Allied Irish Banks Plc v Higgins and Others
 IECA 23
THE COURT OF APPEAL
Finlay Geoghegan J.
Appeal No. 2014/196
[Article 64 Transfer]
Banking and finance – Facilities – Non est factum – Plaintiff seeking repayment of facilities – Whether defendant has an arguable defence of non est factum
This judgment is given on an appeal brought by the third named defendant, James Mansfield (‘Mr. Mansfield’) against an order of the High Court (Kelly J.) made on the 3rd June, 2010 and perfected on the 17th June, 2010, granting summary judgment against Mr. Mansfield in the sum of €6,324,959.81.
A notice of appeal to the Supreme Court (204/2010) against the judgment of the High Court was filed on 25th June, 2010 on behalf of Mr. Mansfield. Prior to the establishment of the Court of Appeal on the 28th October, 2014, a hearing date had not been fixed. The appeal fell within the class of appeals transferred to the Court of Appeal pursuant to the Direction issued by the Chief Justice with the concurrence of the other judges of the Supreme Court pursuant to Article 64.3.1 of the Constitution on the 29th October, 2014. No objection was made by either party to the transfer of the appeal.
The Court reserved its judgment at the end of the hearing and now gives its decision. The Court is in agreement on the outcome of the appeal and the reasons therefore and hence has decided to deliver a single judgment of the Court.
In the High Court, at the date of issue of the summary summons, the plaintiff's claim against all four defendants was for a sum of €6,288, 437.13 for principal and interest allegedly due by the defendants jointly and severally in accordance with an agreement in writing evidenced in a letter of sanction dated the 19th January, 2009 and accepted by each of the defendants signing same on the 20th January, 2009.
The proceedings were entered into the Commercial List and upon the summary judgment application all four defendants sought to put forward an arguable defence upon the basis that the borrowings in question were made from the plaintiff (‘AIB’) as ‘consumers’ within the meaning of the Consumer Credit Act 1995. The trial judge found that there was no arguable defence upon such a basis and no appeal has been pursued by Mr. Mansfield against that determination. The remaining three defendants did not appeal the order granting judgment against each of them.
Mr. Mansfield advanced two further defences. Firstly, in relation to the claim made by AIB that the facilities in question were advanced to the defendants as members of a partnership, namely the ‘Duleek Partnership’ which they had formed for the purpose of acquiring certain lands in Duleek, Co. Meath and developing those lands for onward sale. Mr. Mansfield contended that he was not involved in the partnership. Rather that he was only involved in the purchase of the lands and only liable for one sixth of an initial borrowing of €673,000 for the purchase of a 1.1 acre site upon the basis that he was a one sixth co-owner of the said lands, but had nothing to do with subsequent borrowings in respect of the development of all the lands. The trial judge found upon the evidence before him that there was no arguable defence upon such a basis. There is no appeal by Mr. Mansfield against the rejection of that defence.
The second defence put forward was that of non est factum in relation to the alleged agreement in writing signed by Mr. Mansfield on 20th January, 2009. The trial judge found that there was no such arguable defence on the evidence before the High Court. The appeal is against that determination. Prior to considering the issues on the appeal it is necessary to set out in summary the relevant facts and evidence before the High Court.
The facts and evidence before the High Court relevant to the appeal were set out in two affidavits sworn on behalf of the plaintiff by Mr. Frank Dennehy and two affidavits of Mr. Mansfield sworn on the 29th March, 2010 and 26th April, 2010 respectively and the exhibits to those affidavits. There were also affidavits from the other defendants which are not germane to the appeal. The agreement comprised in the letter of sanction dated the 19th January, 2009, allegedly accepted by the defendants on the 20th January, 2009, upon which AIB sought judgment against all four defendants was the fifth letter of sanction relevant to the two facilities referred to therein.
The background to the facilities granted by AIB to the four defendants was the purchase by the four defendants of a property of 4.5 acres in Duleek, Co. Meath. That was purchased with funds of the four defendants in differing amounts. Subsequently it was decided by the four defendants to purchase an adjoining site of 1.1 acres. On the 19th April, 2004, all four defendants accepted a facility of €673,000 offered by AIB in a letter of sanction dated the 3rd March, 2003. It is not in dispute that all four defendants signed and accepted the facility which was subsequently drawn down, security having been given by way of legal charge over each site.
By letter of sanction of the 15th August, 2006, AIB offered to the four defendants a further facility of €3,461,000 to fund the development of two 2.5 story blocks containing 23 apartments, 6 commercial/retail units, crèche and underground car parking on the site in Duleek, Co. Meath. It is not in dispute that the facility was drawn down. The defendants other than Mr. Mansfield did not dispute that they signed and accepted the letter of sanction. The...
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