The Court of Appeal has allowed Sean Cuddy to defend Allied Irish Bank plc’s claim under a €1.5 million guarantee, finding that evidence of an alleged collateral agreement just met the threshold for a plenary hearing.
In a judgment delivered on 30 July 2020, Ms Justice Costello agreed with the decision of Mr Justice Collins to allow the appeal. The court’s decision was limited: Cuddy may defend the proceedings on the limited recourse ground identified in Collins J’s judgment. Costello J did not decide whether the alleged agreement existed or whether the defence would succeed at trial.
The dispute concerned security for an additional facility to be advanced to a company. Cuddy maintained that recourse was to be limited to a warehouse provided as security. The bank’s position, as described in the judgment, was that the security was a €1.5 million guarantee supported by, but not limited to, a mortgage over the warehouse.
Cuddy’s defence relied on oral representations or assurances allegedly made to him in November 2007 and to his agent, Mr Comerford, in December 2007. Costello J said Cuddy’s evidence alone would amount to mere assertions and would not meet the low threshold for sending the case to a full hearing. But she found that, when considered alongside Comerford’s affidavit, the evidence just met that threshold.
The judgment noted a gap in Cuddy’s account: although he relied on representations concerning a facility offered in December 2007 and accepted in March 2008, he did not expressly say that he entered into the 2008 guarantee on the basis of those representations. Costello J said that omission might be fatal to his application, but cautioned against finely parsing affidavits at the summary judgment stage.
She said a court considering summary judgment should not reject a defence simply because it appears weak or likely to fail. The competing accounts of the security were significantly different, but were not as directly contradictory as the documentation in a prior case discussed in the judgment. With the balance finely drawn, Costello J concluded that it tipped in favour of allowing Cuddy to defend the claim.