of this note were altered in three important respects by later documents 
comprising what were referred to as an Omnibus Reaffirmation Agreement made on 31 
January 2013 and amendments thereto, referred to in more detail below. The three 
important amendments were as follows: -  
i. The m aturity date was amended from time to time. Ultimately by the Seventh 
Amendment to Omnibus Reaffirmation Agreement made on 31 August 2018 “the 
Seventh Amendment”, it was extended to 28 February 2019.  
ii. The interest accruing on the Note was capitalised f rom time to time, and by the 
Seventh Amendment the principal balance was restated at US$1,805,625.48.  
iii. The governing law and jurisdiction was altered by the Seventh Amendment of 31 
August 2018 to confer on the parties’ options of both law and jurisdic tion in either 
California or Ireland.  
Second Promissory Note for US$480,075, executed 20 May 2010  
13. On this and all subsequent notes, the first and second defendants are joint and several 
obligors.  
14. The stated maturity date is 31 December 2011.  
15. This note was in substantially the same form as the first promissory note, with the 
following differences.  
16. The note contained a number of provisions relevant to an option being conferred on the 
deceased relating to shareholding in eMuse Corporation Li mited (“eMuse”) and its 
subsidiaries. The relevant paragraphs are as follows: - 
“9. The proceeds hereof shall be used wholly and exclusively for the general corporate 
purposes of eMuse Corporation Limited (a company registered in Dublin, Ireland, 
no. 2970 26) and its subsidiaries.  
10. At the option of Holder all or any part (corresponding to the conversion of any 
possible number of shares) of the unpaid principal then outstanding may be 
converted into shares of common stock of eMuse currently owned by the  Obligor, at 
any time starting from the day hereof until the later of (1) the Maturity Date (as 
such date may be extended by the Holder) or (2) the date that Obligor pays off this 
Note in full including any outstanding principal, accrued interest and other  charges 
due hereunder, and further provided that Holder gives Obligor not less than five 
days prior written notice”.  
17.  Para. 10 contained further provisions identifying the price per share to be applied upon 
any conversion.  
18.  The terms of the seco nd note were later amended in the following important respects - 
(i) The maturity date was extended initially to 31 December 2012 and following a 
series of further amendments to 28 February 2019. The final such extension was 
granted by the Seventh Amendmen t made on 31 August 2018.  
(ii) The right of the Obligors to prepay the note before a Maturity Date of 30 November 
2013 was excluded, “in order to protect the deceased’s ability to exercise the 
conversion right” (Omnibus Reaffirmation Agreement 31 January 2 013).  
(iii) The choice of law and jurisdiction clause was amended to confer an option on the 
parties to elect for California or Irish law and jurisdiction (Seventh Amendment).  
Omnibus Reaffirmation Agreement 31 January 2013  
19. The first and second prom issory notes were modified by this agreement.  
20. The parties to this agreement were the defendants (the first and second named defendant 
each having signed the agreement), the deceased and a Californian limited company 
controlled by the deceased called R obertson Cantara LLC (“RC”).  
21. This agreement recited the first and second promissory note and certain amendments 
which had previously been made to them.  
22. A number of the recitals are relevant: - 
(i) “Recital C – Forman holds a membership interest in RC. On or about January 12, 
2009 in consideration for Forman’s agreement to extend the maturity date of the 
US$1.5 million Note, Obligor granted RC the option to purchase five hundred 
thousand (500,000) shares (the RC shares) of Obligor’s personal share  holdings of 
Class A ordinary shares in eMuse Corporation Limited. (“eMuse”). The purchase 
price for exercising such option was 0.00125 Euros per share. On or about February 
3, 2009, RC exercised the foregoing option and paid Obligor the sum of €625. As of  
the date hereof Obligor has not delivered the stock certificates evidencing the 
transfer of ownership interest in the RC shares from Obligor to RC”. (emphasis 
added).  
(ii) “Recital D – On or about May 6 2010, in consideration for Forman’s agreement to 
advance the loan evidenced by the US$480,075 Note, Obligor agreed to transfer to 
Forman RC six hundred and twenty -five thousand (625,000) shares (“the Forman 
Shares”) of Obligo r’s personal shareholdings of Class A ordinary shares in eMuse. 
As of the date hereof, Obligor has not delivered the stock certificates evidencing the 
transfer of ownership interest and the Forman shares from Obligor to Forman”.  
(iii) Recitals E and F rec ited that the Obligor had requested, and the deceased had 
agreed to extend the terms of the first and second note for an additional period of 
time.  
23.  The agreement extended the maturity dates of the first and second note to 30 November 
2013.  
24. The a greement contained acknowledgements by the defendants that they had failed to 
pay any interest or principal due under the notes.  
25. The agreement provided at para. 2 (c) a confirmation that the right of the deceased to 
convert any principal amounts then outstanding into shares of common stock of eMuse 
Class A ordinary shares remained valid, binding and irrevocable and in full force and 
effect. The right was extended to the revised maturity date and the clause continued “in 
order to facilitate Forman’s abi lity to exercise the foregoing conversion right, the Obligor 
acknowledges and agrees that commencing on the date hereof, the US$480,075 note 
shall not be prepayable in whole or in part prior to the maturity date without the prior 
written consent of Forman,  which may be granted or withheld at Forman’s sole and 
absolute discretion”.  
26. The agreement provided that save for these modifications, the notes and all of their terms 
remained in full force and effect.  
27. In Clause 4 “Miscellaneous”, the parties restated the choice of law and governing law to 
be “the laws of the State of California”. Clause 4 (c) then contained an “entire agreement 
clause” in the following terms: -  
 “This agreement constitutes the entire agreement between the parties and 
supersed es all prior oral or written negotiations and agreements between the 
parties with respect to the subject matter hereof. No modification, variation or 
amendment of this agreement (including any exhibit hereto) shall be effective 
unless made in writing and s igned by both parties”.  
28. Clause 4 (d) contained a confirmation by each of the parties to the other: -  
 “That it has had the opportunity to seek the advice of its own independent legal 
counsel with respect to the provisions of this agreement and that its decision to 
execute this agreement is not based on any reliance upon the advice of any other 
party or its legal counsel. Each party represents and warrants to the other party 
that in executing this agreement such party has completely read this agreemen t 
and that such party understands the terms of this agreement and its significance. 
This agreement shall be construed neutrally, without regard to the party 
responsible for its preparation”.  
Seventh amendment to Omnibus Reaffirmation Agreement, dated 31 A ugust 2018  
29.  The Omnibus Reaffirmation Agreement was amended on seven occasions, by agreements 
dated 30 November 2013, 30 June 2014, 30 December 2014, 1 December 2016, 31 
December 2016, 15 February 2018 and finally on 31 August 2018, being the Seventh 
Amendment.  
30. The Seventh Amendment recited the prior amendments and extensions of the maturity 
dates of the first two notes.  
31. Recital C provided as follows: - 
 “On or about January 12, 2009, in consideration for Forman’s agreement to extend 
the matur ity date of the US$1.5 million note Obligor granted RC the option to 
purchase five hundred thousand (500,000) shares (“the RC shares”) of Obligor’s 
personal shareholdings of Class A ordinary shares in eMuse Corporation Limited 
(“eMuse”). The purchase price  for exercising such option was 0.00125 Euros per 
share. On or about February 3rd, 2009 RC exercised the foregoing option and paid 
Obligor the sum of €625. As of August, 31 2018 Obligor has not delivered the stock 
certificates evidencing the transfer of ow nership interest in the Forman shares from 
Obligor to RC.  
 Recital D – On or about May 6, 2010, in consideration for Forman’s agreement to 
advance the load evidence (sic) by the US$480,075 Note, Obligor agreed to 
transfer to Forman six hundred and twenty -five thousand (625,000) shares (the 
“Forman shares”) of Obligor’s personal shareholdings of Class A ordinary shares in 
eMuse. As August 31 2018, Obligor has not delivered the stock certificates 
evidencing the transfer of ownership interest in the Forman sh ares from Obligor to 
Forman”.   
32.  The agreement recited each of the previous amendments to the Omnibus Reaffirmation 
Agreement and that the Obligor had failed to pay any of the accrued interest or principal 
amounts due pursuant to those amendments and r ecited at J: - 
 “As of 31 August 2018, Obligor is in default of this agreement”.  
33.  By Clause 1 the maturity dates of the first and second notes, which as at that date had 
been due for repayment on 31 August 2018, were extended to 28 February 2019.  
34.  The parties acknowledged that, save as expressly amended by this agreement:  
  “all of the terms, covenants and conditions of the [first and second notes] shall 
remain in full force and effect and, as hereby modified, Obligor covenants and 
agrees to perfo rm and preserve each and every term and covenant of the [first and 
second notes]”.  
35.  Clause 7 provided for Obligor to deliver the outstanding shares on the earlier of any of 
the following events: -  
a) Written demand by either Forman or RC;  
b) The eli mination of any existing legal or contractual restrictions on the transfer of 
the Forman shares or the RC shares, or;  
c) The sale or transfer of any eMuse shares owned by Obligor for any reason.  
36. The agreement contained a restatement of the confirmati on that the parties had each had 
the opportunity to obtain their own legal advice and that decisions to execute the 
agreement were not based on any reliance on the advice of any other party or its legal 
counsel.  
37. The agreement contained an important p rovision amending the governing law and 
jurisdiction, which has become controversial in the context of this application. Clause 4 
provided: -  
 “Governing law. Notwithstanding anything contained in the Agreement to the 
contrary, the parties acknowledge and agree that either party shall have the option 
of subjecting the Agreement, the US$1.5 million Note or the US$480,075 Note, and 
all other docume nts or agreements entered into or referenced in the Agreement to 
United States law in the jurisdiction of Los Angeles, California or under Irish law in 
the jurisdiction of Dublin, Ireland”.  
Third Promissory Note for $90,000 executed 1 September 2017  
38. On 1 September 2017, the defendants issued a promissory note in favour of the deceased 
for a sum of US$90,000. The interest rate payable was 10% and the maturity date was 1 
September 2018.  
