OCM Emru Debtco DAC v Georgina Appelbe
| Jurisdiction | Ireland |
| Judge | Mr. Justice Noonan |
| Judgment Date | 26 July 2021 |
| Neutral Citation | [2021] IECA 213 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record Number: 2018/187 |
[2021] IECA 213
Noonan J.
Haughton J.
Pilkington J.
Record Number: 2018/187
High Court Record Number: 2015/1757S
THE COURT OF APPEAL
Summary judgment – Guarantee – Execution – Appellant appealing from summary judgment – Whether the trial judge failed to have proper regard to the circumstances of execution of the guarantee
Facts: The defendant/appellant, M Appelbe, appealed to the Court of Appeal from the judgment and order of the High Court of the 23rd April, 2018 in summary summons proceedings whereby the High Court granted judgment to the plaintiff/respondent, Ocm Emru Debtco DAC, in the sum of €3,488,127 together with its costs. The plaintiff was the successor in title to the original lender, Allied Irish Banks (AIB). The claim was brought against the defendant, first, as a personal borrower on foot of an overdraft and a loan account, and secondly as a joint guarantor with her husband, Mr Appelbe, of the liability of a company called Algadorn Ltd, of which the defendant and her husband were directors and shareholders. In her notice of appeal, the defendant raised discrepancies in the figures to which she said the trial judge failed to have proper regard. Similarly it was said that the trial judge failed to have proper regard to the circumstances of execution of the guarantee and that the judge erroneously applied the test for summary judgment.
Held by Noonan J that the guarantee was executed by the defendant on the 29th March, 2007. It was suggested by the plaintiff that the consideration for this guarantee was the subsequent facility granted to the company on the 25th July, 2007 for various sums approaching €5m. Whilst it was true to say that the correspondence from AIB sanctioning the company’s facility expressly contemplated the guarantee as security, Noonan J held that the plaintiff had adduced no clear evidence to demonstrate that the guarantee was executed in consideration of a facility which did not come into being until some four months later. Noonan J held that had there been a contemporaneous execution of the guarantee and facility letter, an inference might thus arise that one was in consideration of the other, but it seemed to him that the delay of four months in this case, at a minimum, called for explanation by the plaintiff and so far, there was none. Citing the dicta of Hardiman J in Aer Rianta v Ryanair [2001] 4 IR 607, Noonan J held that it must appear to the court that it is clear that the defendant has no defence. In this case, Noonan J was unable to reach that conclusion and therefore considered that the defendant had, on this single discrete issue, reached the threshold of arguability that entitled her to have the issue canvassed at a plenary hearing.
Noonan J proposed the following order in substitution for the order of the High Court. The plaintiff was to have judgment for the sum of €97,920 being the amounts due on foot of Facilities 1 and 2 of the plaintiff’s personal borrowings. With regard to the balance of €3,390,207 this would be remitted for plenary hearing before the High Court, such hearing to be confined to the single issue identified, whether the guarantee executed by the defendant dated the 29th March, 2007 is supported by valuable consideration. As this issue was very net, there was no necessity in Noonan J’s view for the delivery of a statement of claim and the defendant should deliver her defence within a period of three weeks with the plaintiff’s reply, if necessary, a further three weeks thereafter. In the circumstances, the justice of the case would in Noonan J’s provisional view be met by an order directing that the costs of the appeal should be costs in the cause before the High Court.
Appeal allowed in part.
JUDGMENT of Mr. Justice Noonan delivered on the 26th day of July, 2021
. This appeal is brought by the defendant from the judgment and order of the High Court of the 23 rd April, 2018 in these summary summons proceedings whereby the High Court granted judgment to the plaintiff in the sum of €3,488,127 together with its costs. The plaintiff is the successor in title to the original lender, Allied Irish Banks. The claim is brought against the defendant, first, as a personal borrower on foot of an overdraft and a loan account, and secondly as a joint guarantor with her husband, Fergus Appelbe, of the liability of a company called Algadorn Limited, of which the defendant and her husband are directors and shareholders.
