The Supreme Court has dismissed an appeal by four guarantors against summary judgments in favour of the Governor and Company of the Bank of Ireland over debt owed by Lockson Construction Limited.
The judgment, delivered by Ms Justice Finlay Geoghegan on 4 October 2018, upheld a High Court order made on 18 July 2011. That order granted judgment against Edmund Heaphy and Oliver O’Sullivan for €768,016.37 each, plus interest and costs, and against Regina Heaphy and Mary O’Sullivan for €223,533.73 each, also with interest and costs.
The two men were directors of Lockson Construction, which had entered liquidation. The bank said the company owed money on a current account and a bridging loan. All four defendants had signed written guarantees for the company’s indebtedness. In the High Court proceedings, the defendants did not dispute that the guarantees had been signed or that the amounts claimed were due from the company.
On appeal, the defendants argued that the bank had not provided sufficient admissible evidence of the debt. The Court rejected that argument, finding that a senior business manager at the relevant bank branch had sworn positively to the amounts due and exhibited the guarantees. The defendants had not provided evidence disputing the company’s debt or showing circumstances that could make the guarantees invalid.
The defendants also argued that banking legislation and regulation following the financial crisis gave the bank a commercial advantage through the use of historic security valuations, while the guarantors remained liable for the full amounts. The Court found that this material did not establish an arguable defence to the guarantees or a counterclaim that could be set off against the debt. It said the alleged wrongdoing was attributed to the State or a regulatory authority, and the defendants had not established a basis for losses they suffered as a result.
The first defendant had filed a further affidavit in 2018, and the Court had indicated it would consider an application to admit it on appeal. Because the appeal failed on its merits even if the material were admitted, the Court said it was unnecessary to decide that application.
The Court dismissed the appeal. The High Court judgments therefore remain in place. The Supreme Court did not determine the application to admit the additional evidence.