Allied Irish Bank Plc v Fahey
 IEHC 182
THE HIGH COURT
[2013 No. 3244 S]
Banking & Finance – Non-payment of loan – Summary judgment – Bona fide defence – Non est factum
The plaintiff seeks summary judgment against the defendants for €2,771,745.27.
The plaintiff claims that by letter of sanction dated the 2nd December, 2008 the Bank agreed to provide two relevant loan facilities to the defendants. It is said that the letter of sanction was executed by the defendants on the 27th February, 2009.
The first facility, the subject of these proceedings was in the amount of €2,420,000.00 the purpose of which was to finance the purchase of the ‘Briar Rose Bar and Restaurant’, Douglas, Cork. The loan was repayable over 25 years by consecutive repayments of €13,775.00 per month commencing on the 2nd January, 2009. Any residual balance was repayable at the end of the period. The statement of account in respect of this loan facility is set out in loan account number 93608112440142 operated by the defendants at the plaintiff's Business Banking Department, 66 South Mall, Cork.
The next relevant facility in the letter of sanction was in the amount of €1,100,000.00 the purpose of which was to finance the purchase of a 9 acre site with dwelling house at Inchydoney, Co. Cork costing €1,000,000.00 plus stamp duty and costs. A statement in respect of this loan account number 93608112440225 operated by the defendants at the plaintiff's Business Banking Department at 66 South Mall, Cork was exhibited. Mr. Richard Stafford, a bank official employed by the plaintiff, submitted an affidavit as manager of the plaintiff's Financial Solutions Group based at Matthew House, Fr. Matthew Street, Cork. He made the affidavit on the plaintiff's behalf and upon their instructions and did so from facts within his own knowledge ‘and from inspection of the plaintiff's books and records pertaining to the defendants.’
At paragraph 8 of the affidavit he states that the defendants are in default of their repayment obligations in respect of each of the loan accounts and that the last payment made by them in respect of either account was the 6th January, 2012. He further deposes that by separate letters of the 29th August, 2013 the plaintiff, through its solicitors, demanded repayment of the aggregate sum of €3,431,995.27 from each of the defendants separately which they failed to discharge.
The letters of demand are in identical terms. They were issued by the solicitors on behalf of the Bank and state as follows:-
‘We confirm that we act as solicitors on behalf of Allied Irish Banks Plc who have instructed us to collect from you the sum of €3,431,995.27 due on foot of the above accounts as at the 27th August, 2013.
Kindly note that if the above sums due are not discharged to this office immediately, our instructions are to issue proceedings against you without further notice…’
The letter of sanction offering the loan facilities specifically stated that the offer was subject to the terms and conditions set out in the letter but also subject to the Bank's General Terms and Conditions Governing Business Lending, a current copy of which was enclosed.
The letter adds in bold type ‘these are legal documents and should be read very carefully’.
The relevant terms of the ‘General Terms and Conditions Governing Business Lending’ (June, 2008) relied upon are:-
Repayable on Demand
3.1.1 Loan account facilities are repayable on demand. However in normal circumstances, the bank expects that the loan will be available as stated in the letter of sanction.
3.1.2 Without prejudice to the Bank's right to demand repayment at anytime, the happening of any of the events set out in Clause 4.2 may lead to the Bank making demand for payment, with or without notice to the Borrower…
Events of Default
4.2 A term loan though expressed to be repayable over or within a specified period may be terminated by the Bank and the Bank may demand early repayment at any time with or without notice to the Borrower on the occurrence of any of the following events:
(i) On the failure by the Borrower to make any repayment of principal or interest on the date it is due…’
The application for judgment in default of defence was initially resisted on the basis of an affidavit sworn by Mr. Liam Fahey on 19th November, 2014. The merits of the plaintiff's claim are not addressed in any detail. The following assertions are made:
(1) It is said that the contents of Mr. Stafford's affidavit are hearsay and not admissible in evidence and that it does not explain his authorisation to swear an affidavit on behalf of the plaintiff.
(2) The plaintiff is put on full proof of any alleged agreement of loan or debt.
(3) It is said that copies of documents are inadmissible in evidence.
(4) It is said that the plaintiff has not proved any letter of demand and that any letter sent on the 29th August, 2013 did not comply with the terms of any alleged agreement and is not a letter of demand within the meaning of any alleged agreement. In the circumstances therefore it is averred that ‘any debt owed to the plaintiff may not be properly due as alleged’.
(5) It is claimed that Mr. Fahey has a bona fide defence to the plaintiff's claim. However, he declines to set that defence out. He says that he is prejudiced and embarrassed ‘in more fully setting out my defence to the within claim without an opportunity to seek discovery of the records in the possession of the defendant’. He states that his previous solicitors wrote to the plaintiff on the 14th November, 2013 requesting information and he awaited a reply. In the circumstances he claimed that it...
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