. The defendant's personal borrowings relate to a letter of sanction issued by AIB on the 23 rd April, 2007 by which AIB offered two facilities. The first (“Facility 1”) was an overdraft in the sum of €100,000 for the purpose of personal expenses, subject to a review one year later. The second facility (“Facility 2”) was a loan in the sum of €277,000 which related to the acquisition of business premises at Ballycurreen Industrial Estate, Cork. This loan was to be an interest only loan until the 29 th August, 2008 when it fell due for review. The amount claimed to be due on foot of these facilities was stated to be €327,877.95 in both the summary summons and the motion for summary judgment.
. The second part of the plaintiff's claim relates to a guarantee dated 29 th March, 2007 whereby the defendant and her husband guaranteed the liabilities of Algadorn Limited up to a maximum of €5,810,000. The amount claimed in both the summons and motion in respect of the guarantee is €3,885,935.84.
. The original proceedings which issued on the 11 th September, 2015 were brought by National Asset Loan Management Limited who acquired the loans and guarantee from AIB. The plaintiff herein was substituted for National Asset Loan Management Limited by order of the High Court of the 16 th January, 2017.
. The affidavit grounding the application was sworn by Gearóid Bennis, an asset recovery manager with NALM. In relation to the defendant's personal borrowings, he avers that an event of default occurred under the terms of the loan leading to a demand by NALM on the 31 st August, 2015 of the sum then due of €327,877.95.
. He then deals with the guarantee and notes that by letter of sanction of the 25 th July, 2007, AIB approved various advances to Algadorn Limited totalling €4,890,416. He notes that the facility letter was accepted by the company and the funds drawn down. Mr. Bennis says that this was a refinancing of ongoing facilities granted by AIB to the company. He avers that in consideration of the granting of ongoing facilities to the company, AIB required that the defendant and her husband enter into a joint and several guarantee. This is reflected in the terms of the facility letter which refers at item three under the heading “Security” to the guarantee of the 29 th March, 2007.
. In her first replying affidavit, the defendant raises a number of issues. First, with regard to the facility letter of the 23 rd April, 2007, she does not dispute its validity or that she signed it. In relation to the €100,000 overdraft, her complaint is that this appears to have been used to pay interest payments on other loans due by her husband which she says were not her responsibility. She avers that as of the 12 th September, 2008, the amount overdrawn was €32,293.16, which she appears not to dispute, but after that date the amount due increased very substantially in consequence of interest charges being added to it, due solely by her husband, for which she bears no liability.
. Secondly, regarding the facility of €277,000, she notes that the amount due on this facility as of the date of issue of the proceedings was €181,172.69. She also avers that a payment of €115,153 was credited to this account on the 24 th December, 2015 with the word “Coolfadda” appearing opposite the credit. She notes that receivers had been appointed over the company's assets, with whom she has had correspondence and the credit may relate to the sale of the Ballycurreen premises. She makes various complaints about the conduct of the receivership in a general sense.
. Thirdly, with regard to the guarantee, she avers that any facility offered by AIB to the company was on foot of a letter of sanction of the 1 st December, 2005, replacing an earlier letter, and that this was supported by a letter of guarantee in the amount of €5,600,000 from her husband. At para. 16, the defendant avers that she believes that no additional funds may have been advanced to the company following the guarantee that she signed, but if such funds were advanced, she was not involved. At para. 19, she refers to the fact that the facility letter in respect of the company relied upon by the plaintiff is the letter of sanction of the 25 th July, 2007 but which post-dated the relevant events.
. While this appears to raise an issue concerning consideration for the guarantee, separately she complains that she was not in fact asked to provide the guarantee and when she attended at the bank with her husband she signed two documents which she had not seen before and these documents were not explained to her, other than being described as “routine” documents. She says she was not offered an opportunity to meet in private with the bank official to discuss the matter nor did she get any cooling off period nor was she alerted to the fact that she should obtain independent advice.
. It should be noted in that regard that she does not dispute executing a letter of waiver attached to the guarantee by which she confirmed that she was invited and afforded the opportunity to obtain independent legal advice and had decided not to do so. In addition, the defendant suggests that she was not kept informed of the progress of the facility and never understood herself to be guaranteeing the amounts claimed herein....
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