Close Invoice Finance Ltd v Matthews and Another

JurisdictionIreland
CourtCourt of Appeal (Ireland)
JudgeRyan P.,Peart J.,Irvine J.
Judgment Date24 June 2015
Neutral Citation[2015] IECA 132
Docket NumberAppeal No. 2014/1280
Date24 June 2015

[2015] IECA 132

COURT OF APPEAL

Ryan P.

Peart J.

Irvine J.

Appeal No. 2014/1280

Close Invoice Finance Limited
Plaintiff/Respondent
and
Gabriel Matthews and Ronald Matthews
Defendants/Appellants

Guarantees – Estoppel – Summary judgment – Appellants seeking to appeal against the judgment of the High Court – Whether High Court erred in law and in fact

Facts: The defendants, Mr G Matthews and Mr R Matthews, had summary summons proceedings commenced against them in December, 2012. The plaintiff, Close Invoice Finance Ltd, brought the claim against the first defendant on foot of a guarantee dated 6th December, 2010, and, against the second defendant, on foot of a guarantee dated 17th April, 2008. The latter guarantee limited the liability of the second defendant to a sum of €150,000. The guarantees were given by the defendants to support facilities granted by the plaintiff to a company, Garlester Ltd, of which both defendants were directors. For the purposes of the application for summary judgment, three affidavits were sworn on behalf of the plaintiff and four on behalf of the defendants. In basic terms, the matters advanced by way of potential defence to the claims were: (a) a claim that the receiver, who had been appointed by the plaintiff as debenture holder, sold the assets of Garlester in an overly prompt asset sale promoted by the plaintiff at a gross under value, thus increasing the defendant”s liability to the plaintiff on foot of the guarantees; (b) the receiver confined the negotiations to one potential purchaser; (c) that the sums claimed on foot of the guarantees were excessive insofar as certain sums identified in the replying affidavits, which had allegedly been paid to Garlester, had not been credited to its account; (d) that the plaintiffs were estopped, by reason of representations made at a meeting on 5th December, 2012, from pursuing the defendants on foot of the personal guarantees. In May, 2014, the High Court judge granted judgment against the first defendant in the sum of €369,644.43. He adjourned the balance of the plaintiff”s claim as against the first defendant, namely the sum of €100,000, to plenary hearing. The judge also granted the plaintiff judgment against the second defendant in the sum of €150,000. He ordered that the defendants pay the costs of the proceedings and refused the defendants” application for a stay on the entry and execution of the respective judgments pending appeal. The defendants appealed to the Court of Appeal against the order of the High Court following the plaintiff”s application for summary judgment, arguing that the High Court judge erred in law and in fact in failing to find that there was a fair and reasonable probability of them having a real or bona fide defence to the claim based on the plaintiff”s interference and involvement in the alleged sale of the assets of Garlester at a gross under value.

Held by the Court that, having considered the evidence that was before the High Court and the written and oral submissions of the parties, it was not satisfied that the appellants had put forward sufficient evidence to meet the threshold that would have required the High Court judge to have referred the proceedings to plenary hearing, citing First National Commercial Bank plc v Anglin [1996] 1 IR 75. The Court saw no reason to interfere with the conclusion of the High Court that the claim canvassed by the defendants that the assets of Garlester had been sold at an undervalue was vague and lacking in specificity. As to the submission made that the High Court judge erred in law and in fact in failing to refer the entirety of the claim to plenary hearing on account of alleged discrepancies in the accounts of Garlester, the Court was satisfied that the conclusion of the High Court judge could not be faulted; he clearly considered the evidence concerning the alleged irregularities in the accounts and correctly concluded that each of the relevant amounts had in all probability been properly credited to Garlester”s account. The Court was satisfied that it would have been unjust had the High Court judge refused to grant judgment to the plaintiff on the basis that, if the claim were referred to plenary hearing and discovery obtained, some discrepancies might be identified such as would reduce the liability of the principal debtor to the plaintiff and thus the plaintiff”s claim as against the defendants. The Court could see no basis upon which the rejection by the High Court judge of a potential defence based upon the law of estoppel could be challenged, citing Greenwood v Martin”s Bank Ltd [1933] AC 51.

The Court held that it would dismiss the appeal.

Appeal dismissed.

JUDGMENT of the Court delivered on the 24th day of June 2015
1

This is the defendant's appeal against the order of the High Court (Birmingham J.) made on 20th May, 2014, following the plaintiff's application for summary judgment.

