Allied Irish Bank Plc v Casey
| Jurisdiction | Ireland |
| Judge | Mr. Justice Barr |
| Judgment Date | 15 March 2016 |
| Neutral Citation | [2016] IEHC 192 |
| Docket Number | [2014 No. 2381 S.] |
| Court | High Court |
| Date | 15 March 2016 |
[2016] IEHC 192
[2014 No. 2381 S.]
THE HIGH COURT
Banking & Finance – Non-payment of loan – Summary judgment – Contract of guarantee – bona fide defence
Facts: The plaintiff sought an order for summary judgment against the defendant on foot of a contract of guarantee executed by the defendant in favour of the plaintiff; thereby, she guaranteed to pay the entire liabilities of her husband. The defendant took the defence that since she had become estranged from her husband, her signatures on the relevant documents were forged, and that she failed to seek an independent legal advice and also that the said contract was void for want of consideration as the monies had been advanced to her husband prior to the execution of the contract of guarantee.
Mr. Justice Barr granted an order for summary judgment to the plaintiff. The Court held that in an application for summary judgment, the Court had to evaluate the cogency of the evidence while taking the entire circumstances of the case. The Court observed that since the defendant's own handwriting expert had found that the signature of the defendant on the said contract of guarantee was genuine, the defendant failed to assert a bona fide defence. The Court observed that once the defendant took the stand that she did not sign the document; she could not be allowed to make defences contradictory to that stand viz. failure to seek independent legal advice or lack of consideration. The Court held that a defendant resisting an order for summary judgment must establish an arguable case and that there existed issues of facts that needed to be determined for resolving the disputed issues.
In this application, the plaintiff seeks summary judgment as against the defendant in the sum of €216,000.00, together with interest thereon from 8th September, 2014, at current bank rates until payment or judgment. The plaintiff sues on foot of a contract of guarantee allegedly signed by the defendant on 3rd June, 2010. Under that contract, the defendant guaranteed the present and future indebtedness of her husband, William Casey, with the plaintiff. It is alleged that on 15th March, 2011, Mr. Casey entered into a credit agreement with the plaintiff. It is also alleged that the defendant signed this agreement.
It is alleged that Mr. Casey defaulted on the repayments due under the credit agreement. The defendant was then asked to pay the sum due under the contract of guarantee. When the defendant refused to pay this sum, the present proceedings issued.
In her defence, the defendant states that, in the course of family law proceedings with her estranged husband, it has come to light that her signature was forged on a number of documents. It is the defendant's case that her signature was forged on the contract of guarantee dated 3rd June, 2010, and on the credit agreement dated 15th March, 2011. In these circumstances, the defendant submits that there are serious issues raised and that it is not a matter that is suitable for disposal by way of summary judgment. The defendant has asked the court to remit the matter to plenary hearing.
The plaintiff's application for summary judgment is grounded on an affidavit sworn by Ms. Jo Ann Shannon, a case manager with the plaintiff bank, sworn on 20th January, 2015. In the affidavit, Ms. Shannon stated that the defendant, by way of an agreement in writing with the plaintiff dated 3rd June, 2010, agreed in favour of the plaintiff to guarantee the obligations of Mr. William Casey, the defendant's estranged husband (hereinafter the Principal Borrower) pursuant to a credit agreement dated 15th March, 2011, between the Principal Borrower and the plaintiff, to an amount not exceeding €216,000.00 together with interest thereon. A copy of the credit agreement and contract of guarantee were exhibited in the affidavit.
Under the terms of the credit agreement, the plaintiff agreed to make available to the Principal Borrower, credit facilities in the amounts of €206,000.00 and STG£152,000.00, secured, inter alia, by means of mortgages over certain properties held by the Principal Borrower and assignments of life assurance policies on his life, as well as the contract of guarantee, whereby the defendant guaranteed the performance by the Principal Borrower of his obligations under the credit agreement to an amount not exceeding €216,000.00.
