Irish Bank Resolution Corporation Ltd v Quinn

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 16 December 2011
• Neutral Citation: [2011] IEHC 470
• Court: High Court
• Date: 16 December 2011

Irish Bank Resolution Corporation Ltd v Quinn

COMMERCIAL

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED

PLAINTIFF

AND

SEÁN QUINN AND PATRICIA QUINN

DEFENDANTS

[2011] IEHC 470

[No. 4513 S./2011]

THE HIGH COURT

PRACTICE & PROCEDURE

Summary judgment

Credit agreement - Personal loan facility - Threshold of proof - Arguable defence - Non est factum - Undue influence - Failure of consideration - Credibility - Whether arguable defence - Whether fundamental difference between what was signed and what defendant thought she was signing - Whether lack of negligence - Whether presumption of undue influence - ACC Bank v Kelly [2011] IEHC 7, (Unrep, Clarke J, 10/1/2011) followed; Aer Rianta v Ryanair [2001] 4 IR 607; Danske Bank v Durkan New Homes [2010] IESC 22, (Unrep, SC, 22/4/2010); Saunders v Anglia Building Society [1971] AC 1004; Tedcastle McCormick and Company Ltd v McCrystal (Unrep, Morris J, 1999); Allied Irish Banks Plc v Higgins [2010] IEHC 219, (Unrep, Kelly J, 3/6/2010) and In re Hunting Lodges Ltd [1985] ILRM 75 considered - European Communities (Cancellation of Contracts negotiated away from Business Premises) Regulations 1989 (SI 224/1989) - Judgment granted (2011/4513S - Kelly J - 16/12/2011) [2011] IEHC 470

Irish Bank Resolution Corporation Ltd v Quinn

Facts: An application for summary judgement was made against the second defendant for a sum in excess of Eur 3 million. The claim was made on foot of a facility letter and credit agreement. Under the terms, headed Borrowers Acceptance, the second defendant had appended her signature five times. The borrowing was a joint borrowing by the defendants, who were husband and wife. Three forms of defence were mounted by her- non est factum, in so far as she had no recollection of ever signing the document; secondly, that she was been unduly influenced by her husband in signing the agreement and thirdly, that there was a total failure of consideration and the monies in question did not benefit her.

Held by Kelly J. that the second defendant had failed to demonstrate any arguable defence under the three headings and the plaintiff was entitled to summary judgment against her for the amount outstanding.

Reporter: E.F.

AER RIANTA CPT v RYANAIR LTD 2001 4 IR 607 2002 1 ILRM 381 2001/1/68

DANSKE BANK A/S (T/A NATIONAL IRISH BANK) v DURKAN NEW HOMES & ORS UNREP SUPREME 22.4.2010 2010/10/2392 2010 IESC 22

SAUNDERS v ANGLIA BUILDING SOCIETY 1971 AC 1004 1970 3 WLR 1078 1970 3 AER 961

TED CASTLE MCCORMACK & CO LTD v MCCRYSTAL UNREP MORRIS 15.3.1999 1999/24/7774

ALLIED IRISH BANK PLC v HIGGINS & ORS UNREP KELLY 3.6.2010 2010/2/422 2010 IEHC 219

ACC BANK PLC v KELLY UNREP CLARKE 10.1.2011 2011 IEHC 7

HALSBURYS LAWS OF ENGLAND 4ED VOL 18 PARA 40

GRIGBY v COX 27 ER 1178 1750 1 VES SEN 517

HUNTING LODGES (IN LIQUIDATION), IN RE 1985 ILRM 75 1984/7/2295

EUROPEAN COMMUNITIES (CANCELLATION OF CONTRACTS NEGOTIATED AWAY FROM BUSINESS PREMISES) REGS 1989 SI 224/1989

Introduction

1 1. This is an application for summary judgment against the second defendant (Mrs. Quinn) for a sum in excess of €3m. The claim is made on foot of a facility letter of 17 ^th November, 2006, a credit agreement of the same date and the then prevailing general conditions for personal loans of the plaintiff (the bank).

2 2. The amount of the facility was €3m and the purpose was identified as being to provide the borrowers with a personal loan facility. The defendants were the borrowers and judgment has already been recovered against the first defendant, Seán Quinn. The facility was repayable on demand and no issue has been raised in these proceedings concerning the demand which was made.

Terms

3 3. Under the heading " Borrowers Acceptance" on the letter of facility, Mrs. Quinn appended her signature no fewer than five times. The first and second time related to consent being given to written and telephonic communications being had between the borrowers and the bank.

