The High Court granted Allied Irish Banks (AIB) summary judgment for €6 million against Siobhan Smith, finding she had not shown a credible defence to the bank’s claim under a guarantee she signed in 2008.
The ex tempore judgment was delivered by Mr Justice Twomey on 24 April 2018. AIB’s proceedings sought to enforce a guarantee signed by Ms Smith and her late husband, Frank Smith. The guarantee covered borrowings linked, among other things, to the purchase of Ashleaf Shopping Centre and was expressly capped at €6 million, although the underlying guaranteed sums exceeded €50 million.
Ms Smith alleged that her husband and son, Gary Smith, had represented the guarantee as limited to two houses she owned in the K Club, with no personal recourse beyond those properties. She also alleged that her husband bullied her and unduly influenced her into signing. The judgment records those matters as her claims, not findings that the alleged conduct occurred.
The court considered a 2013 settlement agreement between Ms Smith and her husband. She had received independent legal advice before signing it. The agreement acknowledged her obligations under the guarantee and provided for release from them in return for property sales and payment to AIB, with a target of €7.6 million. It also stated that payment of €6 million would end her liability under the guarantee.
The judgment noted that for almost three years after the settlement, Ms Smith, through her advisers, corresponded with AIB about proposals to comply with it. She did not raise misrepresentation or undue influence during that period. She first advanced those claims after AIB began enforcement proceedings in February 2018. Her explanation for the delay was that raising them would have felt like betraying her husband, whom she loved.
In deciding whether the case could proceed to a plenary hearing, the court applied the question of whether Ms Smith had a “credible defence”. Justice Twomey said she had not stated in her affidavits that she would not have signed the guarantee if she had known it was capped at €6 million rather than limited to the two houses, or if her husband had not persuaded her. The court found that omission crucial, particularly in light of her acknowledgment of the guarantee in the 2013 agreement after receiving independent legal advice.
The court concluded that Ms Smith had no credible defence to enforcement and granted summary judgment for €6 million. The source does not state any further terms of the order.