39.  The third paragraph of the note provided as follows: - 
 “Payor  expressly waives presentment, protest and demand, notice of protest, 
demand and dishonor and non – payment of this Note and all other notices of any 
kind, and agrees to pay all costs of collection when incurred, including reasonable 
attorneys’ fees, and e xpressly agrees that this Note, or any payment hereunder, 
may be extended from time to time without in any way affecting the liability of the 
maker and endorser hereof”.  
40.  As to governing law and jurisdiction, the note provided: -  
 “This note shall be  governed by the laws of the state of California. Payor and Payee 
agree that all actions or proceedings arising in connection with this note shall be 
tried and litigated only in the state and federal courts located in the City and 
County of Los Angeles, St ate of California”.  
41.  On 1 September 2018, the parties executed a Modification of the third Promissory Note. 
By this modification the parties agreed to restate the maturity date to 28 February 2019.  
42.  The modification contained a provision in the f ollowing terms: -  
 “Except as herein specifically modified, no additional modification or amendment to 
this note is intended, and, except as herein specifically set forth, all of the terms, 
covenants and conditions of the Note shall remain in full force a nd effect and, as 
hereby modified, Payor covenants and agrees to perform and observe each and 
every term and covenant of the Note”.  
Further Notes  
43. Between 20 September 2017 and 31 July 2018, eleven further notes were issued. Seven 
were for $90,000 each , and one each for $80,000, $100,000, $120,000 and $180,000. 
They contained a series of maturity dates ranging from 1 September 2018 through to 31 
December 2018. With the exception of one, modifications were executed on a variety of 
dates between 1 Septemb er 2018 and 31 December 2018, extending the maturity dates 
of all the notes to 28 February 2019.  
44.  A note issued on 20 October 2017 and payable on 1 October 2017 was never extended.  
45. On 18 October 2019, a note for the sum of US$210,000 was executed  having a maturity 
date of 28 February 2019.  
46. On 20 December 2018 a note was executed for the sum of US$65,000 having a maturity 
date of 28 February 2019.  
47.  The total amounts advanced pursuant to these 2017 and 2018 notes was a principal sum 
of US$ 1,475,000. It is not in dispute that the amounts referred to in each of these notes 
were advanced. Nor is it disputed that the defendants duly signed the notes.  
48. The first and second promissory notes were amended by the First Omnibus Reaffirmation 
Agreement and seven amendments thereto. This brings to ten the total number of 
documents executed in respect of the first and second loans. Fourteen further loans were 
granted, and fourteen promissory notes executed. Eleven amendments were executed 
modifying t heir repayment dates, bringing the total of the amending documents in respect 
of those notes to twenty five. This brings the total number of documents in evidence 
before this Court to 35, in which the maturity dates were restated, culminating ultimately 
in all loans being repayable on 28 February 2019 unconditionally.  
49. Apart from the general repeated averments as to a “loan for equity deal”, which I 
consider later, nowhere in the affidavits is any narrative provided by either party as to the 
events spec ifically surrounding the execution of the notes during 2017 and 2018 or, more 
pertinently, the modifications which all culminated in the same final maturity date of 
28/2/2019. Between 1 September 2018 and 31 December 2018 any notes which were 
then maturing , with one exception, were on various dates in that period extended to 28 
February 2019. The final two notes, signed on 18 October 2018, for an amount of 
US$210,000 and on 20 December 2018, for an advance of US$65,000 each stated the 
maturity date of 28 Fe bruary 2019.  
50. Neither party offers any description of what transpired between the parties to bring 
together all of the maturity dates to the single date of 28 February 2019.  
Plaintiffs’ Grounding Affidavit  
51. The application for summary judgment is g rounded on an affidavit sworn by Mr. James D. 
Vandever. Mr. Vandever says that he is one of the trustees of the Trust.  
52.  Mr. Vandever exhibits the promissory notes, an original Declaration of Trust establishing 
the Trust and the last amendment thereto,  correspondence comprising initial letters of 
demand issued to the defendants and letters exchanged between the plaintiffs’ solicitors 
McCann Fitzgerald and the defendants’ solicitors Eversheds.  
53. Mr. Vandever refers to the position adopted by the defend ants in the correspondence 
from Messers Eversheds, where they stated:  
 “Put simply, it was agreed that there would be forbearance and a continual rollover 
of the Promissory Notes.”  
 The plaintiff states that the trustees do not accept the explanation, whic h they say are 
contrary to “the clear and unambiguous terms of the Promissory Notes”  which he says are 
“legally binding and the defendant have not identified any valid basis for disputing their 
enforceability”.  He avers that the debt as demanded, and inter est remains due and that 
the defendants have no bona fide defence to the claim for summary judgment.  
The Trust  
54.  Mr. Vandever explains that the Trust is a mechanism commonly used in the United States 
of America to administer an individual’s personal we alth. He says that this was originally 
created by a Declaration of Trust on 25 August 1989, which was amended from time to 
time, culminating in an amendment and restatement of the Declaration of Trust dated 14 
September 2018.  
55.  Mr. Vandever says that t he deceased was the sole trustee of the Trust during his lifetime. 
In accordance with California law, the deceased’s interest in the notes was transferred to 
the Trust. On the death of Mr. Forman the trustees were appointed as co – trustees of the 
Trust an d they have since their appointment been taking steps to administer the Trust in 
accordance with its terms.  
56.  The plaintiffs also delivered an affidavit by Elizabeth Bawden. Ms. Bawden  is an attorney 
qualified and practicing in California. She says that she was instructed by the deceased to 
advise in relation to his estate planning. She explains the nature of the Trust. It is a 
common estate planning choice whereby the grantor transfers  assets to the living trust 
while alive and at death the trustee is able to marshal and distribute the assets without 
resort to probate or court action. She refers to a Twenty Ninth Amendment to the Trust 
pursuant to which, on the death of the trustor, Mr.  Forman, the plaintiffs stand appointed 
to serve as trustees.  
57. The defendants have delivered a replying affidavit of a Mr. Jose L. Patino, of San Diego. 
Mr. Patino takes issue with a number of points concerning California law, but does not 
take any issu e with the description by the plaintiffs of their status as trustees to pursue 
the interests of the Trust. Mr. Patino says that California law provides no protection for a 
suitably established trust against “ the array of California law and proscriptions pr otecting 
contracting parties from contractually deficient demands for payment, whether from a 
trustee or a grantor”.  
58.  Mr Patino continues:  
 “Attorney Bawden’s affidavit does not address those impediments which I now offer to the 
court for its conside ration of these proceedings.”   
59.  I shall return to other aspects of California law which are addressed later by Mr. Patino. 
However, the validity of the Trust, the appointment of the plaintiffs as trustees, the 
assignment of the notes to the Trust, and the status of the trustees to pursue claims for 
the benefit of the Trust are not disputed.  
Evidence of the first defendant  
60.  The first named defendant swore two affidavits in response to this application, on 4 
November 2020 and 23 November 2020.  
61.  In his first affidavit the first defendant describes his background, stating that he is an 
electronics engineer who has established and sold a number of software development 
companies. In or about 2000, he and a business partner, Mr. Conlon, established th e 
eMuse group of companies, which evolved over a 20 – year period and whose primary 
focus is now on digital advertising services, mainly in the US market.  
62.  In 2010, arising from certain differences between Mr. Rainsford and Mr. Conlon, Mr. 
Rainsford f ounded what is referred to as the Noster Group of companies, focused on 
research and developing “data harvesting software”, and which enabled some of the 
underlying eMuse technology to be developed for a different market.  
63.  Mr. Rainsford says that his remaining shareholding in the eMuse group is now held 
through a company in the Noster Group.  
64.  Mr. Rainsford met Mr. Forman at a venture capital presentation in 2000 when he was 
looking for further investment in eMuse. He formed a friendship with Mr. F orman who had 
expressed an interest in investing in eMuse. Mr. Rainsford says that the friendship 
continued from that time up to the death of Mr. Forman. In the days before Mr. Forman’s 
death in February 2019 he stayed at his apartment in New York preparin g for a 
presentation to investors.  
65.  Mr. Rainsford says that he was the founder and operator of the eMuse group and he and 
his wife Angela the second defendant had invested significant sums in the group prior to 
meeting Mr. Forman. Mr. Forman “was a ke y angel investor”. He says that at all times Mr. 
Forman made it absolutely clear to him that he was: - 
  “investing in me and my software and development team and, therefore, whatever 
percentage of the collective Noster and eMuse businesses Angela and I he ld, 
whether directly or indirectly, Mike as a silent business partner also had a stake. 
This was the basis on which we conducted business and which was established over 
many years”  
66.  Mr. Rainsford states that there were three phases when Mr. Forman inve sted in eMuse 
and Noster. Before detailing these, he said that “ Mike’s shareholding interests evolved 
over the years in eMuse and Noster from 2000 to the time of his death in January 2019 
and was inextricably linked to the loan advances” .  He continued: - 
 “Each time Mike advanced monies, he made it clear to me that he was investing in 
eMuse and/or Noster as a group. Mr. Forman never characterised these advances 
as simply loans. In his (sic) mind, they were all equity plays. He always made it 
clear that the se advances were investments in my business ventures”.  
67.  Mr. Rainsford then refers to the three phases, which he describes as a venture capital 
round in 2000, “stability and growth, 2008 – 2011”, and “post – SICAV 2017 – 2018.”  
68.  Mr. Rainsford says  that Mr. Forman’s first equity investment was in 2000 when he 
subscribed for approximately 1,548,750 Class B shares, being 2.28% of ECL for €1 million 
based on a valuation of US$40 million.  
69.  No loan to the defendants or corresponding promissory note is referred to in this round.  
“Stability and growth”  
70.  Mr. Rainsford says that in or about 2008, when he was in dispute with his then business 
partner Mr. Conlon, that deadlock rendered it impossible for him to raise further funding. 
