The High Court has entered judgment for Everyday Finance DAC for €10,782,867.58 against Joan Flood, as legal personal representative of her late husband, following a dispute over guarantees he gave for loans to his sons’ property venture.
In a judgment delivered on 26 April 2024, Ms Justice Stack found that John Joseph Flood had capacity when he signed the guarantees in May 2007. She also found that his relationship with his son David gave rise to a presumption of undue influence, which was not rebutted by the legal advice he received. The guarantees were also an improvident transaction, the judge concluded.
The guarantees totalled €11.5 million. One, for €1.5 million, supported an overdraft for the Flood Partnership, formed by David, Tom and Alec Flood. The other, for €10 million, supported a loan to Tom and Alec to buy a development site at Railway Avenue, Sutton. The judgment said the development scheme failed and that the site was later sold for far less than its purchase price.
The guarantees were backed by a charge over lands in County Meath that included the family home. The judge said Flood appeared to understand that the bank’s recourse would be limited to the quarry lands, and did not appreciate that his other assets could also be at risk. The charge’s validity under the Family Home Protection Act was not decided; the judgment left that issue to pending Circuit Court proceedings.
The judge found that David Flood managed his father’s post and household bills, arranged the solicitor appointments and drove him to them. She rejected his evidence that he was present during either legal consultation or had pressured his father there. The solicitors acted independently, but the advice did not adequately assess Flood’s assets, income or the risks to his family home and livelihood, the judgment said.
However, the court found that the bank had required independent legal advice and received confirmation from the solicitor that Flood understood the consequences of the first guarantee. It was entitled to rely on that assurance and had no notice that the advice was inadequate. The guarantees were therefore enforceable by Everyday Finance as successor to the bank.
At a hearing on 3 May 2024, the lender waived interest from the date of demand. The court entered judgment for €10,782,867.58, lower than the €11,637,422.35 originally sought, which included that interest.