Ulster Bank Ltd v Fitzgerald and Williams

• Jurisdiction: Ireland
• Judge: Mr. Justice Diarmuid B. O'Donovan
• Judgment Date: 09 November 2001
• Neutral Citation: [2001] IEHC 159
• Court: High Court
• Date: 09 November 2001

[2001] IEHC 159

THE HIGH COURT

1999 No. 197 S

ULSTER BANK (IRL) LTD v. FITZGERALD & WILLIAMS (ORSE FITZGERALD)

BETWEEN

ULSTER BANK IRELAND LIMITED

PLAINTIFFS

AND

KENNETH FITZGERALD AND CATHERINE WILLIAMS (OTHERWISE CATHERINE FITZGERALD)

DEFENDANTS

Citations:

BARCLAYS BANK PLC V O'BRIEN 1994 1 AC 180

BANK OF IRELAND V SMYTH 1995 2 IR 459

FAMILY HOME (PROTECTION) ACT 1976

Synopsis:

BANKING LAW

Guarantees

Contract - Company law - Credit and security - Joint and several guarantee - Summary judgment - Presumption of undue influence - Conflict of evidence - Claim on foot of guarantee - Obligation to obtain independent legal advice - Whether summary judgment should be granted - Whether bank had constructive notice of undue influence - Whether defendant had financial stake in business of company (1999/197S - O'Donovan J - 9/11/01)

Ulster Bank Ireland v Fitzgerald

The plaintiff bank instituted proceedings for monies claimed to be due and owing to them from a company being operated by the first defendant on foot of guarantees executed by the defendants. Judgment had already been granted to the plaintiff in respect of a sum owed by the first defendant and judgment was now sought in respect of monies allegedly owing by the second defendant who was the wife of the first defendant. Liability had been admitted by the second defendant in respect of sums owed on foot of a current account. However a dispute rose as to monies that were allegedly due on foot of guarantees signed by the second defendant. On behalf of the second defendant it was asserted that she had no financial interest in either of the guarantees and undue influence had been exercised over her by her husband to sign the said guarantees. During the hearing a conflict of evidence emerged relating to when the defendants had signed the guarantees in question.

Held by Mr. Justice O’Donovan in granting the judgment sought. Notwithstanding the evidence tendered by the second defendant the court accepted the evidence of the bank manager that the defendants had signed the guarantees on the dates alleged. While the first defendant might have exercised inordinate pressure on his wife to sign the guarantees the court was not persuaded that the plaintiff had constructive notice that the second defendant had executed the guarantees as a result of undue influence. The court did not accept the submission that the second defendant had no financial stake in the business of the company concerned. There was no obligation upon the plaintiff to urge the second defendant to obtain independent legal advice before the signing of the guarantees. Furthermore there was no substance to the suggestion that the family home had been put at risk as the only relief sought was a money judgment. Judgment was granted to the plaintiff for a sum of £129,741.

1 JUDGMENT of Mr. Justice Diarmuid B. O'Donovan delivered on the 9th day of November. 2001.

2 At the outset, on the application of Counsel for the Plaintiffs to which the Defendants did not object, I amended the title to these proceedings by substituting the name Ulster Bank Ireland Limited for the name Ulster Bank Limited as Plaintiffs.

3 The Plaintiffs claim herein, as against the First Named Defendant, is for the sum of £203,971.85, together with interest thereon, and, as against the Second Named Defendant, for the sum of £106,832.92, together with interest thereon. The said sums of money are alleged to be due and owing by the Defendants to the Plaintiffs; firstly, in respect of monies advanced by the Plaintiffs to and at the request of the Defendants and each of them on foot of a joint and several personal Current Account number 53631019 (hereinafter called the "Current Account") maintained by the Defendants at the Tralee Branch of the Plaintiffs Bank situate at 43-44 Ash Street, Tralee in the County of Kerry, secondly being monies due and owing to the Plaintiffs by the Defendants for principal and interest under and by virtue of a guarantee in writing dated the 16th October, 1997 whereby the Defendants and each of them, in consideration of the Plaintiffs giving time, credit, banking facilities or other accommodation to Fernhill Developments Limited of 11 Denny Street, Tralee, County Kerry (hereinafter called "the Debtor"), guaranteed payment to the Plaintiffs on demand of all present or future or actual contingent liabilities of the Debtor to the Plaintiffs howsoever incurred and, thirdly, monies due and owing by the Defendants to the Plaintiffs for principal and interest under and by virtue of a guarantee in writing dated the 12th March, 1998 whereby the Defendants and each of them, in consideration of the Plaintiffs giving time, credit, banking facilities or other accommodation to the said Debtor guaranteed payment to the Plaintiffs on demand of all present or future or actual or contingent liabilities of the Debtor to the Plaintiffs howsoever arising.

4 By Order of this Honourable Court made herein on the 26th June, 2000, it was Ordered (inter alia) that the Plaintiffs do recover from the First Named Defendant a sum of £215,881.34 and the cost of these proceedings, when taxed and ascertained.

5 The Plaintiffs claim aforesaid against the Second Named Defendant came on for hearing before me on Wednesday 10th October, 2001. At the commencement of the hearing, Counsel for the Second Named Defendant indicated to me that, in accordance with paragraph 12 of an Affidavit sworn herein by the Second Named Defendant on the 4th February, 2000, she accepted liability to the Plaintiffs for the principal sum of £10,169.35, together with interest thereon amounting to £1,036.57, on foot of the Current Account aforesaid and, for their part, Counsel for the Plaintiffs indicated that they were satisfied to accept the said sums in satisfaction of their claim against the Second Named Defendant on foot of the said Current Account.

6 Insofar as the Plaintiff's claims against the Second Named Defendant on foot of the said guarantees in writing, respectively dated the 16th October, 1997 and the 12th March, 1998, were concerned, the Second Named Defendant, through her Counsel, maintained that the said guarantees in writing were not enforceable against her for the reason that, while she accepted that the signatures to the said guarantees, which purported to be hers, were, in fact, made by her, she asserted; on the one hand, that she, personally, had no financial interest in either of the said guarantees and, on the other, that she had been persuaded to execute the said guarantees by an undue and wrongful influence exercised over her by the First Named Defendant who is her husband; a wrongful influence of which the Plaintiffs were aware, or are deemed to have been aware.

7 In the course of the hearing before me, I heard evidence from a number of witnesses and, in particular, I heard evidence from Mr. Teddy Reynolds, who was the Manager of the Branch office of the Plaintiff's Bank situate at Ash Street, Tralee in the County of Kerry at the material time, and from the Second Named Defendant, Catherine Williams (otherwise Fitzgerald). Mr. Reynolds gave sworn testimony that he had witnessed the...