ACC Loan Management Ltd v Connolly

JurisdictionIreland
JudgeMr. Justice Gerard Hogan,Ms. Justice Finlay Geoghegan
Judgment Date04 April 2017
Neutral Citation[2017] IECA 119
CourtCourt of Appeal (Ireland)
Docket Number[C.A. No. 32 of 2016],Neutral Citation Number: [2017] IECA 119 Record No. 2016/32
Date04 April 2017

[2017] IECA 119

THE COURT OF APPEAL

Finlay Geoghegan J.

Hogan J.

Finlay Geoghegan J.

Hogan J.

Hanna J.

Finlay Geoghegan J.

Hogan J.

Hanna J.

Neutral Citation Number: [2017] IECA 119

Record No. 2016/32

A.C.C LOAN MANAGEMENT LIMITED
PLAINTIFF/RESPONDENT
AND
JOHN CONNOLLY

AND

MAURICE CONNOLLY
DEFENDANTS/APPELLANTS

Loans – Credit facilities – Extension of time – Appellant seeking an extension of time – Whether an arguable defence had been made out

Facts: The defendant/appellant, Mr Connolly, was the father of the first named defendant (the son). By a facility letter dated the 28th October, 2005, the plaintiff/respondent, ACC Loan Management Ltd (the bank), offered credit facilities in the sum of €680,000 to the son. The loan was accepted by the son. By a second facility letter dated the 30th November, 2007, the bank offered further facilities in the sum of €613,000 to the son. That loan was also accepted by the son. The security to be given for each loan pursuant to the facility letters included a guarantee and indemnity from the appellant supported by a first legal mortgage in charge on 35 hectares of agricultural lands in Co. Wexford. The bank contended that the appellant granted to it a first guarantee and indemnity dated the 4th November, 2005 and a second guarantee and indemnity dated the 23rd November, 2008. There was default in repayment of the loans, and letters of demand were sent to the son and the appellant. The bank issued a summons on the 24th May, 2013, seeking judgment against the son as principal debtor and the appellant as guarantor pursuant to the first and second guarantee. The bank issued a motion seeking liberty to enter final judgment against both defendants. Following the hearing of the application for summary judgment, the High Court (Fullam J) granted judgment against the appellant in favour of the plaintiff pursuant to the first guarantee dated the 4th November, 2005 and remitted to plenary hearing the issue of the appellant's liability under the second guarantee. Judgment was also given against the son for the full amount claimed. The bank subsequently ascertained that the figure of €1,185,255.55 was incorrect and it made an ex parte application to the High Court under O. 28, r. 11 and the order was amended by a further order made on the 16th November, 2015, which in accordance with its terms insofar as relevant, ordered that the order of the 12th February be amended by the deletion of the figure €1,185,255.55 and replacing same with the figure €1,061,357.98. The appellant issued a notice of expedited appeal to the Court of Appeal on the 22nd January, 2016. The respondent, in its notice, took as a preliminary point the fact that the appeal was out of time. The appellant issued a motion seeking an extension of time grounded on an affidavit of the appellant sworn on the 28th June, and it was agreed that the motion be heard with the substantive appeal.

Held by Hogan J that the appeal would be dismissed. Hogan J considered the English and Irish jurisprudence and principles applicable, and stated that notwithstanding his own earlier views on guarantees, it was key that as a member of a collegiate court an individual member respected the principle of stare decisis. de Kretser v Ulster Bank [2016] IECA 371 and Curran v Bank of Ireland [2016] IECA 399 applied.

Finlay Geoghegan J also handed down a judgment and held that the appeal must be dismissed.

Appeal dismissed.

JUDGMENT delivered by Ms. Justice Finlay Geoghegan on the 4th day of April 2017
1

This appeal primarily concerns the question as to whether a guarantor who does not contend that he entered into a guarantee under the undue influence or by reason of some other wrong of the principal debtor, such as misrepresentation, nevertheless has an arguable defence against a claim made by the creditor pursuant to the guarantee upon the grounds that the creditor, being on notice of a family relationship between the guarantor and the principal debtor, was obliged to take steps to ensure that the guarantor understood the nature of the guarantee and/or freely consented to the giving of the guarantee.

2

The respondent raises a preliminary objection to the appeal upon the grounds that it was out of time and the appellant has brought a motion seeking, if necessary, an order extending the time within which to bring the appeal.

3

There is also a subsidiary question in relation to the execution of the guarantee purporting to have been 'signed, sealed and delivered' but without evidence that a seal was affixed.

Background facts
4

The appellant is the father of the first named defendant ('the son'). By a facility letter dated the 28th October, 2005, the plaintiff ('the bank') offered credit facilities in the sum of €680,000 to the son. The purpose of the loan was to fund the purchase of a 1.7 hectare site with outline planning permission for five properties at Fethard-on-Sea, Co. Wexford. The loan was accepted by the son.

5

By a second facility letter dated the 30th November, 2007, the bank offered further facilities in the sum of €613,000 to the son for the purpose of building the first of the five houses and associated costs. That loan was also accepted by the son.

6

The security to be given for each loan pursuant to the facility letters included a guarantee and indemnity from the appellant supported by a first legal mortgage in charge on the 35 hectares of agricultural lands in Co. Wexford.

7

The bank contends that the appellant granted to it a first guarantee and indemnity dated the 4th November, 2005 and a second guarantee and indemnity dated the 23rd November, 2008.

8

There was default in repayment of the loans, and letters of demand were sent to the son and the appellant. The bank issued a summons on the 24th May, 2013, seeking judgment against the son as principal debtor and the appellant as guarantor pursuant to the first and second guarantee.

