The High Court dismissed two claims by Friends First Finance Limited over a €1.75 million loan and a related guarantee, finding that Charlotte Lavelle had established the defence of non est factum: the loan agreement was not her deed. The judgment was delivered by Mr Justice Charleton on 9 May 2013 in two proceedings heard together.
Friends First claimed Charlotte Lavelle had agreed to a revolving credit facility capped at €1.75 million, with an €8,750 arrangement fee and interest at 7.12%. The facility provided for 60 monthly payments of €10,184.12 and a final balloon payment of €1,758,750. The lender said it terminated the agreement in February 2012 after default. It also claimed Peter Lavelle had guaranteed sums due under the facility.
Charlotte Lavelle accepted that her signatures appeared on relevant documents but said she had signed them believing they related to the family trust. The judge accepted her evidence that she had not signed the facility letter in front of the named witness, whom she said she did not know. He found her a credible witness and accepted that she had not understood the documents to be a loan to her. The court found no negligence on her part in the circumstances described in the judgment.
The court also criticised the lender’s handling of the transaction. It had never met Charlotte Lavelle, did not know the circumstances in which she signed, and relied on Quinlan Private Investments to handle steps the lender would ordinarily have taken itself. The judge said the lender had departed radically from its usual procedures for checking and witnessing loan documents.
The judgment records that the loan was described as funding an equity investment in Quinlan Private Investments. Earlier correspondence concerned possible arrangements involving Peter Lavelle, a proposed partnership and a trust before the lender proposed lending directly to Charlotte Lavelle with a guarantee from her husband.
The judge said Peter Lavelle’s guarantee required consideration. If Charlotte Lavelle had not entered into the underlying loan, the guarantee lacked that essential element. The court also considered a separate argument under the Consumer Credit Act 1995, concluding that this defence would have been established if necessary.
Both claims were dismissed. The judgment does not specify any monetary award or separate order beyond dismissal of the claims.