Ms. Shannon went on to state that the credit agreement provided that each facility was to be repaid on 28th February, 2012, by a single repayment equivalent to the principal borrowed, plus interest accrued, as at the date of final repayment, but with the facilities being extendable. The rate of interest applicable to the first facility was stated to be base lending rate varying plus 3% per annum (4.067% at the date of offer). The rate of interest applicable to the second facility was stated to be market related rate plus 1% per annum.
Ms. Shannon stated that funds were originally drawn down on 24th October, 2006, and in this regard she exhibited statements recording the said draw down. Interest was charged on the said facility in accordance with the terms of the credit agreement. It was further stated that the Principal Borrower failed to abide by the terms of the credit agreement in relation to repayment thereof and the loan account went into arrears. That represented an Event of Default under the terms of the credit agreement, entitling the plaintiff to demand repayment, within seven days, of principal and interest due and all monies and liabilities owing on foot of the credit agreement.
By letter dated 3rd February, 2014, addressed the to the Principal Borrower, the plaintiff formally demanded repayment by the Principal Borrower within seven days under the credit agreement as outlined therein. A copy of this correspondence was exhibited in the affidavit.
Despite the said demand, the Principal Borrower failed, refused or neglected to pay the sum demanded therein or any sum in satisfaction or reduction of his liabilities to the plaintiff. It was further stated that the Principal Borrower failed to engage in any meaningful way with the plaintiff. Ms. Shannon stated that the sums demanded in the letter of 3rd February, 2014, remained due and owing, together with daily interest accruing thereon.
By letter dated 8th September, 2014, the plaintiff formally demanded payment by the defendant on foot of the said guarantee agreement within seven days. A copy of that letter was exhibited in the affidavit.
Ms. Shannon stated that despite the said demand, the defendant had failed, refused or neglected to pay the sum demanded, or any sum, in satisfaction or reduction of her liabilities to the plaintiff, or to engage with the plaintiff in any or any meaningful way. Ms. Shannon stated that the sum demanded in the letter dated 8th September, 2014, remained due and owing by the defendant to the plaintiff.
Ms. Shannon stated that the proceedings were commenced by way of summary summons issued on 24th September, 2014. An appearance thereto was entered by the defendant on 23rd October, 2014. Ms. Shannon stated that it was her belief that the defendant did not have any bona fide or arguable defence to the claim made in the proceedings and that the appearance had been entered solely for the purpose of delaying the plaintiff in obtaining judgment. Accordingly, she prayed for judgment as against the defendant.
The defendant has sworn a number of affidavits in the proceedings. The defendant stated that she had become estranged from her husband and they separated. There followed acrimonious family law proceedings before the Circuit Family Court in Cork. The defendant stated that in the course of those proceedings, she became aware that her signature had been forged on a number of documents, which had been made available by way of discovery. While she did not explicitly say so, the clear inference put forward by the defendant, was that her husband, or someone acting at his behest, had wrongfully forged her signature to the documents.
In support of this contention, the defendant exhibited a number of reports from a handwriting expert, Mr. David Madden. Initially, he had had to make his report based on photocopies of original documentation, as these were the only documents then available to the defendant.
The defendant stated that she had no knowledge at all of the credit agreement or of the contract of guarantee. She believed that her signature had been forged on the originals of these documents.
In a supplemental affidavit sworn on 16th April, 2015, the defendant stated that in the circumstances, where there was extensive forgery of her signature on documents, it would be necessary for her handwriting expert to have access to the originals of the credit agreement and the contract of guarantee so as to carry out a full forensic examination thereof. She stated that the credit agreement dated 15th March, 2011, had not been signed by her and her alleged signature on the document was a simulation. In relation to the contract of guarantee, she had no recollection of signing the alleged guarantee on 3rd June, 2010. She stated that she had not attended at the offices of AIB at 66 South Mall, Cork, to sign that document. She stated that to the best of her knowledge and belief she did not sign the contract of guarantee.
Without prejudice to the main plank of her defence in relation to forgery of her signature, she stated that it appeared from the statements of accounts which had been made available, that the funds therein were drawn down in October 2006, and April 2009, respectively. She stated that she...
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