The High Court has given judgment for Tennants Building Products Limited for €293,841, finding that a personal guarantee signed by Dennis O’Connell for a company’s trading debts was binding.
The judgment, delivered by Mr Justice Hogan on 17 April 2013, concerned obligations owed by O’Connell Dry Lining Ltd, which was in voluntary liquidation. Tennants claimed against O’Connell under a guarantee he signed in October 2008. The debt owed by the company was admitted.
O’Connell argued that he signed after being told by Tennants’ sales manager, Mr Cullen, that the guarantee was for presentation to the company’s London head office and would be put away without being enforced. He said this assurance was made at a meeting in Galway on 8 October 2008. Cullen denied visiting Galway for that purpose and said O’Connell had texted him two days earlier to say he had signed and would post the guarantee.
The court admitted an email Cullen sent to a credit controller on 6 October 2008, recording that O’Connell had signed the guarantee and was putting it in the post. Justice Hogan held that the email was a spontaneous contemporary record created before the circumstances of the guarantee became a potential issue in litigation.
The judgment said oral representations could, in principle, support a defence based on misrepresentation or a collateral contract, or show that the parties did not intend to create legal relations. But cogent evidence was required. The judge noted there was no written pre-contractual evidence that the guarantee was not meant to bind O’Connell. He also accepted evidence that Tennants needed further security to continue supplying the company on credit, and that the guarantee had been discussed at a 2010 meeting without O’Connell disputing its enforceability.
Justice Hogan concluded that the evidence supported, at most, representations that it was unlikely the guarantee would need to be called upon—not that it would never be enforced. He found that the guarantee had been signed and duly executed, and that the evidence did not establish the assurance O’Connell alleged.
The court therefore found O’Connell liable under the guarantee and gave judgment for Tennants for €293,841.