The High Court granted Allied Irish Banks plc judgment for €1 million against Tim O’Keeffe under a personal guarantee, finding that his proposed defences did not meet the threshold for a bona fide defence. The ruling was made on the bank’s application for summary judgment, not after a full trial.
Mr Justice Noonan delivered the ex tempore judgment on 6 June 2018. The bank had already obtained judgment against William Kennedy, the first named defendant, under an identical guarantee. The application before the court concerned Mr O’Keeffe alone.
The guarantees were given in connection with a €1 million loan facility made available in January 2007 to Island Field Properties Ltd to buy a residential property and three adjoining sites. The company later defaulted. The bank demanded payment from it in June 2013, then demanded €1 million from Mr O’Keeffe under his guarantee in September 2013.
Mr O’Keeffe argued that a bank official had represented that the personal guarantee “would not be a problem” and that he understood a cross-guarantee from a connected company would replace it. The judge said the alleged statement was vague and disputed. He found the proposed interpretation implausible and said it could not be used to contradict the written guarantee. He also pointed to Mr O’Keeffe’s correspondence with the bank in 2010, which made no mention of the position he later advanced.
A second defence challenged the bank’s proof of a valid demand, including a certificate concerning the underlying debt. The bank said it did not need to rely on that certificate because it had produced an order granting judgment against the company. The judge accepted that the order was conclusive evidence of the debt and that the guarantee’s certificate provision offered an alternative way to establish it.
The third defence was that changes to the company’s loan terms without Mr O’Keeffe’s consent discharged his guarantee. The guarantee allowed the bank to vary the credit without obtaining the guarantor’s consent. The judge also found that Mr O’Keeffe, as a director and company secretary who actively participated in the company’s banking arrangements, knew of and assented to the changes.
The court concluded that the defences lacked credibility or could not succeed and granted the bank judgment for €1 million. The ruling addressed whether the proposed defences justified a trial; it did not follow a plenary hearing.