This meant the eM use group was technically insolvent in the absence of fresh investment 
or new contracts. He was very pessimistic of his chances of securing further investment. 
He then refers to a meeting on 23 July 2008 held at the Locanda Locatelli, a restaurant in 
Londo n. The evidence of the conversation at this meeting is central to the defendants’ 
position.  
23 July 2008 Meeting at Loconda Locatelli  
71.  The lunch meeting was attended by the defendant and, his colleague, Ms. Kara Hanahoe 
together with Mr. Forman and hi s wife, Maria Doyle, who is later referred to as “Malsi”.  
72.  Mr. Rainsford states that at this meeting he explained to Mr. Forman the financial 
difficulties which eMuse was experiencing at that time. Mr. Forman said that he would like 
to invest further in the company. Mr. Rainsford continued as follows: -  
 “I asked him what he wanted and he said ‘shares’. He offered to advance a sum of 
€1million immediately (equivalent to US$1.5million at the time) to take the 
company through the next year or so. At thi s point Mike (through RPDC) was 
already a shareholder in ECL and, because of time constraints, the difficulties with 
Mr. Conlon and in order to avoid going through complicated pre -emption 
procedures, it was agreed that the investment would be by way of loa n to me 
rather than direct to eMuse and I would provide equity to Mike by giving him an 
option to acquire at nominal value some of my Class A shares and which were only 
held by Mr. Conlon or myself (or our trusts) as founding shareholders. The existing 
shareholder arrangements also made it difficult to provide security for the loan or 
give equity without shareholder consents. Mike suggested that he did not need 
security as this was really an equity play but the loan could carry a good 
commercial interest ra te and then be repaid when eMuse was in a position to do so, 
for example, on an exit on sale or flotation.  
 I was very happy with this proposal and agreed to it. I trusted Mike implicitly and he 
trusted me. Therefore, the agreed basis upon which sums were to be advanced (in July 
2008) was by way of a loan which was to be repaid when eMuse was in a position to do 
so. This reflected the fact that Mike was investing in the eMuse business in effect for an 
equity return. It was a loan for equity deal”.  
73.  On 28 July 2008, Mr. Forman transferred the sum of €1milion to Mr. Rainsford. The 
defendant says that this amount then equated to about US$1.5 million. On 22 August 
2008 the first promissory note for US$1.5 million was executed. Mr. Rainsford said that 
these monies were used for the sole purpose of running costs/working capital in eMuse.  
74.  Mr. Rainsford continues by saying that on the 12 January 2009 “ In completing the equity 
side of the deal reached at the Locanda meeting” he agreed to grant Mr. Forman or  his 
nominated entity an option to acquire shares in ECL (a subsidiary of the Noster Group) 
which he then held. Mr. Rainsford says that the 2009 equity is that referred to in Recital C 
of the Omnibus Reaffirmation Agreement dated 31 January 2013.  
75.  Mr. Rainsford refers to an additional amount of €750,000 which Mr. Forman subscribed 
pursuant to a rights issue, thereby increasing his shareholding. This advance was not the 
subject of any promissory note.  
76. Mr. Rainsford refers to the further sum of U S$480,075 advanced in May 2010 “on our 
agreed Locanda loan for equity deal and to cover immediate operating costs ”. He refers to 
the fact that he agreed to procure the transfer to Mr. Forman of additional shares. That 
loan was evidenced by the Second Promi ssory Note. Mr Rainsford refers to the conversion 
rights which are recited in that note.  
77.  Mr. Rainsford refers to further acquisitions of shares by Mr. Forman in 2011. He says that 
the effect of these various measures was to confer on Mr. Forman a com bined 
shareholding interest amounting directly and indirectly to a total of 6.38%.  
78.  Mr. Rainsford refers then to certain restructuring discussions he held with an external 
investor, referred to as the SICAV, and describes a novation of certain shareho lder loans 
and further investments made by himself.  
79. Mr. Rainsford refers to further advances made by Mr. Forman to him in 2017 and 2018 
“on the same loan for equity basis as the sums he advanced in 2008 and 2010”.   
80.  Mr. Rainsford says that he agre ed to transfer shares in the Noster Group at a suitable 
later stage, which would bring Mr. Forman’s shareholding to a minimum of 10% in the 
eMuse group and 10% of the defendant’s holding in the Noster group.  
81. The share transfers were never implemented.  Mr. Rainsford avers that at the time of Mr. 
Forman’s death he was waiting to hear from Mr. Forman as to whom the shares should be 
transferred, and he says that Mr. Forman was very ill in the period immediately preceding 
his death.  
82.  In summary, Mr. Ra insford said that the effect of the transactions described above would 
be that Mr. Forman’s investment in eMuse and Noster  
 “will be realised on an exit event (namely, on a sale or floatation of the business) 
on a pari passu basis with Angela and myself a nd without priority as follows: -  
(a) By a repayment of the loan notes, totalling $4,708,739 (together with 
accrued interest as per Mr. Vandever’s affidavit, although I have not seen his 
interest workings for the precise numbers) from [he then refers to d ebt owed 
by the companies to himself and the second defendant] and,  
(b) By a disposal of equity interest of not less than 10% in eMuse group and 
Noster group”.  
 Mr. Rainsford said that the principal amount of the loans from Mr. Forman were 
“effectively spl it” as between the different companies, although the loans were advanced 
to the defendants and not the companies. He says that “ of the total eMuse and Noster 
debt of around €12 million owed to Angela and myself, Mike’s loan notes represent 
approximately 25 % and therefore the debt would be repaid in the proportions 1 : 3 with 
the debt owed to Angela and myself”.  
The Promissory Notes  
83. The defendant then addresses the promissory notes themselves when he says the 
following: - 
“39.  I cannot recall who sent  me the promissory notes for the 2008 and 2010 advances 
for the eMuse group. I believe it was Mr. Vandever, who was Mike’s long standing 
lawyer.  
40.  Following each transfer of money for the 2017 to 2018 advances to the Noster and 
eMuse groups, Mike and o r his assistant, Joe Robinson would send me a promissory 
note to sign. No explanation was given for why Angela and myself needed to sign 
the loan notes and we had no part in preparing them. The agreement was always 
that the loans were repayable on exit as per the loan for equity deal. I assumed 
that Mike needed the loan notes for his internal paper trail on funds movements 
and these would sit alongside the equity deal.  
41.  I trusted Mike when he assured me that the loans did not have to be repaid until 
the business (i.e. eMuse and Noster) was in a position to do so – or upon a sale or 
floatation of the business. I have no knowledge of the laws of California and the 
impact of these on any of the arrangements we had put in place.  
42.  The only time the prom issory notes were mentioned in my many discussions with 
Mike was at the end of a year when Mike would say that he would ‘roll over’ the 
promissory notes. Even though the promissory notes were structured as one year 
notes, at no time did Mike ever indicate on an anniversary date that the promissory 
notes would be called in. Nor did I ever make any repayments against the 
promissory notes as this would have been entirely inconsistent with the basis upon 
which these monies were advanced.  
43.  At the end of eac h year, Mike would call me and say words to that effect: ‘It’s that 
time of the year again, how long do you need and Joe Robinson (his assistant) will 
send over the papers’. By asking ‘How long do you need?’ I always understood Mike 
to mean that – consiste nt with our agreement – he would roll over the loans until 
the business was in a position to repay the loans or in expectation of an exit event. 
Indeed, while the first tranche of monies was advanced in 2008, at no stage did 
Mike ever assert that I was und er an obligation to immediately repay these monies. 
Had he made such an assertion, I would have said that such a demand goes 
against what we had agreed at Locanda Locatelli on 23 July 2008.  
44.  As I mentioned above, I stayed at Mike’s apartment in New Yo rk in the week 
before he died. There was no question of loans being called in, Mike having 
advanced additional sums only a month before then. Had he done so, not only 
would it have breached the agreement we reached in 2008, but it would also have 
imperille d the investment he had made in eMuse and Noster over a period of nearly 
20 years.  
45.  I do not recall how the first Omnibus Reaffirmation Agreement came into place. I 
believe Mr. Vandever sent it to me to update the paperwork for loans advanced in 
2008 and 2010 and the 2009 equity and 2010 equity. This was then renewed every 
year, with the latest document (the Seventh Omnibus Reaffirmation Agreement) 
being signed 31 August 2018. Each agreement was more or less in the same form, 
acknowledging the new inde btedness under the loans at the date of the agreement 
and with some modifications to paragraph 3 to take into account the restrictions on 
delivery of the 2009 equity and 2010 equity in consequence of my ECL Class A 
shares being transferred to NVL and subse quently as part of the transaction with 
the SICAV investor and of which Mike was aware. Neither Angela nor I were 
advised to take, nor did we take, legal advice when signing the agreements or 
promissory notes as we both trusted Mike that the agreement was always the loan 
for equity deal we had agreed back in 2008 at the Locanda meeting”.  
84.   By this description of the Omnibus Agreements and amendments, the defendant refers 
to the agreements being in “broadly the same form” with modifications in relation to the 
equity element which he recalls, but makes no reference to the fact that each such 
agreement stipulated a new maturity date.  
85.  In his second affidavit Mr. Rainsford repeats a number of the assertions as to the content 
of the “Locanda” meeting. H e says that during his lifetime the deceased “ never called on 
me to repay the sums due on foot of the promissory notes ”. He refers to the fact that the 
deceased continued to advance sums right up until a month prior to his death.  
86.  In relation to the O mnibus Reaffirmation Agreement, Mr. Rainsford says the following: -  
 “I did not take legal advice before signing it in January 2013 – some four and a half 
years after the 2008 promissory note, and two and a half years after the 2010 
promissory note. Rather, they simply rolled over on an annual basis in accordance 
with my ag reement with Mike. Indeed, recital C of the omnibus agreement records 
that on 12 January 2009 I granted Mike through RC the option to purchase 500,000 
shares in eMuse and further that this option was exercised on or about 3 February 
2009”.  
