Stapleford Finance DAC v Tuthill
| Jurisdiction | Ireland |
| Judge | Mr. Justice MacGrath |
| Judgment Date | 23 January 2020 |
| Neutral Citation | [2020] IEHC 44 |
| Docket Number | [2017 No. 464S] |
| Court | High Court |
| Date | 23 January 2020 |
AND
[2020] IEHC 44
MacGrath J.
[2017 No. 464S]
THE HIGH COURT
Guarantee – Facility letter – Plenary hearing – Plaintiff seeking sum against the defendants – Whether any ambiguity or lack of clarity surrounding the guarantee ought to be resolved in favour of the guarantor
Facts: The plaintiff, Stapleford Finance DAC, claimed, in total, the sum of €143.364.86 against the defendants, Mses Tuthill, on foot of guarantees provided by them on the 22nd March, 2001, in respect of the debts of Adson Salons Ltd to whom monies were advanced by way of facility letter dated 22nd March, 2001 by Anglo Irish Bank Corporation. The sum advance to the company was €250,000 to be repaid by instalments over 84 months.
Held by the High Court (MacGrath J) that, having considered the submissions of the parties, the authorities upon which reliance had been placed and the terms of the guarantee, as a matter of law, any ambiguity or lack of clarity surrounding the guarantee ought to be resolved in favour of the guarantor. MacGrath J noted that, in this case, the guarantee upon which the plaintiff sought to rely was that which was contained in a document which, in sequence, appeared and arose immediately after the main facility letter, prior to that part of the document which contained the resolution executed by the company and also prior to where the general conditions were contained. The facility letter stated that if there is any conflict between the terms of the facility letter and the general conditions, the terms of the facility letter shall prevail. The general conditions did not appear to make any specific reference to the terms of the guarantee and it seemed to MacGrath J that, on the face of it, it was arguable that given the reference to the facility letter under the heading “borrowers acceptance”, that they must be read together. That being the case, MacGrath J held that there was a potential for a conflict between the wording of the guarantee as relied upon by the plaintiff, and clause 3 of the facility letter. The court did not have to be satisfied that this was a case which would ultimately be made out at trial, merely that it was arguable. Bearing in mind the constitutional rights of the first defendant to defend proceedings brought against her, MacGrath J was not satisfied that it was clear that the defendant had no arguable defence either as a matter of law or as a matter of fact. MacGrath J found that the position of the second defendant was somewhat less clear. She had not sworn any affidavit but it seemed to MacGrath J that in the interests of justice the entire matter should be referred to plenary hearing where all issues concerning the liability of the defendants and the validity of the guarantees could be agitated.
MacGrath J held that he would refuse the relief sought and transfer the matter to plenary hearing.
Application refused.
Proceedings in this matter were instituted by way of summary summons issued on 16th March, 2017. The plaintiff claims, in total, the sum of €143.364.86 against the defendants on foot of guarantees provided by them on the 22nd March, 2001, in respect of the debts of Adson Salons Limited (“Adson”) to whom monies were advanced by way of facility letter dated 22nd March, 2001 by Anglo Irish Bank Corporation. The sum advance to the company was €250,000 to be repaid by instalments over 84 months.
It is claimed that by virtue of the provisions of the Credit Institutions (Stabilisation) Act 2010, the assets of Irish Nationwide Building Society were transferred to Anglo Irish Bank Corporation Limited on 1st July, 2011. Through a series of transactions and mergers, the Irish Banking Resolution Corporation ( “IBRC”) was created and this went into liquidation pursuant to the Irish Bank Resolution Corporation Act 2013 (Special Liquidation) Order on 7th February, 2013. Further, it is claimed that by virtue of a loan sale on 28th March, 2014, the special liquidators of IBRC assigned and transferred the benefit of the securities to the plaintiff.
Letters of demand were issued to the company on 7th December, 2015 seeking immediate repayment of the sum which was then due of €134,760.44. On 16th December, 2016 the plaintiff served a demand on the defendants in respect of their alleged liability for sums due on foot of the guarantees.
By application pursuant to notice of motion dated 5th April, 2018 the plaintiff seeks an order pursuant to O. 37 of the Rules of the Superior Courts for judgment against the defendants in the sum of €143,364.89.
The application is grounded on the affidavit of Mr. John Burke, director of the plaintiff. He outlines the history of the creation of the loan to the company, the guarantee provided by the plaintiffs and the transfer of the securities to the plaintiff. Mr. Burke exhibits relevant documentation including the facility letter of 22nd March, 2001, signed by the defendant as directors of Adson and by resolution of the same date, authorising the company to borrow the money.
In a replying affidavit sworn on 3rd May, 2018, the first named defendant raised an issue that the letter of guarantee upon which the plaintiff was seeking to rely had not been deposed to by Mr. Burke and it was nowhere exhibited in the proceedings. In a further affidavit of 9th November, 2018, the first named defendant on her own behalf and on behalf of the second defendant averred that she did not accept that the guarantee was capable of being transferred or assigned to a third party in the manner in which is alleged to have occurred in this case.
By way of affidavit of 17th December, 2018, entitled “Affidavit of Debt”, Mr. Burke, updated the amount of the claim and in a further affidavit sworn by him on 2nd April, 2019, which has been filed pursuant to leave granted by the court, he avers that the defendant admitted liability in a letter of 12th December, 2015. He also exhibits letters dated 19th December, 2016 and 22nd December, 2016 which it is maintained are attempts to resile from the admission contained in the letter of 12th December, 2015.
Importance has been attached to the letter of 12th December, 2015, which was written in reply to the plaintiff's letter of 7th December, 2015, in which the plaintiff purported to call in the guarantee. Ms. Yvonne Tuthill expressed surprise at receiving the letter of 7th December, 2015 because:-
“it was my clear understanding that Anglo Irish Bank had agreed to remove my name as a Guarantor on the facility which was granted to Adson Salons Limited and, not to myself as indicated in the first paragraph of your letter.
The release was requested by me in 2009 after my own company, Inishbirch Limited, had ceased trading and it was my personal shareholding in Inishbirch which had formed the security for the original guarantee offered to Anglo Irish Bank.”
Ms. Tuthill, in further correspondence replying to letters sent to her on the 15th and 16th December, 2016, referred to her letter of the previous year advising and reiterated that she had no liability. That she was written to one year later seeking payment within seven days was, as she described, unacceptable as she was a retired person living on a pension. She denied any liability and advised that “their own records will...
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