The High Court has dismissed Allied Irish Banks plc’s motion for summary judgment against Martin McGowan and Patricia McGowan in a dispute over overdrafts linked to the Scholars Townhouse Hotel in Drogheda. The defendants were given leave to defend on any grounds and the case was adjourned to a plenary hearing, where the claim and any defences can be considered in full.
The judgment, delivered by Mr Justice Richard Humphreys on 27 February 2020, concerned a summary summons seeking €122,202. AIB said each defendant entered a €100,000 overdraft facility on 1 June 2010, at an annual interest rate of 7.95%, repayable on demand. The defendants said the hotel had been acquired around 2005 and that Bank of Scotland (Ireland) had provided a letter of credit before declining to renew it after 2010.
The judge held that AIB had not adequately broken down the sum claimed into principal and interest. He also found that the bank’s evidence did not clearly explain the balance and interest calculations. An exhibit containing more than 800 pages of account statements had not been served on the defendants before the hearing, so the court considered it unfair to let AIB rely on it for the motion.
The defendants raised possible defences concerning the bank’s failure to call in the letter of credit, the statute of limitations and a 12% surcharge interest rate imposed in addition to the stated 7.95% rate. The judge said the failure-to-call-in argument had not been shown to be viable, but described the limitation and penalty-interest points as arguable. His comments on the possible defences were expressly obiter because the deficiencies in AIB’s summary judgment case were enough to send the matter to a plenary hearing.
The court did not decide whether the defendants owed the amount claimed or whether any defence would ultimately succeed. It dismissed the summary judgment motion, granted general leave to defend and adjourned the proceedings for a full hearing.