87. Mr. Rainsfo rd does not to refer to the fact that the option was expressly recited in the 
Omnibus Reaffirmation Agreement as having been granted in consideration for Forman’s 
agreement “to extend the maturity date of the US$1.5 million note” (see para. C of the 
recita ls to the Seventh Amendment). The repayment obligation was not stated to be 
conditional. The recitals in the Seventh Amendment evidence that extensions of new 
maturity dates were the result of negotiations on each occasion and not pursuant to a 
broad or ge neral obligation on the part of the deceased to continue granting extensions 
annually or indefinitely.  
88. The defendant states that most of his communications with the deceased were oral and 
by telephone. He says that whenever they exchanged correspondenc e by email it was 
normally focused “on the business”. He has reviewed his emails “as they related to the 
matters referred to in his affidavit” and draws the court’s attention to a number of emails 
which he considers to be significant. Having regard to the 19 year relationship it is 
noteworthy that so few emails are exhibited. I have considered those exhibits to examine 
whether they evidence the assertion made by reference to the Locanda meeting.  
12 March 2013  
89.  This is an email from Mr. Forman to Mr. Rainsford written some weeks after the signing 
of the Omnibus Reaffirmation Agreement. The deceased states: - 
 “Enclosed are the agreements with regard to our most recent understandings for 
my loans to you and stock  purchased by Robertson Cantara and promised to me. 
Also this includes the option loan”.  
 The defendant says that he is not sure what the reference is to the “option loan” but he 
thinks it is the US$480,075 loan “with the conversion rights”. This is a ref erence to the 
second promissory note which contains a provision for certain conversion rights. The 
paragraph in this exchange of emails to which importance is attached by the defendant is 
an email from the deceased as follows: -  
 “Over the weekend I did s peak with Jim Vandever, who did mention to me that he 
has not heard from Steven with regard to the paperwork for Noster and eMuse. As I 
had mentioned before, I really do not know why this is being done. Notwithstanding 
the above, it should be an easy trans ition through a couple of memorandums or 
letters. Pat, my funding to you is getting quite large and I would like the comfort to 
know that I am not going to have a problem when you do make your exit. I also do 
not want an argument with the banks I use for f unding as this is what I do. It is a 
pass through from the banks to my accounts to loan to you. Once again, as 
mentioned before, I don’t see a real problem or hold up as there are only four 
shareholders for eMuse with you owning 80% or more of the company” .  
90. The defendant relies on this email to support his suggestion “ that at no time in this email 
is Mike talking about promissory notes being repaid other than on exit”.   
6 September 2017  
91.  On 6 September 2017, Mr. Vandever issued an email to a Mr. J ones, an advisor to the 
defendant, copied to Mr. Forman and Mr. Rainsford and others. He refers to an 
understanding that the “Noster shares are to be issued in a manner that will effectively 
duplicate the ownership interest that Michael (and his entities) maintained in eMuse 
Corporation” . He continues “I believe we will be able to argue that the Noster shares were 
received as a successor to eMuse or that Michael will be able to effectively offset the gain 
in some other manner”.  
92.  The defendant refers to  this email as evidence of his agreement with the deceased as to 
the issue of further shares in “NPL”, as part of new loans to the Noster and eMuse groups. 
No reference is made to the promissory notes or any modifications thereof.  
21 May 2018 emails  
93.  On this date there was an exchange of emails between Mr. Joe Robinson, another advisor 
to the deceased, and Mr. Rainsford. The defendant refers to this in the context of 
confirmations that he was giving to the deceased regarding his shareholding. These 
emails contain no discussion regarding repayment or maturity dates for outstanding 
loans. Mr. Robinson states the following: - 
 “Can you also let us know when we can expect the loan documents and when can 
the Noster stock shares be issued? Also, if you have any questions on the loan, 
please include them”.  
94.  In his reply, Mr. Rainsford states as follows: -  
 “So, Mike owns 10% of Noster mobile stock, and my understanding is he wishes 
70% to be in his own name and 3% to go to Robertson. Is that correct?  
 The amount of the loan is about $130,000 the actual figure is €110,000, so when I 
spoke to Mike I was doing the conversion in my head – hence the confusion.  
 I have sent all the original loan docs to Mike and Malsi’s home address. I have 
attached the tracki ng number in case you need it  . . . .  
  . . .  I have no questions at all, as I think I am fully clear on Mike’s intentions”.  
95.  These exchanges occurred on 21 May 2018. One of the promissory notes issued was on 
20 June 2018 for a sum of $120,000, agai n with a maturity date of 1 September 2018.  
96.  The exhibited versions of these emails are extracted from a sequence which is not before 
the court. In so far as they are extracts on which the defendants rely, if anything they 
illustrate that when notes w ere being signed and returned this was done in the context of 
active discussions and exchanges between the parties and not simply placed before the 
defendants for execution without dialogue. Nor do they advance the case that maturity 
dates would not be rel ied on.  
Email 29 June 2018  
97.  On this date Mr. Forman emailed Mr. Rainsford and stated as follows: -  
 “Pat, I moved a little too fast with regard to the issuance of the Noster stock. The 
stock should be in the name of Malsi and myself. I don’t think yo u are going to 
issue the stock in the next day or two, give me a couple of days, I want to see 
under American tax laws the best way to see how it can be delineated. I should 
know in a day or two if not yet today”.  
98.  Nowhere in these emails is there any  evidence of discussion as to extension of 
repayment dates. At their height, these evidence ongoing discussions between the parties 
regarding the structure by which shares would be held by the deceased. Although there is 
a connection between the loan to th e defendants evidenced by the promissory notes and 
the acquisition of the deceased’s interest in the shares in the relevant companies, no 
evidence is proffered of an agreement to waive reliance on stated maturity dates, or other 
conditionality in the payme nt obligation.  
Emails with Malsi  
99.  The defendant states that he remained good friends with the deceased’s widow Malsi. He 
says that he tried to contact her after he received the letters of demand from the 
plaintiffs calling in the promissory notes wit h a view to establishing what her 
understanding was. On 23 August 2019, Malsi replied as follows: -  
 “Hi Pat,  
 Sorry you couldn’t reach me by fone (sic), but I had some early emergency 
appointments with several dentists and had to coordinate a oral surge ry before the 
holiday weekend. Jim had called once and said that the estate tax on your notes 
are over $2 million and that Chris, the son, will not want to pay that. I told Jim that 
Michael always rolled the loan over till you sell, but I really don’t know  how that all 
works now as Michael left no instructions or memos just the oral conversations with 
you and me. I believe the estate taxes are humongous and need to be paid latest 
by end October. Michael put that burden on his son. Maybe some divine inspirat ion 
will come through? I am not busy over weekend and we could connect. Good 
thoughts. Malsi”.  
100.  The defendant places emphasis on the words used in this email where Malsi states “I told 
Jim that Michael always rolled the loan over till you sell”.  
101. This is no more than a statement on the part of Malsi that as a matter of fact and record 
the deceased “always” rolled over loan notes prior to his death. She confirms that she 
herself does not know “how that all works now”.  
102. No evidence is proffered of any follow up conversations, although in the absence of an 
affidavit by Malsi, such evidence would be susceptible to objections under the rule against 
hearsay.  
103. The defendant exhibits an email which he received from Malsi on  26 April 2020, some 
weeks before the commencement of these proceedings. In this she states the following: - 
 “Hope your lawyers are good to help you, and I will continue to reiterate Michael’s 
wishes in your behalf. Take care”.  
104.  The defendant relies  on this email again in support of the assertion that the deceased’s 
wishes were that the promissory notes would only be repaid on exit. A plain reading of 
the words and language used in this email does not support this proposition and it is clear 
that Mal si is simply confirming that she would “continue to re -iterate the deceased’s 
wishes”. She does not state what those wishes were.  
105. These are the only emails or input from the deceased’s widow and no affidavit is sworn by 
her.  
Affidavit of Angela Rain sford sworn 4 November 2020  
106. The second defendant swore a short affidavit. She states that she has read the contents 
of the first defendant’s affidavit and she confirms that what he says is true based on her 
own knowledge of events. She continues: -  
“7. Pat’s relationship with Mr. Forman grew over many years. Pat trusted Mr. Forman 
implicitly as a friend and business partner and I too had complete faith in Mr. 
Forman’s integrity.  
8. The basis on which I signed the promissory notes was because of the  agreement 
Pat had reached with Mike as set out in Pat’s affidavit.  
9. It was in reliance of this agreement that Pat and Mike had (that the promissory 
notes would only be repaid on the sale or exit of the business (originally eMuse and 
then the new co. n ow envisaged). I would never have risked personal bankruptcy 
and putting myself and my children in financial jeopardy – and potentially homeless 
– if anything had gone wrong and the loan notes called on at any time.  
10. I did not take independent legal a dvice on the loan notes and was never asked to 
do so by Mr. Forman or his advisors, before signing them”.  
107. The second defendant did not attend the Locanda meeting and does not assert that she 
was a party to any of the discussions between the deceased and the first defendant in 
connection with the execution of the promissory notes. At its most, her affidavit is 
evidence only of her understanding of the first defendant’s understanding.  
Affidavit of Kara Hanahoe sworn 4 November 2020  
108. Ms. Hanahoe is the chief marketing officer of the eMuse and Noster group of companies 
and has worked with the first defendant for over 20 years.  
109. Ms. Hanahoe refers to the affidavits of the first and second defendants. She states that  
her understanding of the agree ment between Mr. Forman and the first defendant as to 
how Mr. Forman advanced monies is as set out in the first defendant’s affidavit.  
110. Ms. Hanahoe says that she has checked her diaries for the dates of meetings which she 
and the first defendant atten ded with the deceased and his wife Malsi, starting with the 
Locanda meeting on 23 July 2008. She then refers to eleven further meetings, all of 
which took place at different locations in London commencing on 19 October 2008, and 
the last, importantly, of s uch meetings having taken place on 20 May 2014.  
