Cabot Asset Purchases Ireland (Ltd) v Boyle
| Jurisdiction | Ireland |
| Judge | Mr. Justice MacGrath |
| Judgment Date | 31 May 2019 |
| Neutral Citation | [2019] IEHC 401 |
| Court | High Court |
| Docket Number | [2016 No. 1332 S] |
| Date | 31 May 2019 |
[2019] IEHC 401
THE HIGH COURT
MacGrath J.
[2016 No. 1332 S]
Banking and Finance – Summary Judgment – Guarantor – Plaintiff seeking summary judgment in respect of sums allegedly due on foot of guarantee executed by defendant – Should make an order of summary judgment or should defendant be given leave to defend the proceedings
Facts: The plaintiff made an application for summary judgment in respect of debts over which the defendant was guarantor. The defendant argued that he should be given the opportunity to present oral evidence as the history of the borrowing relationship, in particular as to conversations he had with Mr Cotter of Ulster Bank Ltd which he alleged discharged him of his liability. The defendant also argued that a demand was made on the debt by Mr Cotter in 2008 or 2009, and as such, the claim by the plaintiff is now statute barred.
Held by MacGrath J that the power to grant summary judgment should be exercised with caution, bearing in mind the right of access to justice and the right to respond to litigation. The overriding determinative factor is the achievement of a just result, whether that be by granting liberty to enter judgment or liberty to defend. It is not up to the defendant to prove he is likely to succeed, but rather that he has an arguable defence.
As there was no documentary evidence to support the claim that a previous demand had been made by Mr Cotter, MacGrath J held that the statute of limitations defence was unarguable. However, the defendant did have an arguable defence in relation to promissory estoppel and as to the extent and amount of the liability. As such, the defendant was granted leave to defend the proceedings.
Relief denied.
This is an application for summary judgment in respect of sums allegedly due on foot of a guarantee executed by the defendant, in respect of the debts of CIM Trawlers Limited (‘ the Company’), which has since been dissolved. The Company was indebted to Ulster Bank Ireland Limited and through a series of transactions its debt is alleged to have been transferred to Cabot Asset Purchases Ireland Ltd., the plaintiff in these proceedings.
The application comes before the court by way of notice of motion dated 21st November, 2016. It is grounded on the affidavit of Ms. Orla Hughes, a director of the plaintiff. The plaintiff is a limited liability company registered in the State. It is alleged that it acquired the legal and beneficial ownership of certain debts and related rights pursuant to the terms of a portfolio acquisition deed made between the plaintiff and Ulster Bank Ireland Limited., Ulster Bank Limited, UBSIG (NI) Limited and UBSIG (ROI) Limited. The deed became effective on the 22nd January, 2016. While a copy of the deed exhibited to her first affidavit is undated, in a supplemental affidavit sworn by Ms. Hughes on the 6th February, 2017, a signed copy of the deed is exhibited. She was a signatory to the deed.
Ms. Hughes avers that the defendant guaranteed the performance of the Company liabilities to Ulster Bank Ltd by way of letter dated 6th July, 2006. The limit of the guarantee is €750,000 together with interest from the date of demand.
By letter dated 9th June, 2016, the plaintiff demanded payment of the outstanding debt under the guarantee.
In a replying affidavit sworn on the 15th March, 2017, Mr. Boyle claims that he has a full defence to the proceedings and avers, inter alia, as follows:-
‘I say that at Ulster Bank Ireland Ltd. I met with Mr. Sean Cotter of Ulster Banks Specialised Lending Services, Ulster Bank Group Centre, Georges Quay, Dublin 2, issued a demand under the contract of guarantee to me verbally in clear and unambiguous terms and on more than one occasion after the sale of the merchant fishing vessel ‘India Rose’ was sold by CIM Trawlers Limited. I say and believe that my account is supported by the fact that CIM Trawlers Limited's only asset was the merchant fishing vessel ‘India Rose’ and the company ceased trading after the vessel was sold on 23rd November, 2008 and all other contact with the plaintiff and in particular Mr. Sean Cotter related to the personal guarantee.’
Mr. Boyle is a 50% shareholder and managing director of the company. He was also an employee and when the trawler was sold he suffered personal detriment and was no longer deriving income which had been generated by the trawler. The company's sole asset was the trawler and once the trawler was sold, there was no further means by which the company could generate income.
Mr. Boyle observes that the plaintiff had not addressed the history of the borrowing or the relationship between Ulster Bank Ireland Limited and the Company between the date of the guarantee and dissolution of the company on the 20th January, 2012.
