The Court of Appeal has allowed Erwin O’Toole’s appeal against summary judgment for ACC Loan Management DAC, directing that the claim proceed to a plenary hearing on two arguable grounds. It did not decide whether the guarantee was under seal or whether ACC should have applied a €48,000 deposit earlier.
The dispute concerns a 2002 overdraft facility of up to €100,000 made to John O’Toole Construction Co. Limited. Erwin O’Toole, a company director, signed a personal guarantee and indemnity. The company later defaulted. ACC demanded €130,283.26 in April 2005 and subsequently sought summary judgment against the guarantor.
In an affidavit opposing the claim, O’Toole argued that the deposit security limited his exposure and that ACC had not explained what happened to the deposit. He also said the claim was statute barred because the company defaulted in 2003. ACC later stated that it had set off €46,286 of deposit money on 5 September 2011 and had mistakenly calculated interest without accounting for that set-off. It reduced its claimed amount from €261,305.20 to €182,705.21.
The High Court granted summary judgment in July 2015, finding that the guarantee was an instrument under seal and that the proceedings were not statute barred. It also accepted that credit had been given for the deposit and that the figures had not been challenged by a further affidavit from O’Toole.
On appeal, the Court of Appeal did not resolve the legal question about the seal. It said the issue had not been finally decided in Ireland and should be determined after a full hearing, rather than on the summary judgment motion. If the guarantee was not under seal, a six-year limitation period might apply; if it was under seal, the period could be 12 years.
The court also found that O’Toole had an arguable defence concerning when ACC should have set off the deposit. He contended it should have happened by the overdraft repayment date in May 2003, the bank’s demand in April 2005, or the following day, when the company went into liquidation. The court said oral evidence could be needed to determine why the set-off was delayed and how that affected the interest claimed.
The appeal court allowed the appeal and directed a plenary hearing, with O’Toole permitted to defend on those two grounds and with directions for pleadings. It made no final finding on either defence or on the amount ultimately payable.