The High Court granted Allied Irish Banks plc judgment against James Doran for €126,195, plus interest and costs, on a personal guarantee signed in 2010. Mr Justice Max Barrett said he was bound by Court of Appeal authority to grant the bank the judgment it sought, despite expressing concern about the circumstances in which the guarantee was signed and Mr Doran’s advanced age.
AIB sought payment under the guarantee for debts owed by Mr Doran’s son and daughter-in-law. Mr Doran, an 80-year-old retired farmer with limited education and little experience in banking or commercial matters, said he signed the document at an AIB office in Carrick-on-Shannon after being asked by his son to attend. He said no one explained the document, gave him time to read it or advised him to seek independent legal advice. He said the meeting lasted three minutes and that he signed because he trusted his son.
The judge noted that AIB’s affidavit did not address how the guarantee was executed, leaving Mr Doran’s account effectively uncontroverted in the evidence. He distinguished an earlier Court of Appeal case because Mr Doran relied on evidence of alleged misrepresentation. His argument was that AIB failed to tell him that the borrowers were already in default when he signed the 2010 guarantee.
The court said it was uncertain whether Irish law imposed a duty on a bank to explain unusual features of an underlying transaction to a prospective guarantor. Even assuming such a duty could arise, the judge found no unusual feature established in the evidence that required explanation. The court also said undue influence was not squarely advanced and found no basis for a separate duty on the bank to ensure independent legal advice was obtained.
Mr Doran also challenged the detail in the summary summons, including the absence of an interest calculation and particulars of the demand. The judge held that the summons gave him sufficient information to understand the bank’s claim and that he had not shown that further particulars were needed to defend it.
The court rejected his argument that a guarantee clause allowing AIB to vary credit and make arrangements with borrowers was unfair under consumer contract regulations. It said Mr Doran had the opportunity to read the guarantee but chose to sign without doing so; the 2006 guarantee he had previously considered did not mean he had become familiar with a 2010 contract that was not then in contemplation.
Applying the summary judgment test, the judge found that Mr Doran had not advanced an argument justifying a plenary hearing. He said the Court of Appeal’s binding decision required him to grant judgment. The judge expressed the hope that AIB would take account of Mr Doran’s age in enforcing it, while acknowledging he could not dictate how the bank pursued its lawful commercial interests.