111. Ms. Hanahoe states that at the Locanda meeting the offer of investment came from the 
deceased and his wife. She continues: -  
 “At no time at that meeting or any other meeting or occasion at which I was  
present was it ever suggested or inferred that the funds advanced to Pat by Mike 
were to be repaid at any time other than on a sale or a floatation”.  
112. Ms. Hanahoe continues by stating that every meeting was cordial and friendly and usually 
held over lunch or dinner at a restaurant. She states that at no time did the deceased 
ever ask when his money would be repaid or ever mention repayment. She says that the 
discussions always concerned how to build the business to get an exit.  
113. Ms. Hanahoe concl udes: - 
 “Pat trusted Mr. Forman implicitly as a friend and business partner and I too had 
complete faith in Mr. Forman’s integrity. The idea that repayment of the monies 
advanced was to occur in any way other than in accordance with the agreement 
that it be done on the sale or exit of Pat’s business was never discussed at any of 
the meetings I was present”.  
114. At first read this affidavit has the appearance of corroborating the defendant’s assertion 
concerning the nature of the loans. She makes the gene ral statement that she agrees 
with the defendant’s account of the Locanda meeting. But the affidavit is carefully 
phrased in the negative, when she says that it was not suggested that the notes be repaid 
“other than on a sale or flotation”. No evidence is given by Ms. Hanahoe as to the 
specifics of any discussions during which it was said that the promissory notes or related 
agreements were to be subject to an overriding understanding that the maturity dates 
stated therein would be continuously extended in the manner contended for by the 
defendants.  
115. Between 22 August 2008 and 31 December 2018 thirty five documents were signed by 
the parties. Apart from Ms. Hanahoe’s broad statements of her belief as to the basis of 
the loans, she does not address or ev idence any discussion which would have the effect of 
varying the maturity dates referred to in those documents.  
Further evidence  
116. Supplemental affidavits were exchanged sworn by Mr. Vandever and Mr. Rainsford. The 
plaintiff rebuts the assertions of th e defendants and says that they are conflating two 
separate and distinct obligations, namely the obligation to pay pursuant to the notes and 
the obligations to issue shares.  
117. Whilst the first plaintiff says he was an advisor to the deceased, none of t he plaintiffs 
were a party directly to the conversations on which the defendants rely. The plaintiff 
exhibits emails which were exchanged between him and the deceased’s executive 
assistant, Mr. Joe Robinson, which includes such matters as instructions from  Mr. 
Robinson relating to the preparation of the amendments to the Omnibus Reaffirmation 
Agreement in November 2013. These emails are relied on in support of the plaintiff’s 
averment that his understanding of the instructions were that promissory notes wer e to 
be repaid on their maturity dates. The defendant, in contrast, relies on certain extracts 
from these emails, in particular, a statement in an email from Mr Robinson on 1 
November 2013 in the following terms: -  
 “On the $480,075 note, since this is a convertible note, he [the deceased] does not 
want that paid as he wants the interest to accrue so he can get more shares”.  
118. The plaintiff on the other hand relies on this same quote as evidence of a specific 
instruction concerning a particular maturity date extension.  
119. A full reading of the text of that email illustrates that it is part of a chain of instructions to 
Mr Vandever about ongoing revisions of terms. Critically, the defendant himself states 
that th e loan referred to in the quote “was never converted”.  
Legal Advice  
120. The plaintiff exhibits an email of 3 December 2013 in which the defendant stated to the 
deceased’s advisor Mr. Kaminsky: - 
 “I will get back to you on this tomorrow. I have no questi ons at all, and it seems 
fine to me. Just waiting for my lawyer to get back to me and if all good will send 
over signed scanned copies ASAP”.  
121. This email was sent in response to emails from Mr. Kaminsky on 25 November 2013 and 
a follow up on 2 Decembe r 2013 with which Mr. Kaminsky submitted a draft of the 
Omnibus Reaffirmation Agreement for the defendant’s review.  
122. Although the defendant stated in his email of 3 December 2013 that he was “waiting for 
my lawyer to get back to me”, he swears in his second affidavit as follows: - 
 “I may have sought out legal advice, as referred to in the email exhibited by Mr. 
Vandever, but my recollection is that I did not ultimately obtain legal advice. 
Indeed, this much is evident from the fact that no comments we re ever given by 
me nor did I propose amendments to any of the documents Mike ever sent me”.  
123. The plaintiff places reliance on a reference by the defendant to communications between 
the plaintiff and Mr. Stephen Jones, referred to by the defendant in h is first affidavit as 
“our legal advisor at the time” in the context of communications exchanged in November 
and December 2017. The defendant states that Mr. Jones was his legal advisor on 
matters relating to the restructuring of the companies in late 2017  and that he did not 
know Mr. Jones prior to 2017.  
124. The disputed question of whether the defendant took legal advice at any time in relation 
to the Notes is a question of fact not capable of being determined on this application. But 
I do not need to d etermine that question in considering whether the evidence proffered 
supports or is consistent with the central proposition of the defendant as to the “loan for 
equity deal” and conditionality of the repayment obligations. The relevance of the 
references t o legal advice is limited. It is clear however from the defendant’s own account 
that he is an experienced businessman, and that he had access to legal advice when he 
chose to avail of it.  
Governing law and jurisdiction – the first two notes  
125. The first two notes were expressed to be governed by the laws of the State of California 
and to the jurisdiction of the US Federal Court or California State Court having 
jurisdiction.  
126. The Seventh Amendment to the Omnibus Reaffirmation Agreement made on 31 Augu st 
2018 changed this as follows:  
 “Notwithstanding anything contained in the Agreement to the contrary, the parties 
acknowledge and agree that either party shall have the option of subjecting the 
agreement, the US$1.5 million Note or the US$480,075 Note, and all other 
documents or agreements entered into or referenced in the Agreement to United 
States law in the jurisdiction of Los Angeles, California, or under Irish law in the 
jurisdiction of Dublin, Ireland”.  
127. The term “Agreement” is defined to refer  to the Omnibus Reaffirmation Agreement, and 
the intervening amendment agreements. Therefore, this provision applies to proceedings 
concerning the first two loan notes and the Omnibus Reaffirmation Agreement as 
amended from time to time.  
128. The plaintif fs say that this is a valid choice of law in accordance with Article 3.2 of 
Regulation No. EC 593/2008 (the Rome Regulation). They also cite Dicey, Morris and 
Collins on the Conflict of Laws (15th Ed. Sweet & Maxwell) as authority for the proposition 
that the Rome Regulation does not prohibit such matters as alternative choices of law or 
provisions which change the governing law. They quote in particular the statement in that 
text to the effect that: - “Once exercised, such an option should be an effective choice of 
law”. 
129. The defendants do not contest the right of the plaintiffs to pursue the first and second 
notes in this Court.  
130. The defendants contend however that Clause 4 purports to confer an unfettered right of 
election on each of the parties regarding the governing law. They submit that in as much 
as the plaintiff has invoked the jurisdiction of this court, the defendants retain the right to 
invoke the laws of California as the governing law for the resolution of the dispute.  
131. The plaintif fs say that this reading is untenable and that once the proceedings are 
commenced in Ireland, they have invoked the right to have the dispute governed by Irish 
law.  
132. The clause states that the agreement shall be subjected to “United States law in the 
jurisdiction of Los Angeles, California, or Irish law in the jurisdiction of Dublin”. The plain 
reading of these words is that the law governing any such dispute will be the law of the 
jurisdiction in which the party seeking enforcement has commenced the p roceedings, now 
being Irish law.   
Governing law and jurisdiction – the later notes (2017 and 2018)  
133. Each of these notes provides that the note should be “governed by the laws of the State 
of California and the parties agree that all actions or proceed ings shall be tried and 
litigated only in the state and federal courts located in the City and County of Los 
Angeles, State of California.”  
134. This provision was never amended. In the initial correspondence following the 
commencement of these proceedings  Messrs. Eversheds on behalf of the defendants 
stated their intention to enter a conditional appearance with a view to making an 
application to contest the jurisdiction of this Court.  
135. Correspondence was exchanged on this subject and ultimately the de fendants did not 
challenge the jurisdiction of this court to hear and determine the claim. In particular, they 
acknowledged in submissions that the effect of Article 4 of Regulation EU No. 1215/2012 
(the Recast Brussels Regulation) as interpreted in the ca se law of the EU and of this Court 
(see Owusu v. Jackson Case No. C 281/02 2005 ECR 1 383, and by Dunne J. in Abama v. 
Gama Construction Ireland Limited [2011] IEHC 308) is to override an exclusive 
jurisdiction clause in favour of a non – EU country, such that the defendants, being 
domiciled in the State, may be sued in this court.  
136. As regards governing law, the defendants invoke Article 3 of the Rome Regulation and 
rely on the provisions of the notes expressing them to be governed by the laws of 
Califo rnia.   
137. The plaintiffs agree that the later notes are governed by Californian law which therefore is 
clearly relevant.  
138. The plaintiffs submit that whilst the laws of California govern a substantive dispute 
concerning the loans, on a question of th e admissibility of evidence, the lex fori  applies. 
They cite the judgment of Denning LJ in Karner v. Witkowitzer  [1950] 2KB 128:  
 “… The rule of our law which says that documents are exclusive evidence of the 
transaction which they embody is a rule of evidence and, as such, is to be applied 
by our courts even when they deal with foreign contracts; because by private 
international law, the court of trial applies its own rules of evidence just as it 
applies its own mode of trial.”  
 I shall return later to  this subject when considering the submissions regarding the parol 
evidence rule.  
139. Affidavits have been exchanged as to relevant California law, to which I shall return later. 
Whilst I have considered the evidence as to the law of California, the parti es also accept 
that the question of whether this court should grant summary judgment on this 
application is a procedural question governed by the lex fori . Therefore, I must be 
informed by the Irish law principles applicable to that question, which are wel l settled. 
