The Supreme Court has dismissed Brian Cunningham’s appeal against a €1.9 million judgment on his personal guarantee and a later award of €824,548.20 in statutory interest. The Court also rejected his attempt to revisit an earlier ruling that barred him from raising certain issues in the guarantee proceedings.
The appeal concerned a High Court judgment for First Active plc, delivered in July 2010, on Cunningham’s capped guarantee of debts owed by companies in the Cunningham Group. The High Court later awarded interest at 8% from the start of proceedings to judgment. The Supreme Court judgment was delivered by Mr Justice William M. McKechnie on 22 February 2018.
One ground concerned First Active’s transfer of banking business to Ulster Bank Ireland Limited in February 2010, before the High Court judgment. The transfer had not been brought to the trial judge’s attention at the time. Cunningham argued that First Active was no longer entitled to judgment and that the failure to formally substitute Ulster Bank made the proceedings irregular.
The Supreme Court held that section 41 of the Central Bank Act 1971 automatically substituted Ulster Bank for First Active in relevant pending proceedings. It said notification should have been given so the court record could be amended, but found that the omission had caused Cunningham no prejudice. Affidavit evidence that the transfer covered the proceedings had not been contradicted by contrary evidence. The Court amended the proceedings’ title to name Ulster Bank and dismissed this ground of appeal. It did not set aside the judgment.
Cunningham also argued that statutory interest should not apply because the underlying company debts carried contractual interest, and that the 8% award was excessive. The Court found that the guarantee was a separate personal obligation and that interest payable under the companies’ loan arrangements did not prevent an award under section 22 of the Courts Act 1981. It held that the trial judge had discretion over whether to award interest and the period covered, but not the statutory rate once interest was awarded. The judge had been entitled to award interest from the start of proceedings. The Supreme Court also rejected Cunningham’s complaint that refusing an adjournment on the interest application breached fair procedures.
The final ground sought to reopen matters covered by a non-suit ruling in the main proceedings. The Supreme Court said the appeal against the separate 2010 res judicata decision had already been dismissed after security for costs was not provided. This appeal could not serve as a route around that dismissal. It also agreed that the non-suit ruling had the effect of a decision on the merits for res judicata purposes. The Court dismissed all three grounds and the appeal in full.