AIB v O'Toole
| Jurisdiction | Ireland |
| Judge | MR. JUSTICE MICHAEL PEART |
| Judgment Date | 22 March 2018 |
| Neutral Citation | [2018] IECA 93 |
| Date | 22 March 2018 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Neutral Citation Number: [2018] IECA 93 Record Number: 51/2017 Record Number: 52/2017 |
AND
AND
[2018] IECA 93
Neutral Citation Number: [2018] IECA 93
Record Number: 51/2017
Record Number: 52/2017
THE COURT OF APPEAL
Banking and finance – Loans – Letters of demand – Failure to repay – Summary judgment
Facts: The appellants had been granted loans by the respondent bank, and had failed to repay them following the issue of letters of demand. Summary summons were served, and the respondent’s application for summary judgment was granted. The appellants now sought to appeal, contending that the loans were limited recourse loans, and the respondent had already exhausted the available remedies against the appellants.
Held by Peart J, the other Justices concurring, that the appeals would be dismissed. The appellants had failed to surmount the threshold necessary for having an application for summary judgment transferred to a full plenary hearing.
There are two appeals before the Court for determination. In each case an order of the High Court (Noonan J.) each being dated the 20th January 2017 was made whereby summary judgment was granted against the defendants on foot of a summary summons. In Appeal No. 51/2017 the amount of that judgment is €12,043,075. In Appeal No. 52/2017, the amount of the judgment is €776,159.64. The summary summons in each case sought judgment in respect of sums alleged to have been borrowed by the defendants on foot of certain loan offers which were duly accepted by the defendants, and were not repaid following the issuing of letters of demand by the bank.
Following service of these summary summonses on the defendants, and the entry of an appearance, the bank sought summary judgment on foot of notices of motion each dated the 18th September 2015 which eventually came before Mr Justice Noonan for hearing on the 20th January 2017.
The defendants sought to have each case adjourned to a full plenary hearing on the basis that in their replying affidavits they had raised bona fide and arguable defences to the bank's claims such that a plenary hearing was required to fairly determine the issues. The bank resisted that application and sought judgment in each case on the basis that the defendants had not raised any arguable defence for determination. The trial judge was satisfied that no arguable defence had been raised to the bank's claims and granted summary judgment in the amounts shown above. The defendants now appeal to this Court.
The issues sought to be raised by the defendants by way of defence to the bank's claims are the same in each of the proceedings. The appeals can therefore be conveniently dealt with together.
At the heart of these appeals is the defendants' contention, which was rejected in the High Court as an arguable defence, that the loans in respect of which the bank seeks to recover judgment were at all times intended by the bank, and understood by the defendants to be, limited recourse loans, meaning that any recourse by the bank in the event of a default would be limited to the security given to the bank as a condition of the loans. In circumstances where the bank has already taken possession of those secured properties, the defendants contend that the bank has no further recourse against them.
In the High Court, the defendants had sought to make that argument on the basis firstly of a misrepresentation by the bank. Counsel for the defendants has helpfully indicated at the outset of these appeals that misrepresentation as such is not being pressed in oral argument upon on this appeal, and neither is argument also advanced and rejected in the High Court based on an alleged infringement of rights under the Data Protection Acts.
It is accepted that the loan offer letters underlying the loans which the bank seeks to recover make no reference to them being given on a limited recourse basis. But the defendants have sought to argue that the terms of these letters do not represent the entire of their agreement with the bank, and seek to rely on discussions and assurances which they say were given to them by the bank at certain meetings that any recourse would be limited to the security given. The bank deny that any such assurances were given, and say that the defendants are confusing these particular loans, which were loans to the defendants personally, with earlier loans to their company, Burgrove Limited where the loan offer letter specifically stated that there was to be limited recourse. The bank submits that the defendants' assertions are no more than bald assertions, uncorroborated or unsupported in any way by the clear documentary evidence in this case, and in fact are in conflict with and inconsistent with the documentary evidence available.