(See for examples Aer Rianta Cpt v. Ryanair Limited  [2001] 4 IR 607, IBRC v. McCaughey  
[2014] 1 IR 749,  Danske Bank AS v. Gillick [2015] IEHC 375, Ulster Bank v. Dean  [2012] 
IEHC 248, and Harrisrange v. Duncan  [2003] 4 IR 1)  
140. The parties hav e referred me also to a number of judgments concerning the application of 
the parol evidence rule under Irish law including Ulster Bank v. Dean  [2012] IEHC 248, 
Tennants Building Products v. O’Connell  2013 IEHC 197, AIB v. Galvin Developments  
(Killarney)  [2011] IEHC 314, Connell v. Danske Bank  [2017] IEHC 765, and Danske Bank 
v. Shortt  [2020] IECA 137.  
141. In summary :  
(a) the substantive governing law of the later notes is California law  
(b) Irish law governs the test for granting summary judgment or leave to defend  
(c) the parol evidence rule of Irish law applies  
Summary judgment application – leave to defend  
142. In Aer Rianta v. Ryanair , McGuiness J. said:  
 “Is it for the court to decide whether in the instant case the defence set out i n the 
affidavits of [the defendant] together with the documents exhibited therewith, is 
credible, or in other words, whether there is a fair and reasonable probability of the 
defendant having a real or bona fide defence. Since there has been no oral hearin g 
and neither deponent has been cross – examined on his affidavit, and it was not for 
the learned High Court judge to weigh the affidavit evidence of [the parties] or to 
attempt to resolve the factual contradictions contained in it. Still less is it for th is 
Court to attempt any such task. In deciding whether the defendant may have a 
“credible” defence, the court must concentrate its attention on the matters put 
forward in the defence itself. The court does not ask whether the defendant’s 
account of events is probable, or likely to be true; nor does it ask whether the 
plaintiff’s account of events is more likely. The question is whether the proposed 
defence is so far -fetched or so self – contradictory as not to be credible”.  
143. In the same case Hardiman J . put the test as follows:  
 “The fundamental questions to be posed on an application such as this remain:  
 -    Is it “very clear” that the defendant has no case? Is there either no issue to be 
tried or only issues which are simple and easily determined?  Do the defendant’s 
affidavits fail to disclose even an arguable defence?”  
144. In IBRC v. McCaughey , Clarke J. said: “It is important, therefore, to reemphasise what is 
meant by the credibility of a defence. A defence is not incredible simply because the  
judge is not inclined to believe the defendant. It must, as Hardiman J. pointed out in Aer 
Rianta Cpt v. Ryanair Limited [2001] 4 IR 607, be clear that the defendant has no 
defence. If issues of law or construction are put forward as providing an arguable  
defence, then the court can assess those issues to determine whether the propositions 
advanced are stateable as a matter of law and that it is arguable if determined in favour 
of the defendant they will provide for a defence”.  
145. He continued:   
 “Inso far as facts are put forward then subject to a very narrow limitation, the court 
will be required, for the purpose of the summary judgment application to accept 
that facts of which the defendant gives evidence, are facts in respect of which the 
defendant p uts forward a credible basis for believing that evidence may be 
forthcoming, or as the defendant asserts them to be. The sort of factual assertions, 
which may not provide an arguable defence, are facts which amount to a mere 
assertion unsupported either by  evidence or by any realistic suggestion that 
evidence might be available, or, facts which are in themselves contradictory and 
inconsistent with uncontested documentation or other similar circumstances such 
as those analysed by Hardiman J. in Aer Rianta Cp t v. Ryanair Limited [2001] 4 IR 
607. It needs to be emphasised again that it is no function of the court on a 
summary judgment motion to form any general view as to the credibility of the 
evidence put forward by the defendant”.  
146. In Danske Bank v. Gill ic [2015] IEHC 375, McDermott J. granted summary judgment in a 
case where he noted the requirement to exercise caution in the exercise of the jurisdiction 
to grant summary judgment. Having considered the evidence set out in the affidavits 
submitted he conc luded that what was advanced as a defence by the defendant was not 
credible in the sense in which that term is used by McKechnie J. in Harrisrange v. Duncan  
and by Hardiman J. in Aer Rianta v. Ryanair.  In a passage particularly apposite to the 
facts of thi s case, he concluded: - 
 “I am not satisfied that the second defendant has adduced any cogent evidence of 
the type one might expect to exist if the agreement claimed was reached. There is 
no precise date given as to when it was agreed interest would not ac crue or that 
interest did not accrue in or about January 2009 because of the agreement 
reached. There is no correspondence or memorandum of agreement relating to the 
terms upon which the bank would forebear to sue for the monies owed and for what 
precise c onsideration. The suggested duration of the alleged forbearance is said to 
be between 5 -7 years. It is not tenable that the terms of such an agreement would 
not be committed to writing and precisely defined so that the obligations of the 
parties would be c learly set out. It appears to me to be unthinkable that the bank 
would agree to an open -ended unstructured, undocumented, forbearance to sue or 
to take any steps to secure its interests over a period of 5 -7 years. It is not clear 
what, if any, obligations the second defendant had under any such agreement apart 
from the suggestion that he would cooperate with Browne Asset Management 
Solutions”.  
The parol evidence rule  
147. The parties referred also to the application of conflicting laws under private intern ational 
law as to the introduction of extrinsic evidence. In Dicey Morris and Collin’s on The 
Conflict of Laws (15th Ed) at para. 725 this question is discussed: -  
 “A distinction has been drawn between extrinsic evidence adduced to interpret a 
written do cument e.g. a contract and extrinsic evidence adduced to add to, vary or 
contradict its terms. The admissibility of the former is a question of interpretation, 
governed in the case of a contract by its applicable law. The admissibility of the 
latter is a q uestion of evidence, governed, subject to the possible effect of Rome 1 
and 2 Regulations, by the lex fori”.  
148. In this case the evidence, such as it is, which the defendants seek to adduce relating to 
the repayment obligations pursuant to the promissor y notes goes not to interpret any 
ambiguity in the promissory notes, which are clear in every case as to maturity date, but 
to vary or contradict the terms of the notes. This being the case the lex fori  applies and 
this Court should be cautious about the a ttempt to establish a collateral contract or to 
vary the terms of the promissory notes by reference to oral evidence.  
149. The parties made extensive submissions regarding the application of the parol evidence 
rule in Irish law.  
150. The application of t hat rule and of certain exceptions was described by Hogan J. in 
Tennants Building Products Limited v. O’Connell [2013] IEHC 197: -  
 “By virtue of this rule, the parties to a written contract are presumed to have 
reduced the entirety of their agreement to writing and that to permit one party to 
introduce new oral evidence which in effect contradicts the terms of the written 
agreement would be destructive of legal certainty.  
 It is certainly true that a party cannot be allowed to lead evidence as to what he  or 
she subjectively believed the contract to mean: see, e.g., the Supreme Court's 
decision in Macklin v. Graecen & Co. [1983] I.R. 61. Yet the full rigour of the parol 
evidence rule has been consistently diluted by doctrines such as non -est factum, 
misrep resentation and the collateral contract rule. If the parol evidence rule were to 
be applied with remorseless and unbending logic, it might create a form of 
immunity for those who would carelessly, recklessly and perhaps even falsely 
misrepresent the terms of the written agreement, often to the disadvantage of the 
weaker party, thus undermining the very public policy on which the very existence 
of the parol evidence rule rests.  
 This very principle is reinforced by the Supreme Court's decision in ICDL GCC 
Foundation FZ -LLC v. European Computer Driving Licence Foundation Ltd. [2012] 
IESC 55 where Fennelly J. observed:  
 "A court will always commence with an examination of the words used in the 
contract. Moreover, words will, as Lord Hoffman emphasises, normal ly be 
interpreted in accordance with their 'natural and ordinary meaning....' Business 
people will be assumed to know what they are doing and will normally be bound by 
what they have signed. The exercise is to be conducted objectively. The parties are 
not permitted to give evidence of their subjective intentions or of the negotiations 
leading to the conclusion of the contract. Keane J, as he then was, summarised the 
law briefly but comprehensively in his still unreported judgment in the High Court in 
Lac Mi nerals Ltd. v Chevron Mineral Corporation (High Court, unreported 6th 
August 1993).  
 Evidence of the surrounding circumstances, but not of subjective intentions, may be 
admitted to explain the subject -matter and even what particular words used should 
be un derstood as referring to. Such evidence will not normally be allowed to alter 
the plain meaning of words. In truth, there is no real issue in the present case 
concerning background or surrounding circumstances."”.  
151. Having reviewed further case law, Ho gan J. concluded as follows: - 
 “The effect of this case -law may be said to be that while the courts will permit a 
party to set up a collateral contract to vary the terms of a written contract, this can 
only be done by means of cogent evidence, often itsel f involving (as in Mudd and in 
Galvin) written pre -contractual documents which, it can be shown, were intended to 
induce the other party into entering the contract. By contrast, generalised 
assertions regarding verbal assurances given in the course of the contractual 
negotiations will often fall foul of the parol evidence rule for all the reasons offered 
by McGovern J. in Deane”.  
152. In Danske Bank v. Shortt  [2020] IECA 137, Ni Raifeartaigh J. considered the relevance of 
the parol evidence rule in the cont ext of what she referred to as the “banking” cases.  
153. Ni Raifeartaigh J. examined the case law extensively. She observed that in many of the 
cases, the result turned not so much on a rigid application of the parol evidence rule but a 
finding by the cou rt that there was such a paucity of evidence ( Ulster Bank v. Dean  2012] 
IEHC248 and Promontoria (Arrow) Limited v. Mallon  [2018] IEHC 145) that leave to 
defend should be refused.  
154. On this subject, Ni Raifeartaigh J. concluded as follows: -  
 “I would a lso suggest that the policy reasons referred to directly or indirectly in these 
judgments are indeed important; but their relevance in the present context is not by 
rendering the evidence inadmissible, but rather by the courts insisting on appropriate 
standards for testing such evidence (‘cogent’ evidence in the case of a full hearing; and 
the usual threshold test for remittal to a plenary hearing in an application for summary 
judgment). In other words, there are good reasons to be cautious about such evide nce 
(once admitted); but these reasons do not justify the evidence being excluded from the 
outset”.  
