The High Court has given Allied Irish Banks (AIB) two weeks to clarify whether a May 2013 sanction letter replaced an earlier overdraft facility, before deciding whether a debt claim against Sheila Fanning should proceed to a full hearing. The judge said the same question had to be addressed in the bank’s claim against James Fanning, who had not defended the application or appeared at the hearing.
In a judgment delivered on 29 January 2019, Mr Justice Max Barrett said AIB had left the issue unanswered in its affidavit evidence. The June 2013 loan offer to Midland Web Printing Ltd, which was intended to take out an overdraft, stated that it superseded a May 2013 sanction letter. The offer lapsed before acceptance. Ms Fanning had questioned how she could be pursued as guarantor for overdraft liabilities said to arise under a February 2011 facility if a later sanction letter was in place.
The court directed AIB to file an additional affidavit within two weeks addressing whether the May 2013 letter existed and whether it replaced the February 2011 facility letter. Ms Fanning may file any further affidavit within the following two weeks. The judgment did not determine whether her case should be sent to a plenary hearing, and it made no order for judgment against either guarantor at that stage.
The claim concerned capped all-sums guarantees for debts owed by Midland Web Printing Ltd. Ms Fanning’s guarantee was dated 31 January 2008; Mr Fanning’s was dated 21 February 2011. The bank had made two overdraft facilities of €250,000 and €50,000 available in February 2011.
Ms Fanning also argued that proceeds from an encashed Bank of Ireland Lifetime Policy used as security for the facilities had been credited to a third account rather than the two overdraft accounts. The judge rejected that point, finding that AIB had acted in accordance with clause 6 of her guarantee. He also said her failure to recall signing the guarantee was not, by itself, a defence, and that a potential separate claim or complaint against AIB did not defend the present case.
AIB argued that an order could issue against Mr Fanning because he had not defended the claim. The judge rejected that submission: even in an undefended claim, the claimant must establish its case on the balance of probabilities. The court would first require clarification of the sanction-letter issue.