The High Court granted Danske Bank A.S., trading as National Irish Bank, summary judgment against James Cummins and John Brennan on a €300,000 guarantee, plus interest. In a judgment delivered on 26 April 2013, Mr Justice Herbert found their affidavits disclosed no arguable defence. The ruling decided the bank’s application for summary judgment against those two defendants; it did not determine a trial of the guarantee claim.
The bank said the guarantee, dated 10 September 2007, secured borrowing by Totty Barry Taverns Limited. The company received a structured term loan facility of €910,000, intended to repay an existing Bank of Ireland loan and directors’ loans, and to cover professional fees and renovations. The facility letter required guarantees from Michael Walsh, Cummins and Brennan for at least €300,000. The judgment records that at least €810,000 was drawn down in March 2008.
Cummins and Brennan argued that they had not understood they were signing guarantees and relied on non est factum, undue influence and discharge of liability. They said Walsh, their accountant, had approached them about investing €5,000 each in a property transaction and that they were not told about the guarantee or the company’s loan. They also argued that the bank had failed to ensure a trust deed was executed for shares in the company before the loan was drawn down, contrary to conditions in the facility letter.
The judge held that the defendants had not raised an arguable case that they signed a document different in character from what they believed they were signing. Their counsel accepted that the signatures on the guarantee appeared to be theirs. The judgment noted that the document included a bold warning that a guarantor would have to repay the facilities if the borrower did not, and advised the signatories to obtain independent legal advice.
The court also rejected the undue influence argument at the summary stage. It found no arguable basis to show that the bank was put on inquiry about influence or had constructive notice of it. On the trust deed argument, the judge said the facility letter required a copy of the share purchase contract, not an executed trust deed. He concluded that the share sale agreement dated 21 December 2007 could satisfy that condition and that the defendants had provided no affidavit evidence that it had not been submitted to the bank.
The Master of the High Court had separately given the bank liberty to enter final judgment against Walsh, who had not appeared, for €311,208.34, including €11,208.34 in accrued interest. That order was made in November 2011. Herbert’s ruling concerned the bank’s application against Cummins and Brennan, which had been referred to the High Court.