The Court of Appeal has dismissed Damian Stapleton’s appeal against a High Court summary judgment for €6,385,044.64 plus interest, ruling that a mortgage’s limited-recourse clause did not prevent National Asset Loan Management DAC from enforcing a separate guarantee against him.
The appeal concerned loans made by Allied Irish Banks to Exito Limited to buy and develop lands in Gorey, County Wexford. Stapleton had sold the lands to Exito while retaining a bare legal interest in them. He was also a shareholder and, as a 25% shareholder, provided a guarantee. The loan was secured by a mortgage over his legal interest in the lands, a charge over Exito’s interest and guarantees from shareholders.
Stapleton argued that the mortgage limited the bank’s recourse against him to the mortgaged property, including where another document provided for liability. He said that restriction therefore prevented recovery under his guarantee. The guarantee covered Exito’s debt, subject to a cap limiting the amount recoverable from him to 25% of the facility, plus costs, expenses and interest.
The High Court granted summary judgment in March 2018. It found that the guarantee created a separate personal obligation and that the mortgage’s non-recourse provision related to Stapleton in his capacity as mortgagor. Stapleton appealed, arguing that the documents’ construction should not have been resolved summarily.
The Court of Appeal applied the “text in context” approach to interpreting the documents and considered whether there was a fair or reasonable possibility of an arguable defence. It said a court should uphold summary judgment on a construction issue only where the documents can be construed relatively straightforwardly and there is no real risk of injustice.
The appeal court concluded that the mortgage dealt with security over Stapleton’s retained legal interest in the lands. Its limited-recourse wording concerned his role as mortgagor and did not extend to his distinct role as guarantor. The court also considered the facility letter and the separate guarantee, which it said was enforceable regardless of other collateral or security.
The three-judge court dismissed the appeal. The order for summary judgment therefore remained in place; the appeal judgment did not make a new award beyond that High Court order.