155. Ni Raifeartaigh J. continued: - 
 “ . . . . for present purposes, the Court thinks it is sufficient to say the following:  
a) The usual evidential thresh old applies in summary judgment cases in respect of a 
defendant who seeks to have an issue in, and/or the entire case, remitted for 
plenary hearing. Accordingly, the evidence does not have to reach the threshold 
that would be required at a trial. This is a s true in respect of the issue of a collateral 
contract as it is for any other issue. (IBRC v. McCaughey is an example of the 
evidence concerning an alleged collateral contract being measured against the 
evidential standard in a summary judgment case).  
b) Nonetheless, and although the evidential foundation for establishing an arguable 
case is lower than the evidence required to establish a collateral contract at trial, a 
court may legitimately reach the conclusion, even on an application for summary 
judgme nt, that the evidence put forward by a defendant seeking plenary trial is so 
implausible, lacking credibility or otherwise thin that even that lesser standard has 
not been met in a particular case (examples of this are Deane, Mallon and 
Kennedy)”.  
156. Ni Raifeartaigh J. found that the facts in Shortt fell into Category (b) above and that the 
evidence put forward by the defendant, even assuming it to be admissible, “did not reach 
even the low evidential threshold required for the remittal of an application for summary 
judgment to plenary hearing”.  
157. Although those questions are governed by tests established in Irish law, it seems to me to 
be appropriate, in examining whether an arguable case has been made out by the 
defendants, to consider the affidavits , as  to the laws of California in so far as they are 
relevant to the application of that test in this case.  
Laws of California  
158. The defendants have produced affidavits sworn on 4 and 24 November 2020 by Mr. Jose 
L. Patino, a partner at Eversheds Suth erland’s law firm in San Diego, California. On behalf 
of the plaintiff an affidavit has been sworn on 16 November 2020 by Mr. Michael S. 
Brophy an attorney practicing in Los Angelos, California.  
159. Mr. Patino describes the parol evidence rule under Cali fornia law as a “ liberal parol 
evidence rule under which such evidence is admissible to clarify the parties’ interest 
insofar as it is consistent with interpreting the contract”.  He cites what is referred to as 
the Pacific Gas Exception (Pacific Gas and El ectric Company v. G.W. Thomas Drayage etc. 
[1968] 69 CAL 2D 33) as follows: - 
 “Parol evidence is admissible to show all circumstances surrounding a transaction in 
order to determine the meaning intended and understood by the parties”.  
160.  Mr. Patino co ntinues: -  
 “Consistent with the liberal application of the parol evidence rule in California, even 
if the promissory notes in suit contain integration clauses indicating they contain 
the ‘entire’ agreement between the parties, the parol evidence rule ‘do es not, 
however, prohibit the introduction of extrinsic evidence’ to explain the meaning of a 
written contract . . . if the meaning urged is one to which the written contract terms 
are reasonably susceptible”.  
161. In the affidavits and in submissions of the parties there was much discussion concerning 
the application of “entire agreement” clauses such as that contained in para. 4 (c) of the 
Omnibus Reaffirmation Agreement. In circumstances where that clause applies only to the 
first two notes, and no equi valent appears in any instrument relating to the following 14 
notes, I do not propose to expand on the analysis which the parties made regarding the 
application of such a clause.  
162. Having noted that the Pacific Gas exception limits the facility for int roducing parol 
evidence to cases where such evidence is necessary to determine the meaning intended 
and understood by the parties, or where it is necessary to resolve any ambiguity on the 
face of the documents, which does not arise here, Mr. Patino, in som ething of a 
contradiction, expands on the rule to say that in the absence of an “integration” clause 
“evidence regarding any oral agreements between the parties regarding the timing or 
form of enforcement of the contractual terms must be factually resolved  via trial rather 
than summary disposition . ..  the manner in which the court determines the intent of the 
parties is to hear evidence regarding the oral agreement between the parties as to the 
enforcement of unintegrated terms of a contractual agreement” .  
163. As to the test for summary judgment under the laws of California, Mr. Patino continues: - 
 “The affidavits of the moving party are strictly construed and those of his opponent 
liberally construed, and doubts as to the proprietary of summary judgmen t should 
be resolved against granting the motion (Crocker Nat. Bank v. Emerald [1990] 221 
Cal. App. 3 D 852 (reversing summary judgment decision and judgment thereon 
and noting that when “conflicts appear on the papers submitted in support of and in 
opposi tion to the motion, we resolve those conflicts in favour of the non – moving 
party)”, quoting Mann v. Cracchiolo [1985] 38 Cal. 3D 18. In the presence of such 
disputed facts, the non – moving party has a right to a trial or evidentiary hearing 
where the tr ier of fact will resolve those disputes based on the presentation of 
evidence, including the cross – examination of witnesses and documents. California 
law could not be more clear, as noted by the California Supreme Court almost fifty 
years ago: “ Having fi led an answer , defendants are entitled to have disputed issues 
of fact determined by a trial” because “summary judgment proceedings are 
available for determining whether triable factual issues exist, but not for resolving 
such issues”. (emphasis added)  
164. Mr. Brophy disagrees with the analysis of Mr. Patino. He quotes from the California Code 
of Civil Procedure, which he says codifies California’s parol evidence rule, and certain 
modifications, and exceptions. He also cites case law and identifies two exc eptions to the 
rule. He refers firstly to the “Materson Exception”. It applies where “a written agreement 
is not the complete and exclusive statement of agreement between the parties, the 
evidence of a separate or collateral oral agreement may be introduce d to supply 
additional terms on any matter in which the written agreement is silent, provided such 
separate oral agreement is not inconsistent with the written terms.  
165. Mr. Brophy continues stating that the second exception is the Pacific Gas exception, under 
which extrinsic evidence may be introduced to explain the meaning of words used in a 
contract if the evidence supports a meaning to which the written contract terms are 
“reasonably susceptible”.  
166. Mr Brophy states that the “alleged side  agreement” is extrinsic evidence directly contrary 
to the payment terms set forth in both the Notes and the Reaffirmation Agreement and is 
substantially irrelevant evidence under California law. He concludes by citing a California 
Supreme Court judgment t hat “… an opposing party may not create an issue of fact to 
defeat summary judgment by offering inadmissible evidence (Perry v. Blackwell 
Hawthorne”.  
167. The high point of Mr. Patino’s evidence as to the parol evidence rule is that a court should 
“hear ev idence regarding the oral agreement between the parties as to the enforcement 
of unintegrated terms of a contracted agreement.” This proposition is contradicted by his 
own reliance to the ‘Pacific Gas’ exception, which relies on the existence of an ambigui ty 
in the words used in the written agreement.  
168. The apparent conflict between Mr. Patino and Mr. Brophy is one which the court should 
not determine without hearing the witnesses as to California law. However, the parties 
acknowledge that the test for s ummary judgment is governed by Irish law (see paragraph 
17 of the defendants’ outline written submissions). On that subject, Mr. Patino’s evidence 
is that California law provides that “having filed an answer, defendants were entitled to 
have disputed issue s of fact determined by a trial because summary judgment 
proceedings are available for determining whether triable factual issues exist, but not for 
resolving such issues” .  He cites Rooney v. Vermont Investment Corp  (1973) 10 Cal 38 
351 and Currency Corp v. Wertheim 2011  B222851, 2011 Cap. App. Unpub. Lexis 3771.  
169. This amounts to a submission that it is only necessary for a defendant to state the basis 
upon which he seeks to defend the proceedings by “filing an answer”. Even applying the 
low bar for es tablishing an arguable defence this proposition is untenable.  
170. In reliance on this general proposition, the defendants presented an elaborate narrative 
based on the “loan for equity” agreement of the Locanda meeting. The appropriate course 
on this app lication is to examine, as I have done, the affidavits to determine whether the 
claims made by the defendants go beyond mere assertions.   
Estoppel  
171. The defendants rely on the judgment of Charleton J. in Ulster Investment Bank Limited v. 
Rockrohan Esta te Limited  [2015] IESC 17, and the judgment of the Court of Appeal in 
Allied Irish Bank plc. v Griffin  [2020] IECA 221.  
172. In each of these cases extensive evidence was adduced as to the respective conduct of 
the parties and in particular of reliance on  representations made.  
173. In the case of Ulster Bank v. Rockrohan , the evidence was that the plaintiff bank had 
“held its hand” before moving for an order for possession and sale of the defendant’s 
lands, in reliance on representations by the defendant that the underlying debt would be 
repaid from the proceeds of litigation against different parties.  
174. In AIB plc v. Griffin, the court approached the matter from the perspective that: -  
 “The defendant had established an arguable factual basis for his  account that on 21 
April 2008 he paid one third of the first facility on foot of an assurance from the 
plaintiff  that if he did this, he would have no further liability in respect of it”. 
(Emphasis added)  
175. Central to these and other estoppel cases is evidence that the party raising the estoppel 
relied and acted to its detriment either on representations made or on the “convention” 
established by the conduct of the parties.  
176. The defendants say that they signed the notes and agreements under an understanding 
that they would not be called on to repay otherwise than in accordance with the ‘Locanda’ 
agreement. No evidence is proffered that in signing such documents they acted to their 
detriment in reliance on  representations or ‘convention’. Whilst the act of signing the 
notes attracted the liability to repay, it was essentially an act to their benefit, by drawing 
down the loans. The Omnibus Reaffirmation Agreement and Amendments thereto and the 
Modifications of the notes were all signed to effect and record extensions to the maturity 
dates, again to the benefit, not detriment, of the defendants. The ingredient of estoppel 
which is reliance to the defendants’ detriment is therefore wholly absent from the case.  
