Allied Irish Banks Plc v Sloan

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 12 March 2019
• Neutral Citation: [2019] IEHC 270
• Court: High Court
• Docket Number: [2017 No. 861 S.]
• Date: 12 March 2019

[2019] IEHC 270

THE HIGH COURT

Noonan J.

[2017 No. 861 S.]

BETWEEN

ALLIED IRISH BANKS PLC

PLAINTIFF

AND

JOANNA SLOAN

DEFENDANT

Summary judgment – Loan agreement – Bona fide defence – Plaintiff seeking summary judgment on foot of a loan agreement – Whether the defendant had demonstrated that she had a fair or reasonable probability of having a bona fide defence

Facts: A motion for summary judgment was brought by the plaintiff, Allied Irish Banks plc, on foot of a loan agreement in writing dated the 28th June, 2007. The loan agreement related to two facilities for three different amounts. The first facility was for €2.617 million. This was made up of €1.863 million for the purchase of two units at the Apex Centre in Sandyford, County Dublin, together with €0.754 million described as an equity release to be used for personal investment into other businesses. The second facility was in the sum of €805,000 and was described as being for the purpose of an equity release from the two office units. The security provisions of the loan agreement were threefold. The first and second required the provision of a legal charge by the defendant, Ms Sloan, over the two units. The third was a letter of guarantee in the amount of €3.422 million by Mr Kelly for the obligations of Ms Sloan. The total amount of the loans sanctioned by the facility letter was €3.422 million, which equated to the amount of the guarantee. There was no dispute but that the monies were drawn down by Ms Sloan as provided in the loan agreement. Legal mortgages were executed by Ms Sloan over both of the units as provided by the security provisions in the letter of sanction. It was also not in dispute that there was default in the repayment of the loans, demands for such repayment were made and not met. A number of putative defences had been raised by Ms Sloan in response to the Bank’s application. She asserted that she knew nothing about the loan, that the loan agreement was not signed by her, that she received no legal advice before entering into the agreement, that as the proceedings commenced more than six years after the cause of action accrued the claim was statute barred and that because some compromise of the loan agreement relating to the €8 million advanced to other parties for the acquisition of the Apex Centre was compromised she was entitled pursuant to s. 35(1)(h) of the Civil Liability Act 1961 to the benefit of that settlement in that the Bank was for the purposes of the Act identified with the settling debtors.

Held by the High Court (Noonan J) that the assertion that Ms Sloan knew nothing about the loan in question was simply not credible in the light of the documentary evidence. Noonan J held that the allegation 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 proposition that Ms Sloan received no legal advice before entering into the agreement. Noonan J was satisfied that in this case the twelve year limitation period applied and the claim was not statute barred. Noonan J held that the Civil Liability Act argument was entirely misconceived and was not merely a bare assertion but one that was contradicted by all of the documentary evidence that was available. Noonan J held that the defendant had not demonstrated that she had a fair or reasonable probability of having a bona fide defence.

Noonan J held that he would give judgment for the amount claimed.

Judgment granted.

JUDGMENT of Mr. Justice Noonan delivered on the 12th day of March, 2019

1 The within motion for summary judgment is brought by the plaintiff (‘the Bank’) on foot of a loan agreement in writing dated the 28th June, 2007.

2 Some relevant background facts include that the defendant Ms. Sloan, is married to Simon Kelly, a son of Paddy Kelly who is described as a well known developer. It would appear that in 2006, the Bank advanced some €8 million to Paddy Kelly and others for the purchase of ten commercial units at the Apex Centre in Sandyford, County Dublin. Messrs. Kelly together with other parties were shareholders in a company called Daleridge Ltd which owned the Apex Centre.

3 That company was liquidated and it seems that the shareholders acquired some of the individual units in the Apex Centre subsequently. The personal purchasers of those units were financed by the Bank and Ms. Sloan suggests that these loans were ultimately transferred to NAMA and a compromise of the relevant parties” indebtedness occurred thereafter. Ms. Sloan is unaware of the terms of this compromise.

4 Subsequent to the liquidation of Daleridge Ltd, the Bank's deponent, Madeline Murray, avers that Ms. Sloan purchased two of the units from Paddy Kelly. Ms. Sloan herself avers that she purchased the units from her husband, Simon Kelly. Nothing turns on this difference.

5 The Bank originally sanctioned a loan in favour of Ms. Sloan in July 2006 in the sum of €1.863 million for the purchase of the two units in the Apex Centre, Unit A, Floor 3 and Unit C, Floor 2. That transaction did not proceed and about a year later, the transaction the subject matter of these proceedings was entered into. The loan agreement relates to two facilities for three different amounts. The first facility is for €2.617 million. This is made up of the original €1.863 million for the purchase of the two units together with €0.754 million described as an equity release to be used for personal investment into other businesses.

6 The second facility was in the sum of €805,000 and is described as being for the purpose of an equity release from the two office units. The security provisions of the loan agreement are threefold. The first and second require the provision of a legal charge by Ms. Sloan over the two units. The third is a letter of guarantee in the amount of €3.422 million by Simon Kelly for the obligations of Ms. Sloan. The total amount of the loans sanctioned by the facility letter is €3.422 million, which equates to the amount of the guarantee.

7 There is no dispute but that the monies were drawn down by Ms. Sloan as provided in the loan agreement. Legal mortgages were executed by Ms. Sloan over both of the units as provided by the security provisions in the letter of sanction. It is also not in dispute that there was default in the repayment of the loans, demands for such repayment were made and not met.

8 A number of putative defences have been raised by Ms. Sloan in response to the Bank's application herein both on affidavit and by way of submission. The first is that the loan agreement exhibited in the Bank's first grounding affidavit is...