The High Court has refused Allied Irish Banks plc’s application for summary judgment against Olive Lynch over €162,886.32 claimed under two guarantees for debts of Grove Oil (Roscrea) Ltd. The court granted Ms Lynch leave to defend and directed that the case proceed to a plenary hearing, where the disputed issues can be decided. It did not determine whether she was unduly influenced or whether the bank had notice of any influence.
The guarantees were signed in May 2011 and August 2012 by Ms Lynch and Conleth O’Sullivan. The first capped her liability at €135,700 plus interest and related to a €105,700 loan facility. The second capped it at €55,000 plus interest and covered overdraft and other facilities. The bank said the total due from Ms Lynch was €162,886.32. It sought final judgment against her alone in this application; the court noted that it was not seeking judgment against the company or Mr O’Sullivan.
Ms Lynch did not deny signing the guarantees. She argued that Mr O’Sullivan, her former partner, had exerted undue influence and that the bank knew, or should have known, of the circumstances. In affidavits, she said she had no role in the company’s business, was financially dependent on Mr O’Sullivan when she signed, and was not given independent legal advice about the guarantees. She also described questioning the amount on the first guarantee, after which the bank official left the room and told them to sort it out between themselves. That account was not controverted in the evidence before the court.
The bank relied on letters advising Ms Lynch to obtain independent legal advice and on documents relating to the guarantees and security over property at Knock, Roscrea. Its solicitor said Ms Lynch and Mr O’Sullivan had attended a solicitor before the May 2011 guarantee was signed. Ms Lynch disputed receiving advice about the guarantees and said the solicitor meeting concerned a mortgage. The judge identified aspects of her evidence that were unsatisfactory, including uncertainty about the timing of that meeting and the lack of separate detail about the 2012 guarantee.
Justice MacGrath applied the summary judgment test: leave to defend should be granted where there is an arguable defence, rather than requiring the defendant to show that it is likely to succeed. He concluded that Ms Lynch’s evidence, considered with the surrounding circumstances, went beyond a mere assertion both on undue influence and on whether the bank should have been put on inquiry. The judge expressly made no assessment of the defence’s likely strength or outcome at trial.