9

The bank in due course issued a motion seeking liberty to enter final judgment against both defendants. Affidavits were exchanged to which I will refer further below, and following the hearing of the application for summary judgment in the High Court (Fullam J.), that court, for the reasons set out in a written judgment delivered on the 12th February, 2015, granted judgment against the appellant in favour of the plaintiff pursuant to the first guarantee dated the 4th November, 2005 and remitted to plenary hearing the issue of the appellant's liability under the second guarantee. Judgment was also given against the son for the full amount claimed, from which there is no appeal.

10

Pursuant to that judgment an order was drawn by the High Court dated the 12th February, 2015, and perfected on the 4th June, 2015. It provided, insofar as the appellant is concerned, that 'the plaintiff do recover against the defendants jointly and severally in the sum of €1,185,255.55 in respect of the first loan and guarantee' and remitted the claim against the appellant in respect of the second guarantee to plenary hearing.

11

No step was taken by the appellant within the ten day period permitted for an expedited appeal following the perfection of the said order.

12

It appears that the bank subsequently ascertained that the figure of €1,185,255.55 was incorrect and it made an ex parte application to the High Court under O. 28, r. 11 and the order was amended by a further order made on the 16th November, 2015, which in accordance with its terms insofar as relevant, ordered that the order of the 12th February, be amended by 'the deletion of the figure €1,185,255.55 where same appears in the said order and replacing same with the figure €1,061,357.98'. That order was perfected on the 14th January, 2016. The appellant issued a notice of expedited appeal on the 22nd January, 2016, i.e. within ten days of the perfection of the second High Court order. The respondent, in its notice, took as a preliminary point the fact that the appeal was out of time. The appellant issued a motion seeking an extension of time grounded on an affidavit of the appellant sworn on the 28th June, and it was agreed that the motion be heard with the substantive appeal.

13

In his affidavit, the appellant has sworn that it was always his intention to appeal the order of the 12th February, 2015, insofar as it related to the summary judgment granted against him, but that as the order was not perfected until the 4th June, 2015, neither he nor his solicitor became aware of the order having been perfected until after the period of time for filing the notice of appeal. He seeks to contend that as his appeal is against both orders, the second of which was perfected on the 14th January, 2016, that his appeal was in time. In the alternative he seeks an extension of time.

14

I do not consider that the appeal against the order granting summary judgment was lodged in time. The substantive order is the order of the 12th February, 2015. The amendment properly sought and obtained on behalf of the bank was to the benefit of the appellant as it reduced the amount for which judgment was ordered against him. The second order provides for an amendment to the substantive order.

15

I recognise that where there is significant delay in the perfection of an order, it may give rise to its perfection being overlooked by a client or his solicitor.

16

In accordance with the well known principles in Eire Continental Trading Company Limited v. Clonmel Foods Limited [1955] I.R. 170, by reason of the averment of the appellant that he always intended to appeal the decision granting the summary judgment against him, it appears that the primary matter for consideration by the court is whether or not the appellant has arguable grounds of appeal. In circumstances where the full appeal has been argued before the court and raises an important point, it appears...

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13 cases
  • Barry v Ennis Property Finance Dac
    • Ireland
    • High Court
    • 21 December 2018
    ...that decision in detail and refer to the Court of Appeal's interpretation of it, as expressed in ACC Loan Management Ltd v. Connolly [2017] IECA 119 and Ulster Bank v. De Krester & Fox [2016] IECA 371. The plaintiff also relies on the Court of Appeal's decision in ACC Bank v. Walsh [2017......
  • Allied Irish Banks Plc v Doran
    • Ireland
    • High Court
    • 11 January 2018
    ...of a real and bona fide defence. The Court relied on the decision of the Court of Appeal in ACC Loan Management Ltd v. Connolly [2017] IECA 119. The Court stated that the defendant was aware of the endorsement of claim and what case he had to meet. JUDGMENT of Mr Justice Max Barrett deliver......
  • Reidy v The Governor and Company of the Bank of Ireland
    • Ireland
    • Court of Appeal (Ireland)
    • 8 August 2023
    ...need to adapt to meet the demands of justice in a modern legal system. As Hogan J. stated in ACC Loan Management Limited v. Connolly [2017] 3 I.R. 629, ‘If equity will not bring that moral element to the common law and ensure that in a modern setting the vulnerable are adequately protected,......
  • Fabri Clad v Stuart
    • Ireland
    • Court of Appeal (Ireland)
    • 27 August 2020
    ...to same. Reliance was placed on two decisions of this court in support of that contention; ACC Loan Management Ltd. v. Connolly [2017] IECA 119, [2017] 3 I.R. 629 and McDonnell v. Ring [2016] IECA 16, and the decision of the High Court in Allied Irish Banks plc v. McKenna [2014] IEHC 51 It ......
  • Request a trial to view additional results
1 books & journal articles
  • Equity and the Law of Trusts in Ireland (7th edition) by Hilary Biehler
    • Ireland
    • Hibernian Law Journal No. 19-2020, January 2020
    • 1 January 2020
    ...remedies, occasional or otherwise, it is undoubtedly a worthy addition to your library. 32 [2016] IECA 399. 33 [2016] IECA 371. 34 [2017] 3 IR 629 (CA). 35 Biehler (n 1) 905–912. 36 Hilary Biehler, ‘Undue Inluence and third Parties – An Update on the Position in Ireland’ (2019) 37 (13) ILT ......

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