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Husband and wife have no fair or reasonable possibility of raising defence to bank’s judgment claim

By: Evan Kearney BL

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High Court grants a bank an order for summary judgment in the sum of €1.5 million against a husband and wife on foot of personal guarantees in favour of a company of which they were both directors, on the grounds that they have failed to meet the requisite threshold of having a fair or reasonable probability of having a bona fide defence to the bank’s claim.

Summary judgment - bank seeks judgement on foot of guarantee dated 21 July 2005 – defendants husband and wife, managing directors of Blackwood Taverns Ltd- defendants personally guaranteed payment on demand of all sums owed by Blackwood Taverns Ltd – two subsequent facilities granted by bank – 6 April 2010 for €50,000 – security letter provided for a guarantee from the defendants – 6 May 2010 for €1,500,000 – security letter provided for a guarantee and for mortgages over properties including the first charge over Dagwells Bar, Blackwood, County Kildare – monies never repaid – demand for repayment 18 September 2013 – receiver appointed over Blackwood Taverns Ltd19 September 2013 - 18 October 2013 a further demand for repayment – Dagwells Bar sold 16 May 2014 – net proceeds given to bank – further debt owed on foot of personal guarantees - first named defendant claimed there was an agreement that the personal guarantees would not be enforced – he was introducing business to the bank – agreement not to enforce guarantee was in lieu of commission – only signed guarantee on foot of that agreement –agreement made on 19th December 2005, six months after the guarantee had been signed - claims entitlement to any defence the company was entitled to – claims bank breached terms of agreement by appointing receiver – receiver there appointed unlawfully – claims exemplary damages from breach of contract and subsequent trespasss as receiver would have had no right to be on the property – exemplary damages exceed plaintiffs claim - claims to have been mentally vulnerable and a patient in St Edmunsbury Mental Hospital when the guarantee was signed – claims this was known to the bank - claim of agreement to not enforce guarantee only arose in March 2017 - delay of three years after payment was called for – if agreement was in place, defendant would have acted swiftly – in any event, this is an attempt to contradict the terms of the guarantee through parol evidence – not admissible if the intent is to contradict the written terms of the agreement – defence thus not arguable - with regards to alleged unlawful appointment of receiver, delay again arises with regard to credibility – several years between appointment of receiver and defendant alleging it to be unlawful in March 2017 – in any event, this would not be a defence by way of set off against the bank as it is unrelated to the terms of the guarantee on foot of which the bank claims – defence thus neither arguable nor a set off – Court not persuaded judgement on foot of guarantee should be stayed to allow the claim of set off to be heard - claim of mental vulnerability unsupported by any evidence – not stated as to how it is to amount to a defence – could not apply to second named defendant - bank entitled to judgement in the sum claimed.

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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