Allied Irish Banks Plc v Stack
| Jurisdiction | Ireland |
| Judge | Ms. Justice Irvine |
| Judgment Date | 10 May 2018 |
| Neutral Citation | [2018] IECA 128 |
| Date | 10 May 2018 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Neutral Citation Number: [2018] IECA 128 |
AND
[2018] IECA 128
Irvine J.
Irvine J.
Whelan J.
Gilligan J.
Neutral Citation Number: [2018] IECA 128
Record Number 2017/296
THE COURT OF APPEAL
Plenary hearing – Guarantees – Credible defence – Appellants seeking an order setting aside the order of the High Court and replacing it with an order referring the proceedings to a plenary hearing – Whether appellants had demonstrated the probability of a credible defence
Facts: The plaintiff/respondent, Allied Irish Banks plc, by summary summons dated the 12th February 2015, issued proceedings seeking judgment against the defendants/appellants, Mr and Mrs Stack, jointly and severally for a sum of €3,016,995 on foot of guarantees allegedly signed by them on the 13th July 2010. By an order dated the 26th May 2017, the High Court (Noonan J) granted judgment against the appellants for a sum of €2,253,590.84. Noonan J also made an order that they pay the costs of the proceedings when taxed and ascertained. The appellants appealed to the Court of Appeal seeking an order setting aside the order of the High Court judge dated the 26th May 2017 and replacing it with an order referring the proceedings to a plenary hearing. They submitted that the bank altered the nature of its claim and that the signature on Mrs Stack’s guarantee was a forgery. They submitted that they had demonstrated the probability of a credible defence and that the High Court judge had erred in law in granting summary judgment against them.
Held by Irvine J that the evidence before the High Court judge was such that he could not be stated to have erred in law or in fact when he granted judgment in favour of the bank against the appellants for the sum of €2,253,590.84 and costs, the same to be taxed and ascertained. Irvine J held that the evidence advanced by the appellants did not reach the relevant threshold as advised in Aer Rianta v Ryanair [2001] 4 IR 607, First National Commercial Bank v Anglin [1996] 1 IR 75 and Irish Bank Resolution Corporation v Gerard McCaughey [2014] 1 IR 749. Irvine J held that they did not establish that they had a fair or reasonable probability of the existence of a bona fide and credible defence to the claim.
Irvine J held that she would dismiss the appeal.
Appeal dismissed.
This is an appeal brought by Patrick Stack and Mary Stack (‘Mr. & Mrs. Stack’) against the order of the High Court, Noonan J., dated the 26th May 2017. By his order dated the 26th May 2017 he granted judgment against Mr. & Mrs. Stack for a sum of €2,253,590.84. He also made an order that they pay the costs of the proceedings when taxed and ascertained.
By notice of appeal, undated, the defendants seek an order from this court to set aside the order of the High Court judge and replace it with an order referring the proceedings to a plenary hearing.
By summary summons dated the 12th February 2015 Allied Irish Banks plc (‘the bank’) issued summary summons proceedings seeking judgment against Mr. & Mrs. Stack jointly and severally for a sum of €3,016,995 on foot of guarantees allegedly signed by them on the 13th July 2010.
By notice of motion dated the 28th May 2015 the bank sought liberty to enter final judgment for the sum earlier mentioned. That application was grounded which upon the affidavit of Mr. Conal Regan sworn on the 18th May 2015.
In his affidavit, Mr. Regan set out the background to the sum claimed. He referred to the fact that by letter of loan sanction dated the 6th July 2010 the bank offered to make available to Carrignagour Limited (‘the company’) a loan facility of €3,920,000 subject to the conditions therein contained. According to Mr. Regan, the purpose of the loan was to continue and extend the company's then existing banking facilities. The terms of the facility provided that security for the loan was to be provided by guarantees executed by Mr. & Mrs. Stack.
Unfortunately, the company ran into financial difficulties and was placed in liquidation on the 30th November 2012 with the result that it was not in a position to meet its liability to the bank following demand made of the liquidator by letter dated the 11th December 2012.
By reason of the failure of the company to discharge the sums allegedly due on foot of the facility provided further to the letter of loan offer of the 6th July 2010, by letter of demand dated the 3rd February 2015, Mr. & Mrs. Stack were called upon, pursuant to the aforementioned guarantees, to make good the sum of €3,016,995.
In his affidavit Mr. Regan exhibited the letter of loan offer of the 6th July 2010 (‘CR1’) and the separate guarantees allegedly signed by Mr. & Mrs. Stack which are both dated the 13th July 2010 (‘CR2’ and ‘CR3’). He also exhibited the letter of demand sent to the company's liquidator, Mr. Myles Kirby, (‘CR4’) and the letter of demand of the 3rd February 2015 sent to Mr. & Mrs. Stack (‘CR5’ and ‘CR6’).