Interest calculations  
177. In his supplemental affidavit of 16 November 2020, the plaintiff exhibits an email dated 
30 January 2014 from Mr. Robinson (assistant to the deceased) to Mr. Kominsky and the 
first plaintiff. It states “Good news. Pat has sent t he accrued interest per the Omnibus 
Agreement as amended”. He relies on the fact of this payment to submit that it is 
untenable for the defendants to argue that they never believed that they were obliged to 
make repayments under the notes. The defendant in  his supplementary affidavit disputes 
this assertion. He says that no such payment was made, and that this averment is 
contradicted by the interest workings exhibited by the plaintiff.  
178. At the time of the Omnibus Reaffirmation Agreement on 31 January 2013, the parties by 
their signature recited interest accrued on the first note of US$416,609.59. The Seventh 
Amendment dated 31 August 2018 recites interest due on the first note as of that date of 
US$537,684.64.  The plaintiffs have exhibited a schedule of interest calculations which 
show that in respect of the first note, as at 30 December 2018 a principal sum was due of 
US$1,805,625 (this being the revised principal pursuant to the Seventh Amendment to 
the Omnibus Reaffirmation Agreement) and interest a t a sum of US$575,505. Although 
interest calculations year on year have not been exhibited, it is clear from the figures 
mentioned above that the interest amounts varied from date to date, as would be 
expected. I cannot regard the email referred to above a s undermining the plaintiffs’ 
calculations, and nothing has been exhibited to undermine the final schedule showing 
interest on the first note as of 30 December 2018 at US$575,405, or the sworn evidence 
of the plaintiff that this was the true balance owing.  
Ex gratia payment to Trust  
179. The first defendant refers to payment of an ex gratia amount to the Trust in a different 
context made by eMuse, and not by any of the defendants. He asserts that he agreed that 
eMuse would make an ex gratia payment to the T rust “which could be netted off the 
amount due and owing by the defendants on an exit event.”  
180. It is difficult to understand how an advance made ex gratia by eMuse to the Trust could 
be set off against a debt owed by the defendants to the Trust.  
181. Nonetheless, the description of the circumstances in which this payment was made is, by 
contrast with the defendant’s assertions regarding the ‘loan for equity deal’, very specific 
and detailed and, importantly, has not been controverted by the plaintiffs . That being the 
case, I shall deduct this amount of US$109,000 against the total amount claimed before 
entering judgement.  
Conclusions  
182. In respect of the first two notes the plaintiffs are clearly entitled to invoke the jurisdiction 
of this Court pu rsuant to Clause 4 of the Seventh Amendment to the Omnibus 
Reaffirmation Agreement. Having done so, the law applicable is Irish law, as provided for 
in that clause.  
183. In respect of the 2017 and 2018 notes, the agreements and notes provide that the note s 
shall be “tried and litigated only in the State and Federal Courts of California”. Having 
initially raised an issue as to jurisdiction, the defendants waived this objection and have 
not contested the jurisdiction of this Court to determine these proceedi ngs.  
184. On an application for summary judgment, the test is governed by Irish law, and is that 
set out in Aer Rianta v. Ryanair  and the cases considered earlier.  
185. Since the substantive law governing the 2017 and 2018 notes is the law of California, I 
have considered also the sworn evidence as to California law. Even Mr. Patino, who swore 
on affidavit on behalf of the defendants, refers to the ‘Pacific Gas’ exception to the parol 
evidence rule, which means that extrinsic evidence may be adduced to exp lain the 
meaning of a written contract. In this case there is no ambiguity to the words used in the 
promissory notes and other agreements.  
186. Mr. Patino accepts that it it is open to the court on an application for summary judgment 
to decide whether a “ triable issue remains to be determined”. This must engage an 
examination of the defendants’ affidavits to establish whether they contain more than 
mere assertions of the basis of a defence.  
187. The defendants do not dispute the following: - 
(a)  the monies claimed were advanced and not repaid;  
(b)  the notes and Modifications thereof and the Omnibus Reaffirmation Agreement and 
Amendments thereto were duly executed by the defendants;  
(c)  the plaintiffs as trustees of the Trust are the parties w ith standing to pursue the 
claim on behalf of the Trust, recognising that such claim can be no stronger than 
any claim the Trust would have pursued prior to the death of Mr. Forman.  
188. It is not alleged that any of the notes were signed under any form o f duress, but instead 
under a certain understanding held by the defendants.  
189. The defendants seek leave to defend on the ground that at the Locanda meeting of 23 
July 2008 it was agreed by the deceased that he would advance loans to the defendants 
and that he would seek repayment only when eMuse / Noster or the underlying 
businesses of those companies was in a position to fund such repayment or on an exit on 
sale or floatation. This is referred to as the “loan for equity deal” or the ‘Laconda deal’.  
190. The defendant says: -  
(a)  That this loan for equity deal applied to the loan made in August 2008, May 2010 
and to the 14 further loans advanced between 1 September 2017 and 20 December 
2018, notwithstanding the specific maturity dates stated on each o f the promissory 
notes evidencing those loans;  
(b) That the deceased repeated his assurance of the loan for equity deal every time 
new loans, evidenced by the promissory notes, or extensions of the maturity dates 
were granted;  
(c) That the deceased nev er called for repayment of the monies. That instead each 
year he asked the defendant “How long do you need?” and following such 
discussion executed modifications extending the maturity dates;  
(d)  That every time the defendants signed the notes or modific ations thereof, or 
amendments to the Omnibus Reaffirmation Agreement, they did so on the 
understanding that the Locanda deal was still in place.  
191. There is no document evidencing the Locanda agreement. Instead, the defendants 
description of that agreem ent is repeated throughout their affidavits, but without any 
reference to evidence which would explain the contradiction between the defendants’ 
account and the documented agreements or would otherwise corroborate their assertions.  
192. Between the promis sory notes themselves, the modifications thereto, the Omnibus 
Reaffirmation Agreement and Amendments thereto, 35 documents were signed by the 
first defendant and 34 by the second defendant in each one of which the obligation to 
repay on identified maturity  dates is stated without condition.  
193. There is no evidence of the deceased demanding repayment on any of the relevant dates. 
The defendants submit that the explanation for this is that at all times the deceased was 
observing the Locanda deal. This expl anation is contradicted by the documents which 
evidence that when repayment dates fell due, instead of the deceased waiving 
repayment, the parties executed a document evidencing an agreed extended maturity 
date.  
194. The second promissory note and the Omn ibus Reaffirmation Agreement and Amendments 
thereto, refer to share options and transfers. They restate and extend maturity dates for 
the loans without rendering them conditional on a ‘loan for equity deal’.  
195. The plaintiff acquired shares in the eMuse  and Noster entities, but there is no evidence 
that in doing so he agreed to make the loan repayments conditional on an “equity” 
outcome. The only connection recorded is where reference is made to an extension of 
maturity dates in consideration for the gra nting of certain options. Once extended, the 
new maturity dates stood.  
196. No evidence is proffered to explain how it came to pass that all of the notes (with one 
exception) come to evolve from a variety of maturity dates to mature on a single date, 28 
February 2019, a date which was never extended.  
197. The defendant avers to spending time with the deceased in his apartment in the days 
before his death. He says that there was “no question of loans being called in, Mike 
having advanced other monies as rec ently as December 2018 ”. The court cannot 
speculate on the substance of this or other previous discussions, but the defendant’s 
affidavits contain no account or description whatsoever of the contents of conversations 
held in the period immediately prior to  the death of Mr. Forman. The defendant simply 
repeats the negative averment that “at no stage did Mike ever assert an obligation of 
repayment”.  
198. The averment by the defendant that “I always understood Mike to mean that – consistent 
with our agreement  – he would roll over the loans until the business was in a position to 
repay the loans or an expectation of an exit event”, is wholly inconsistent with the 
undisputed fact that on each occasion when a maturity date arose during the lifetime of 
Mr. Forman it was extended to a specific date and not by reference to the ‘Locanda deal’.  
199. The loans made during 2017 and 2018 did not become the subject of “annual rollovers”. 
When extended, they were extended to 28 February 2019.  
200. The first defendant prov ided an elaborate and expansive narrative of the interest the 
deceased took in the defendant’s business. This included a description of share options 
granted and of shareholdings acquired by the deceased. But there is no evidence to 
corroborate the asserti on that the loans made to the defendants, not being loans to the 
relevant companies, would not be repayable on their maturity dates. In circumstances 
where the parties documented each extension the documents evidence the fact that the 
repayment was not dec lared to be conditional. I have examined earlier in this judgment 
the limited number of emails and correspondence relied on by the defendants and have 
concluded that they amount to no such evidence.  
201. The affidavits of the defendants persuade me that t hey may have led themselves to 
believe that the deceased would not call for repayments of the debt until certain events 
occurred which put them in funds to pay, either out of company resources or on “exit 
event”. They may have been reinforced in this belie f by the many extensions granted for 
loan repayments, and the frequency of the extensions may have contributed to a sense 
that this practice would continue. Nonetheless, the intended defence rests on the 
proposition that if Mr. Forman had not died before t he expiry of the final extension of 
maturity dates, he would have granted further extensions. Beyond general statements of 
an “understanding”, no evidence has been advanced to support this speculative 
proposition.  
202. The result of these conclusions is th at the defendants make a bare assertion of a “loan for 
equity deal” which, for all its repetition and expansion, is no more than such an assertion 
and is contradicted by the executed promissory notes and agreements. Accordingly, their 
affidavits when scrut inised do not disclose an arguable defence to the claim.  
203. Estoppel cannot form the basis of a defence where no evidence is advanced of any 
reliance by the defendants to their detriment on either representation made by the 
plaintiff or on the “conventi on” of frequent extensions. The defendants benefitted from 
signing the promissory notes, agreements, and modifications.  
204. The court will enter judgment for the amounts claimed in this application, namely 
$4,708,739 against the first defendant, and $2,32 7.709 against the second defendant, 
together with interest at the contracted rate, less the credit of US$109,000 referred to in 
para. 11 of the second affidavit of Mr. Rainsford.