Although the circumstances surrounding the dissolution of the company have not been averred to on affidavit, it was explained by counsel that the Company was dissolved because it had not filed the required statutory returns.
Ms. Hughes, in an affidavit sworn on 24th May, 2017 avers that the history of the borrowing relationship between Ulster Bank Ireland Limited and the Company is not a matter for the proceedings save insofar as she believes that as of the date of its dissolution on 20th January, 2012, the company remained indebted to the plaintiff's predecessor in title, for a sum in excess of €750,000. She avers that the plaintiff is a stranger to the alleged agreement between the defendant and Ulster Bank which purports to discharge him from his liability in respect of the guarantee. She contends that the defendant has failed to provide evidence of the agreement and Mr. Boyle's bald allegations cannot amount to a defence.
Mr. Boyle in a further affidavit of 28th June, 2017, maintains that it is important that he is provided with the opportunity to give oral evidence of his conversations with Mr. Cotter. He contends that discovery will be required and it will also be necessary to serve a subpoena on Mr. Cotter if he fails to present as a witness.
Mr. Boyle also maintains that a demand had been made by Mr. Cotter for payment on foot of the guarantee in 2008 or 2009 and that therefore the claim is statute barred. The plaintiff maintains however, that such an allegation is inconsistent with the alleged representation made by Mr. Cotter. As no evidence of such demand has been exhibited, the only evidence of demand is the letter of 9th June, 2016. Therefore, it is contended that the case is not statute barred.
By virtue of clause 2.1.2 of the guarantee, a primary obligation to indemnify the bank is placed upon the guarantor. Further, all sums payable under the guarantee become due on demand. The guarantee is a continuing security for the liabilities of the company.
Clause 4.2 provides:-
‘the liability of the Guarantor under this Guarantee will be as the sole or primary obligor and not merely as the surety and will be not impaired or discharged by reason of any of the matters referred to in Clause 4.1 above nor by any other act or omission whereby the liability of the Guarantor would not have been discharged if it had been the principal debtor and the Guarantor hereby waives all or any of his rights as surety which may at any time be inconsistent with any of the provisions of this Guarantee. The obligations of the Guarantor should be enforceable regardless of the validity, legality, effectiveness or enforceability of the obligations of the Company under the Finance Documents.’
Clause 4.5.3 provides that before acting ‘ under the guarantee, the bank is not obliged to take any action, obtain judgment or make any file or claim or proof in the bankruptcy, examination, dissolution or winding up of the company.’ The clause further provides that the bank need not advise the guarantor of their dealings with the company or of any default by the company of which the bank may have knowledge.
Clause 8, entitled ‘ Waiver of Defences’, states:-
‘In any litigation relating to this Guarantee or any security given by the Guarantor, the Guarantor irrevocably waives the right to interpose any defence based upon any Statute of Limitations or any claim of laches or set off or counter-claim of any nature or description’.
Clause 11 under the heading ‘ Waiver and forbearance’, provides that:-
‘No failure or delay by the bank in exercising any right or remedy will operate as a waiver of such right or remedy, nor will any singular or partial exercise a waiver of any right or remedy prevent their further exercise or the exercise by the bank of any other right or remedy’.
By virtue of clause 16, the bank is entitled to assign the benefit of the guarantee to any person and the guarantor is taken to have consented to such assignment.
Clause 17.1 under the heading, ‘ Variation’, provides:-
‘This Guarantee may not be released, discharged, supplemented, amended, varied or modified in any manner except by an instrument in writing signed by a duly authorised officer or representative of each of the parties to this Guarantee.’
Clause 17.2 provides that there are no oral understandings between the bank and the guarantor in any way varying, contradicting or amplifying the terms of the guarantee. By virtue of clause 17.3 the guarantee supersedes all prior representations, arrangements, understandings and agreements.
Clause 19 provides that any notice or demand for payment to be given or served under the guarantee must be in writing and:-
‘shall be duly expressed to be a notice or demand under this Guarantee and will be deemed duly given or served if sent by facsimile at the time of transmission (subject to the...
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Cabot Financial (Ireland) Ltd v Andrew Wilson
...court to adjourn the case to plenary hearing on specific or limited grounds, reliance being placed on Cabot Asset Purchases v. Boyle [2019] IEHC 401. Mr Newman encouraged this court to take a similar approach to that taken by Mr Justice McGrath, in the event that the court considered that a......