Allied Irish Banks Plc v MacMorland

• Jurisdiction: Ireland
• Judge: Ms. Justice O'Regan
• Judgment Date: 27 July 2016
• Neutral Citation: [2016] IEHC 507
• Docket Number: [2014 No. 1606 S.]
• Court: High Court
• Date: 27 July 2016

[2016] IEHC 507

THE HIGH COURT

O'Regan J.

[2014 No. 1606 S.]

BETWEEN

ALLIED IRISH BANKS PLC.

PLAINTIFF

AND

KENNETH MACMORLAND

DEFENDANT

Banking & Finance – Summary judgement – Defence – Plenary hearing – Terms of the contract of loan – Full guarantee – Non est factum – Waiver of independent legal advice – Special Condition

Facts: The plaintiff, in the present case, sought an order for summary judgement. The defendant sought to adjourn the matter for plenary hearing on certain defences such as non est factum in relation to full guarantee, breach of the need for independent legal advice as a condition precedent within the letter of the loan offer.

Ms. Justice O'Regan granted an order for summary judgement for the amount sought to the plaintiff and refused the request of the defendant to adjourn the matter for plenary hearing. The Court found that the defendant, to remit the matter for plenary hearing, had raised no reasonable defence. The Court found that there was no basis of the defence of non est factum or assertion by the defendant about his lack of knowledge of signing a full guarantee where no time limit was involved. The Court held that the terms of the contract of the loan were for the benefit of the plaintiff and the plaintiff had the entitlement to waive it, and it was severable from the balance of the document. The Court found that the loan document did not state the requirement of either independent legal advice or waiver in respect to guarantee was a condition precedent as claimed by the defendant, but rather it was a special condition for the benefit of the plaintiff.

EX TEMPORE JUDGMENT of Ms. Justice O'Regan delivered on the 27th day of July, 2016

1 These proceedings come before the Court on foot of a summary summons of the plaintiff of 19th June, 2014 and in effect summary judgment is sought in the sum of €6,091,208. There was a misstatement in the notice of motion but by consent that has been amended.

2 An appearance was put in by the defendant and subsequently a notice of intention to proceed on 29th July, 2015 was served by the plaintiff and the within motion was then processed, dated 5th August, 2015. The plaintiff's motion is grounded on the affidavit of Joe Lyons of 28th July, 2015 and the defendant has responded in resisting the motion by an affidavit of 17th November, 2015 in which he claims to be a tax consultant and company secretary.

3 One of the grounds on which the defendant seeks to remit the matter to plenary hearing is because he wants to examine or cross examine Margaret O'Donnell. Ms. O'Donnell didn't put in an affidavit but there is an assertion made by the defendant to the effect that it was because of a representation made by her to the defendant that in fact the defendant agreed to sign the full guarantee of 26th October, 2006. On the other hand the plaintiffs accept that the defendants' evidence in this regard must be taken at its height so the need to examine or cross examine Margaret O'Donnell does not arise in my view and could not possibly be a basis to adjourn the matter for a plenary hearing.

4 By way of factual background, I do note that an allied matter in which the defendant was involved ( Grady & Ors v. McMoreland & Ors, Unreported, High Court) came before Ryan J. who delivered a judgment on 3rd February, 2012 and somewhat contrary to the assertion made in these proceedings by Mr. McMorland, Ryan J. found, at para. 9 where he states as follows:-

‘ Mr. McMorland moved quickly. He put together a consortium of local investors to back the project. On 11th April, 2006 a contract for the sale of land was signed by a solicitor in trust for Mr. McMorland and Mr. Jackie McMahon. They in turn were acting on behalf of the consortium. The price was €9,850,000 plus VAT and the solicitor paid the deposit of €985,000 which was later reimbursed by the investors.’

5 That case demonstrates that not only is the defendant a tax consultant and company secretary, but he was also the promoter of the relevant company being Forresthaze Developments Limited and he was its CEO. That company was incorporated on 17th July, 2006.

6 Initially Mr. McMorland signed a guarantee commensurate with his shareholding in this company which was 14 % and that partial guarantee was executed on 25th October, 2006. He subsequently signed a full guarantee for the full indebtedness of the company on 26th October, 2006 following an amended letter of sanction which was also signed by him.

7 In these circumstances the issues that arise at present would be:

i. In what circumstances might summary judgment be afforded, or should it be adjourned for summary hearing.

ii. The full guarantee and the lack of legal advice in advance of that, and representation by Ms. McDonnell.

iii. The fact that Mr. McMorland was not requested to secure independent legal advice nor does he waive same in advance of the full guarantee.

iv. Mr. McMorland also suggests that if he had known about the restructuring in February, 2010 he would have orchestrated a set of circumstances whereby that would not...