2

The High Court judge granted judgment against the first named defendant in the sum of €369,644.43. He adjourned the balance of the plaintiff's claim as against the first named defendant, namely the sum of €100,000, to plenary hearing. The High Court judge also granted the plaintiff judgment against the second named defendant in the sum of €150,000. He ordered that the defendants pay the costs of the proceedings and refused the defendants' application for a stay on the entry and execution of the respective judgments pending appeal. That refusal was appealed to the Supreme Court, which granted a stay on the execution of the judgments pending the outcome of this appeal.

Background
3

Summary summons proceedings were commenced against the defendants on 10th December, 2012. The plaintiff's claim against the first named defendant was brought on foot of a guarantee dated 6th December, 2010, and, as against the second named defendant, on foot of a guarantee dated 17th April, 2008. The latter guarantee limited the liability of the second named defendant to a sum of €150,000. Suffice to state that the guarantees were given by the defendants to support facilities granted by the plaintiff to a company by the name of Garlester Limited (‘Garlester’), of which both defendants were directors. Prior to the issue of the proceedings, letters of demand dated the 17th July, 2012, and 14th November, 2012, were sent to the defendants.

4

For the purposes of the application for summary judgment, three affidavits were sworn on behalf of the plaintiff and four on behalf of the defendants. In basic terms, the matters advanced by way of potential defence to the claims can categorised as follows:-

(a) A claim that the receiver, who had been appointed by the plaintiff as debenture holder, sold the assets of Garlester in an overly prompt asset sale promoted by the plaintiff at a gross under value, thus increasing the defendant's liability to the plaintiff on foot of the guarantees.

(b) The receiver confined the negotiations to one potential purchaser.

(c) That the sums claimed on foot of the guarantees were excessive insofar as certain sums identified in the replying affidavits, which had allegedly been paid to Garlester, had not been credited to its account.

(d) That the plaintiffs were estopped, by reason of representations made at a meeting on 5th December, 2012, from pursuing the defendants on foot of the personal guarantees.

The judgment of the High Court
5

The High Court judge in his judgment correctly set out the principles which are to be applied by the court on a consideration of an application for summary judgment, and it is not necessary to revisit the same in any detail in the course of this judgment as they are not in dispute between the parties. The High Court judge referred to the oft cited judgment of Hardiman J. in Aer Rianta cpt v. Ryanair Ltd (No.1) [2001] 4 I.R. 607 where he held, at p.623, that the test to be applied on an application for summary judgment involved the court asking itself the answer to one simple question which he framed in the following terms:-

‘It is very clear that the defendant has no case? Is there either no issue to be tried or only issues which are simple and easily determined? Do the defendant's affidavits fail to disclose even an arguable defence?’

6

The High Court judge also referred to the decision of McKechnie J. in Harrisrange v. Duncan [2003] 4 I.R. 1 at pp. 7–8 where he set out a list of matters to which the court should have regard when dealing with an application for summary judgment. He also dealt with the extent of the duty of care owed by a receiver and did so by reference to the judgment of Denning M.R. in Standard Chartered Bank Limited v. Walker [1982] 1 W.L.R. 1410. He noted that part of the judgment, pp.1416–1417, which advises that:-

‘The receiver is the agent of the company,...

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5 cases
  • Allied Irish Banks Plc v Meade
    • Ireland
    • High Court
    • 3 October 2016
    ...fail to disclose even an arguable defence?’ 3 The observations of the Court of Appeal in Close Invoice Finance Limited v. Matthews [2015] IECA 132 are also relevant. The Court of Appeal emphasised that the mere assertion in an affidavit of a given situation which is to form the basis of an ......
  • Danske Bank a/s t/a Danske Bank v Daniels
    • Ireland
    • High Court
    • 23 March 2018
    ...fail to disclose even an arguable defence?’ 5 The observations of the Court of Appeal in Close Invoice Finance Limited v. Matthews [2015] IECA 132 are also relevant. The Court of Appeal emphasised that the mere assertion in an affidavit of a given situation which is to form the basis of an......
  • Havbell DAC v Hilliard
    • Ireland
    • High Court
    • 6 December 2019
    ...plaintiff and the receiver. In this regard counsel relied on the decision in Close Invoice Finance Limited v. Gabriel Matthews & another [2015] IECA 132, where it was held that generally speaking the receiver would be deemed to be the agent of the debtor and not the agent of the debenture h......
  • DPP v Karl Donohoe
    • Ireland
    • Court of Appeal (Ireland)
    • 19 January 2015
    ...... by his brake lights that the deceased was too close. The appellant stopped about 400mtrs into Tritonville Road ......
  • Request a trial to view additional results

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