Danske Bank -v- Connotes Limited & anor, [2016] IEHC 183 (2016)

Docket Number:2014 620S
Party Name:Danske Bank, Connotes Limited & anor

THE HIGH COURT[2014 No. 620 S]




JUDGMENT of Mr. Justice McDermott delivered on the 12th day of April, 2016

  1. The plaintiff’s claim pursuant to notice of motion dated 3rd June, 2014, is for summary judgment against the second named defendant in the sum of €6,397,301.64 on foot of a guarantee.

  2. A guarantee was entered into by the second named defendant on 24th August, 1998, in respect of the liabilities of the first named defendant to the plaintiff, then known as National Irish Bank Limited. It is claimed that the second named defendant unconditionally guaranteed all monies due in respect of liabilities of the first named defendants to NIB present or future, actual or contingent together with interest and covenanted that if the first named defendant made default in payment when due, in respect of any of its liabilities to NIB, he would forthwith make payment on foot of the guarantee in respect of any amount demanded.

  3. The rights and entitlements of NIB pursuant to the said guarantee were part of those rights and entitlements transferred to the plaintiff bank pursuant to the provisions of the Central Bank Act 1971 (Approval of Scheme of National Irish Bank Limited and Danske Bank A/S) Order 2007, S.I. No. 29 of 2007 and in particular, Article 10(1) thereof.

  4. The guarantee entered into by the second named defendant states, inter alia:-

    “Whereby in consideration of the bank making or continuing advances or giving credit or affording facilities or granting time as long as and to the extent that the bank may think fit to Connotes Limited (hereinafter called ‘the Borrower’), the Guarantor hereby UNCONDITIONALLY GUARANTEES the complete and prompt payment to the bank on demand of all monies due by and liabilities to the bank of and all its obligations to the bank whether present or future, whether actual or contingent….”

  5. The guarantee is signed by Seán McElvaney.

  6. The term loan facilities operating in favour of Connotes Limited and in respect of which the bank now seeks to rely was entered into on 13th January, 2004. The purpose of the facility of €6,450,000 by way of term loan and bridging finance of €250,000 was to part fund development work undertaken at Setanta House Hotel and the hotel’s projected cash flow requirements. This development was a project undertaken by Connotes Limited. The company indicated its agreement to the terms and conditions of the loan facility through Mr. McElvaney. He acknowledged his obligation and an “All Monies Guarantee” which he completed in favour of the bank, in respect of Connotes Limited, by his signature which appears and is dated 3rd March, 2004. His authority to accept the loan facility offered is evidenced by a company resolution to that effect designating him as the person upon whose instructions the bank might act in respect of the drawing down of the monies under the facility. The authorities and resolutions are also dated 3rd March, 2004.

  7. The company defaulted on its obligations and a letter of demand seeking repayment of monies due on foot of the loan facility issued on 21st June, 2011. A further letter dated 23rd June, was issued to Mr. McElvaney asking him to discharge his liability under the guarantee. Mr. McElvaney does not dispute that he signed the guarantee in 1998 or any of the other documents exhibited and upon which his signature appears. Though, he maintained in an affidavit sworn on 14th March, 2016, that he did not believe he was represented in a proper, appropriate fashion when he signed the original affidavit filed in this case and “consent[ed] to certain points that on mature reflection was a mistake” [sic]. Mr. McElvaney, who represented himself in this hearing (accompanied by a McKenzie Friend) indicated that it was not his intention to resile from the contents of the affidavits previously filed or his acceptance that he had signed the documents exhibited by the plaintiff.

  8. Mr. McElvaney states that he set up Connotes Limited on 17th October, 1997. He purchased Setanta House Hotel in or about 1998, with finance furnished by National Irish Bank in the amount of €1.3m and Woodfield Investments in the amount of €300,000. At the time of the purchase Mr. McElvaney states that the company was represented by Beauchamp Solicitors and the bank by Whitney Moore Solicitors. He states that he did not have independent legal advice separate to that supplied to the first named defendant when entering the Guarantee.

  9. Mr. McElvaney accepts that a loan offer issued in the terms of the letter dated 13th January, 2004, which has been exhibited. He states that this letter of offer itself stipulates that it must be accepted and signed by 30th January, 2004,...

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