Danske Bank a/s t/a Danske Bank v Daniels
| Jurisdiction | Ireland |
| Judge | Mr. Justice Hunt |
| Judgment Date | 23 March 2018 |
| Neutral Citation | [2018] IEHC 825 |
| Docket Number | Record No. 2016/838S |
| Court | High Court |
| Date | 23 March 2018 |
[2018] IEHC 825
THE HIGH COURT
Hunt J.
Record No. 2016/838S
AND
Summary judgment – Misrepresentation – Guarantee – Plaintiff seeking summary judgment – Whether untrue representations were made to the defendant as to the effect of the guarantee
Facts: The plaintiff, Danske Bank, applied to the High Court seeking summary judgment against the fourth defendant, Mr Cantwell. The claim was on foot of a guarantee executed by him in favour of the plaintiff on 1st August, 2006, which was limited to the sum of €700,000, and given in respect of banking facilities and advances in favour of Adelphi Distributors Ltd. Mr Cantwell put forward the following defences: (i) he received no benefit from the loan facilities, and any guarantee was not supported by any true consideration; (ii) any consideration was past consideration; (iii) he did not receive any independent legal advice; (iv) he was not allowed an opportunity to obtain independent legal advice; (v) untrue representations were made to him as to the effect of the guarantee; (vi) pressure was put upon him to sign the guarantee, amounting to duress, whether economic or otherwise; (vii) in all the circumstances, the guarantee represented an unconscionable bargain which is unenforceable in equity; (viii) the provisions of the Statute of Limitations applied so as to bar the claim.
Held by Hunt J that there was sufficient evidence to support a fair and reasonable probability that Mr Cantwell had a defence based on the assertion that the guarantee was procured by misrepresentation. Hunt J was satisfied that the evidence of an absence of express reliance upon his guarantee in connection with subsequent advances was capable of supporting his assertions in this respect.
Hunt J held that he would refuse the application for summary judgment and direct that the matter be remitted to plenary hearing.
Application refused.
This is a summary judgment application by the plaintiff against the fourth- named defendant, Tony Cantwell. The claim is on foot of a guarantee executed by him in favour of the plaintiff on 1st August, 2006, which was limited to the sum of €700,000, and given in respect of banking facilities and advances in favour of Adelphi Distributors Limited (‘ the company’). Mr. Gerry McGovern provided the grounding affidavit and a replying affidavit on behalf of the plaintiff. Mr. Michael Crowley also provided a replying affidavit. Mr. Cantwell provided two replying affidavits.
The essential facts of the matter are not in issue. Mr. Cantwell does not deny that the company entered into the four facilities set out in the summary summons, or that the company drew down the various amounts set out in respect of these facilities, or that it subsequently failed to repay the loan monies in question. Therefore, there is no dispute about the company's debt which is the sum now claimed by the plaintiff from Mr. Cantwell on foot of his guarantee, which he does not dispute signing in favour of the bank on 1st August, 2006, as security for the debts of the company. In this regard, he also concedes that he separately initialled the monetary amount of the guarantee on the second page thereof.
In summary, Mr. Cantwell puts forward the following defences:-
(i) He received no benefit from the loan facilities, and any guarantee was not supported by any true consideration.
(ii) Any consideration was past consideration.
(iii) He did not receive any independent legal advice.
(iv) He was not allowed an opportunity to obtain independent legal advice.
(v) Untrue representations were made to him as to the effect of the guarantee.
(vi) Pressure was put upon him to sign the guarantee, amounting to duress, whether economic or otherwise.
(vii) In all the circumstances, the guarantee represented an unconscionable bargain which is unenforceable in equity.
(viii) The provisions of the Statute of Limitations applied so as to bar the claim. (This was asserted in argument, but not in the written submissions).
The principles applicable to an application of this type have been set out many times and I do not propose to repeat them in detail in this case. It is sufficient to refer to the formulation adopted by the late Hardiman J. in Aer Rianta CPT v. Ryanair Limited (No. 1) [2001] 4 I.R. 607 where he held, at page 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:
‘Is it 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?’
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 intended defence does not of itself constitute a ground for granting leave to defend. Whether or not there is a fair and reasonable probability of the defendant having a real or bona fide defence has to be ascertained by looking at the situation as a whole, and assertions must be supported by some meaningful evidence such that a court could conclude that there is a fair or reasonable probability that the defendant has a bona fide defence based upon such assertions.
The defence posited on the basis of the absence or insufficiency of consideration for the guarantee is not made out. The position is that the first monetary facility was in place and drawn down before the execution of the guarantee. Further facilities were accepted and drawn down...
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