The Governor and Company of the Bank of Ireland -v- Heaphy and anor, [2018] IESC 46 (2018)

Docket Number:346/2011
Party Name:The Governor and Company of the Bank of Ireland, Heaphy and anor
 
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THE SUPREME COURT[Appeal No: 346/2011]

O'Donnell J.

MacMenamin J.

Finlay Geoghegan J.

Between/

The Governor and Company of the Bank of Ireland Plaintiff/Respondentand

Edmund Heaphy, Regina Heaphy,

Oliver O’Sullivan and Mary O’SullivanDefendants/Appellants

Judgment of Ms. Justice Finlay Geoghegan delivered on the 4th day of October, 2018.

  1. This appeal is against an order of the High Court (O'Neill J.) made on the 18th July, 2011 granting judgment on an application for summary judgment against each of the first and third named defendants, Mr. Heaphy and Mr. O’Sullivan in the sum of €768,016.37 together with costs and interest and against each of the second and fourth named defendants, Mrs. Heaphy and Mrs. O’Sullivan in the sum of €223,533.73 together with interest and costs.

  2. A notice of appeal was filed in August, 2011 in reliance upon five specific grounds of appeal. The appeal had not been heard prior to 2014 and was the subject of the direction made by the Chief Justice with the concurrence of all the other judges of the Court pursuant to Art. 64 of the Constitution on the 29th day of October, 2014. Subsequently, the Art. 64 transfer was cancelled and the matter reverted to this Court.

    Background Facts

  3. The first and second named defendants are husband and wife as are the third and fourth named defendants. Mr. Heaphy and Mr. O’Sullivan were directors of a company, Lockson Construction Limited (“the Company”). All four defendants gave guarantees in writing to the plaintiff in respect of the indebtedness of the Company. Mr. Heaphy and Mr. O’Sullivan each gave six guarantees, Mrs. Heaphy two guarantees and Mrs. O’Sullivan one guarantee.

  4. Prior to July, 2010 a liquidator had been appointed to the Company. At that time it was contended by the plaintiff that it was owed by the Company a sum of €450,159.18 on a current account held at 32 South Mall, Cork together with interest of €931.15 due as at the 5th July, 2010. The plaintiff also claimed a sum of €311,497.67 together with interest of €860.24 due on the 5th July, 2010 in respect of a bridging loan made to the Company on the terms set out in a letter of the 9th May, 2008 and which was to have been repaid within three months.

  5. On the 5th July, 2010 the solicitors for the plaintiff by letter addressed to the liquidator of the Company demanded payment of the sum of €763,448.24 within seven days. On the same date letters were sent to each of the first and third named defendants seeking payment of the same sum with interest pursuant to their guarantees and to the second and fourth named defendants seeking payment in the sum of €222,204.16 together with interest pursuant to the guarantees signed by those defendants. No payments were made to the plaintiff.

  6. The plaintiff issued a summary summons on the 14th July, 2010 seeking judgment for the sums demanded from each of the four defendants; an appearance was entered on behalf of all four defendants and a motion for summary judgment issued on the 15th October, 2010. That motion was grounded on an affidavit of Janet Seacy a senior business manager at the branch of the plaintiff at 32 South Mall, Cork. In the affidavit she deposed to and exhibited copies of the six letters of guarantee executed by the first and third named defendants, the two letters of guarantee executed by the second named defendant and the single letter of guarantee executed by the fourth named defendant.

  7. At para. 7 of her affidavit she referred to the account maintained by the Company with the plaintiff and deposed that there was “due and owing in respect thereof as of the 5th day of July 2010 the principal sum of €450,153.18 together with the sum of €931.15 in respect of interest”. She also averred that the principal sum “has been calculated in accordance with standing banking practice and the Company has been made aware of same by the delivery to it from time to time of Bank Statements”.

  8. Ms. Seacy also exhibited the facility letter making available the bridging loan and deposed that the sum due and owing on the bridging loan was the principal sum of €311,497.67 and €860.24 in respect of interest.

  9. She also deposed to and exhibited the letters of demand sent to the liquidator of the Company and the demands made on each individual guarantor and finally deposed to the amounts due by each. In response thereto Mr. O’Sullivan swore three affidavits on behalf of all the defendants. Those affidavits raised a number of points primarily in relation to documentation which had been sought on their behalf by their solicitors.

  10. It is relevant both to the High Court decision and this appeal to note that Mr. O’Sullivan did not dispute that the guarantees had been signed by the relevant defendants and did not dispute that the amounts claimed were due and owing by the Company on the current account and in respect of the bridging...

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