Mr. Stack swore an affidavit on the 17th June 2015 wherein he relied upon the following matters by way of proposed defence to the claim for summary judgment:-
(i) there was no proof that the company had accepted the terms set out in the letter of loan sanction;
(ii) the loan was not conditional on guarantees being provided by himself or his wife;
(iii) all monies had been drawn down by the company prior to the letter of loan sanction;
(iv) any loans made available to the company pre-dated the facility letter and the guarantees;
(v) their signatures, although bearing the same date, had been witnessed by different witnesses;
(vi) his wife had no involvement in the day to day running of the company and had never received any independent legal advice;
(vii) he had never received any legal advice. Further, he had signed the guarantee when there was no obligation on him to do so as the monies had already been drawn down;
(viii) there was no consideration for the guarantee.
Mrs. Stack swore an affidavit on the 17th June 2015. By way of proposed defence she asserted:
(i) the signature on the guarantee containing her name was a forgery. She did not recall signing such a document or having been requested to sign one;
(ii) she had received no legal advice concerning the signing of such a document;
(iii) she was never involved in the day to day running of the company.
In a supplemental affidavit sworn on behalf of the bank, Ms. Lynne Allan stated that, as a result of an error, an incomplete copy of the facility letter of the 6th July 2010 had been exhibited in Mr. Regan's grounding affidavit. She exhibited, what she described as, a complete copy of the letter of loan sanction of the 6th July 2010 and also a copy of the resolution signed by the company accepting the bank's offer of facilities amounting to €3,920,000. This resolution, dated the 9th July 2010, was signed by Mr. & Mrs. Stack as chairman and secretary respectively.
In her affidavit Ms. Allan refers to the third page of the letter of loan sanction of the 6th July 2010. Paragraph 2 of the said letter provides the company's obligations are supported by personal guarantees, to be furnished by Mr. & Mrs. Stack in the sum of €3.92m. She also refers to the bank's letter of the 7th July 2010 sent under separate cover to Mr. & Mrs. Stack enclosing copies of the proposed guarantees and advising them that they had been nominated by the company to provide such guarantees.
At paragraphs 11 to 14 of her affidavit, Ms. Allan refers to the underlying purpose of the loan facility of the 6th July 2010 whereby the bank sanctioned an additional €307,000 to fund the company's completion of certain works at a housing development at Loch Gowna, County Cavan. She explained that not all of the €307,000 was drawn down in full, but confirmed that €64,000 had been drawn down by the company on the 20th July 2010 and a further sum of €8,500 on the 11th August 2010. She detailed the earlier loan facility of €3,375,000 which had been made available to the company in 2009 and which had been secured by personal guarantees furnished by Mr. & Mrs. Stack.
Of some importance in the context of Ms. Allan's affidavit is her statement at paragraph 5 where she notes that Mr. Stack, in his replying affidavit, had not asserted that the company had not accepted the terms of the loan facility contained in the letter of the 6th July 2010 and that she presumed that this was because the company had by resolution passed on the 9th July 2010 resolved to accept the banks offer of facilities amounting to €3,920,000.
A further matter of note is the opening sentence of paragraph 6 of Ms. Allan's affidavit in which she states as follows:-
‘In any event, I say that, in the circumstances, the Bank is prepared to limit its claim in these proceedings to a monies had and owing basis.’
She goes on to state that following the removal of interest and making allowance for all due credits the bank was content to seek to recover the lesser sum of €2,253,590.84 on foot of the guarantees. Finally, Ms Allan denied the assertions made by both Mr. & Mrs. Stack to the effect that Mrs. Stack's signature on the guarantee bearing her name was a forgery.
In a supplemental affidavit sworn on the 5th November 2016 Mr. Stack did not contest many of the assertions made by Ms. Allan in her affidavit such as her statement that significant sums had been drawn down by the company on the 20th July 2010 and 11th August 2011. He did however state that he was putting the bank of proof of the validity of the guarantees. He also asserted that the bank's concession made at paragraph 6 of Ms. Allan's affidavit amounted to an admission that it was unable to prove that the terms of the loan offer of the 6th July 2010 had been accepted by the...
To continue reading
Request your trial
-
Allied Irish Banks Plc v Gormley
...35 The law in relation to applications for summary judgment was helpfully recently reviewed by the Court of Appeal in AIB v. Stack [2018] IECA 128. The defendants were husband and wife who were sued on foot of guarantees allegedly signed by them for the indebtedness of a company. The wife ......
-
Onyenmezu v Firstcare Ireland Ltd
...seems to me to well surmount the test for a bona fide defence based on credible evidence as set out in the caselaw e.g. AIB Plc v. Stack [2018] IECA 128 (Unreported, Court of Appeal, 10th May, 7 Pilkington J. gave liberty for short service of the present motion by order of 9th August, 2019......
-
Danske Bank v Shortt
...of establishing an arguable defence (they rely on the cases of Promontoria v. Mallon [2018] IEHC 145, Allied Irish Banks p.l.c. v. Stack [2018] IECA 128 and IBRC v. McCaughey [2014] 1 IR 749 in that regard). The respondent further submits that the defence raised by the appellants was based ......
-
Allied Irish Banks Plc v Sloan
...that the signature on the loan agreement was not hers was an entirely bare assertion of the kind that was found in AIB v Stack [2018] IECA 128 not to give rise to an arguable defence. Noonan J noted that counsel for the defendant was unable to point to any authority which supported the prop......