In his ex tempore judgment delivered on the 20th January 2917, having addressed other arguments raised by the defendants, the trial judge addressed what he described as ‘the main point in the case’ as follows:
‘12. The main point in the case, it seems to me, is that all of these loans according to the defendant's case were non-recourse loans. In other words recourse could only be had by the bank to the underlying securities but not to the defendants personally and the defendants have sworn that oral agreements to that effect were made in the course of discussions and meetings between the defendants and the bank, in or around the middle of 2008. It is said on behalf of the defendants that there is contemporaneous correspondence which bears out their case in this regard. That correspondence which I have had the opportunity of reading, is correspondence between their solicitors and also their accountants and financial advisers, and the bank.
13. It is certainly true to say that the question of non-recourse was discussed in this correspondence, but it seems to me absolutely clear, and it was sworn to by the bank that the nonrecourse issue arose in the context of entirely unrelated loans to the O'Tooles' company Burgrove which were indeed, as the documents show, limited recourse loans to the defendants in respect of the Burgrove debt, which as I say, is entirely separate and distinct from the claims that are the subject matter of these proceedings.
14. Having said all that however, it seems to me that the cardinal point in this regard is that subsequent to this correspondence, as I say which dates from the middle of 2008, each of the defendants executed the sanction letters, and the sanction letters themselves are entirely inconsistent with the case they now seek to make. They contain no proviso of any kind in relation to the loans being non-recourse in significant contrast to the loan documentation with regard to Burgrove which expressly limits the recourse which is available to the bank.
15. It is important I think to note in this connection this was a sophisticated and complex business transaction freely entered to by intelligent businessmen with the benefit of both legal and accounting advice. There is no suggestion nor could there be that they did not understand the nature of the documents they were signing or that they thought they were signing something different from that which was actually signed, defences that are frequently raised in this court by parties to resist claims for summary judgement by the bank. None of that, as I say, arises nor could it arise in circumstances where the defendants were fully and comprehensively professionally advised at all times, up to and including the signing of the relevant contractual documents that are the subject matter of these proceedings.
16. The courts have repeatedly said, and Mr Beatty SC [counsel for the bank] has referred to the judgement of Clarke J. in ACC Bank Plc v Kelly [2011] IEHC 7 which I think is a precursor of that, the courts have repeatedly said that business people such as the defendants are bound by documents they sign whether they read them or not, and it is hardly necessary to say that were it otherwise the whole foundation of business and commerce would cease.
17. People have to take responsibility for what they sign and they may with the benefit of hindsight consider their decision to have been unwise, but that does not as a matter of law provide a defence. It seems to me in addition to all of that, the evidence of the kind the defendants seek to rely on in this case by way of parol evidence of the alleged either collateral agreement or indeed the underlying agreement really is not something that can be admitted, as McGovern J. pointed out in the case that was opened to me earlier by Mr Beatty.’
Having so stated, the trial judge went on to conclude that the defendants had not met the test stated by the Supreme Court in Aer Rianta v. Ryanair [2001] 4 I.R. 607, not having shown a fair and reasonable probability of having a bona fide defence to the claim. He stated:
‘Mere assertions appear to me to be what arises in this case. Not only are those assertions not supported, in my view, by any corroborative evidence but they are entirely contradicted by the documentary evidence that is before the court.’
The defendants have sought on this appeal to argue that the trial judge ought not to have shut them out from adducing oral evidence of discussions with bank officials which they say support their argument that these loans were limited recourse loans,...
To continue reading
Request your trial
-
Allied Irish Banks Plc v Namdawn Ltd ; Allied Irish Banks Plc v Hirar Properties Ltd ; Allied Irish Banks Plc v NCW Properties Ltd
...AIB and the defendants, as merely aspirational and not legally binding. 21 Also relevant is the Court of Appeal case of AIB v. O'Toole [2018] IECA 93. This also concerned an alleged agreement between the defendants in that case and AIB, to the effect that the loans in question were non-rec......
-
Allied Irish Bank Plc v Cuddy
...Ltd v O' Connell [2013] IEHC 197 (both decisions of the High Court) and the decision of this Court in Allied Irish Bank v O' Toole [2018] IECA 93. In the Judge's view, these authorities established as a general principle that the evidence relied on by Mr Cuddy for the purpose of establishin......