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Borrower’s claims in respect of terms of loan guarantee were scarcely credible

By: Shane Kiely BL

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High Court grants an order for summary judgment in favour of a bank in the sum €1 million, on the grounds that the borrower was an active participant in the banking arrangements that led to monies being loaned, and claims that the contract included a term that the guarantee to be executed by him would never be relied upon by the bank, and was thus devoid of any force or effect, was scarcely credible.

Application for summary judgment brought by the plaintiff against the second named defendant ("the defendant") on foot of a guarantee - judgment has already been obtained against the first defendant in respect of an identical guarantee - defendant was at all material times a director and the secretary of a company that appears to have been engaged in property speculation - by letter of loan sanction dated the 11th January, 2007, the bank agreed to make a loan facility in the amount of €1 million available to the company for the purpose of purchasing a residential property with three adjoining sites - security provisions of the facility letter included the execution of a legal mortgage over the property being acquired together with a letter of guarantee to be executed by both defendants - defendant averred that essentially he thought the execution of the guarantee was merely a temporary measure to allow the drawdown of the funds and a revised offer letter would shortly be issued by the bank which would not include the requirement for the guarantee - submission by defendant that alleged representation by financial institution worked as an estoppel in his favour - apparent agreement on handwritten note from bank that arrangement fee would be waived - defendant was active participant in banking arrangements - judgment granted in the sum of €1 million.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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