The High Court entered judgment for Danske Bank A/S for €8,225,171.84 under a guarantee given by Séamus Coyne in connection with loans to T.C. Coyne Limited. The court held that the guarantee’s reference to “National Irish Bank Limited” was an error and, read in its commercial context, referred to the bank that provided the facility and was later succeeded by Danske Bank.
The disputed guarantee, dated 9 April 2008, capped liability at €8 million plus interest. It secured an €8.15 million facility offered to T.C. Coyne Limited on 2 April 2008. The facility documents also referred to a floating charge, mortgages over development sites in Mullingar and Killucan, County Westmeath, and proceeds from seven residential units in Dromod, County Leitrim.
The defence challenged the guarantee on several grounds. It disputed when and in what circumstances Coyne signed it: the bank manager said it was signed at his office on 9 April 2008, while the defence case was that it was signed on 21 July. The defence also argued that the named beneficiary did not exist at the relevant time and that the guarantee did not cover the borrower’s liabilities. The judge said Coyne’s evidence did not establish that he intended to contract with an entity other than National Irish Bank.
The guarantee had been prepared by bank manager Declan Cox using an old template. The court found that National Irish Bank Limited had ceased to be the bank’s trading name and that the relevant entity under its new name was the plaintiff’s predecessor in title. A later attempt to obtain a corrected guarantee was unsuccessful. The bank subsequently explained the naming error by letter and demanded payment on 24 November 2009.
Applying contract-construction principles, the judge concluded that the guarantee’s wording, viewed against the lending context, showed a common mistake about the bank’s name. He said the court could enforce the bargain by construing the document without first rectifying it. He added that, if that conclusion were wrong, he would have ordered rectification.
The judgment comprised €7,794,621.55 under the guarantee, €425,125.35 in interest accrued after demand, €30,289 for a separate overdraft liability that was not disputed, and €5,146.58 in interest. The court ordered further statutory interest from 23 June 2011, the date the judgment was perfected, until payment.
The judge refused Coyne’s application for a stay pending an appeal to the Supreme Court, saying there were no reasonably arguable grounds of appeal. He also refused the bank’s application for costs, citing the easily avoided error and lack of ordinary care. A costs order against the bank made by Kelly J. on 18 January 2011 in a separate procedural matter remained in place.