4 4. The third signature was appended under the legend " contracts negotiated away from the business premises of the bank". I am satisfied that a signature was not in fact required at that point, but I will return to this later.

5 5. The fourth signature was an acknowledgement that Mrs. Quinn was waiving a right to a ten day period to reconsider her commitment to the agreement.

6 6. The final signature was an acknowledgement that she had read the conditions set out in the letter of facility and the general conditions of the credit agreement which formed part of the overall agreement and that she agreed to be bound by the provisions of the agreement.

7 7. Mrs. Quinn acknowledged that she was:-

"fully aware of, and understood the nature of the agreement and had been advised to take and had been given the opportunity to take separate independent legal advice on the effect of the agreement".

She did not, however, indicate whether she had taken or waived that opportunity.

8 8. The credit agreement of the same date indicated to her that she might withdraw from the agreement at any time within ten days of receiving it and advised her to take legal advice before it was signed.

9 9. A number of the general conditions of the bank are of relevance having regard to the lines of defence which have been outlined.

10 10. This borrowing was a joint borrowing by the defendants, who are husband and wife. Under clause 16 of the general conditions dealing with personal loans, it is expressly provided that:-

"Where there are two or more parties to the agreement as borrowers, their liabilities hereunder shall be joint and several and references to the borrower shall be deemed to be references to any one or more of such persons".

11 11. General condition 1(4) provided that the borrower instructed the bank that:-

"In connection with the operation of any account in the name of the borrower, the bank is authorised to act on instructions given by the borrower by telephone, telex, facsimile or email or by electronic, microwave, magnetic or digital means".

12 12. The following clause provided that in consideration of the bank agreeing, at the request of the borrower, to act on instructions received by those methods, the borrower agreed and covenanted with the bank that the bank might act on such instruction. Such instructions could include instructions to pay money or otherwise to debit or credit any account of the borrower with any amount or relate to the disposition of any money or purport to bind the borrower to any agreement with the bank or with any other person. Furthermore, the borrowers accepted that they should at all times accept the debit or the credit by the bank of any of the borrowers' accounts in respect of any such transaction as conclusive evidence of any such instruction sent by telephone or any of the other methods described.

13 13. Under clause 9, bearing the heading " Representations and Warranties", the borrower represented that he or she had made full disclosure of all facts in relation to the financial affairs of the borrower which would have a material effect on the ability of the borrower to meet the obligations undertaken.

14 14. Under clause 14, the borrower indemnified and agreed to keep indemnified the bank against all claims, demands, liabilities, losses etc. as provided for in that clause.

15 15. Finally, the general conditions provided that a certificate by any director of the bank as to the amount due from the borrower was to be conclusive evidence of what was stated save for any manifest error.

The Test

16 16. Three lines of defence are advanced by Mrs. Quinn which I will consider in turn. Before doing so, I ought to identify the test which I have to apply on this application.

17 17. There is now a wealth of jurisprudence, both in this Court and in the Supreme Court as to the approach to be taken on an application for summary judgment.

18 18. The threshold of proof which has to be achieved by a defendant is low. The test as identified by Hardiman J. in Aer Rianta v. Ryanair [2001] 4 I.R. 607, is this:-

"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?"

19 19. The most recent statement of the law from the Supreme Court is contained in Danske Bank v. Durkan New Homes [2010] IESC 22. There Denham J. (as she then was) cited with approval the views of Ackner L.J. where he said:-

"It is of course trite law that 0.14 proceedings are not decided by weighing the two affidavits. It is also trite that the mere assertion in an affidavit of a given situation which is to be the basis of a defence does not, ipso facto, provide leave to defend; the Court must look at the whole situation and ask itself whether the defendant has satisfied the Court that there is a fair or reasonable probability of the defendants having a real or bona fide defence."

My Approach

20 20. For the purpose of this exercise, I propose to take the affidavit evidence sworn by Mrs. Quinn entirely at face value. Both in replying affidavits and in submissions, substantial criticism was made as to the credibility of a number of sworn statements made by Mrs. Quinn. For example, she took issue at being described as a "business lady". She said that she is, in fact, a homemaker and has been such for the past 36 years or more. She says that her only role since the time of her marriage at 21 years of age was as a wife and mother, rearing her family and taking care of her husband and children. She said that she was never involved in any business or financial dealings beyond deciding upon the weekly groceries and providing for household expenses. She said that the...