The High Court has granted Danske Bank A/S judgment against Martin Shortt and Pauline Shortt on a claim under a written guarantee for debts owed by Blackwood Taverns Ltd. The court found the defendants had not shown a fair or reasonable probability of a bona fide defence to the claim. The judgment does not state the amount awarded.
Mr Justice Noonan delivered the judgment on 5 June 2019 in the bank’s application for summary judgment. The defendants had jointly and severally guaranteed the company’s debts, subject to a €1.5 million cap. The court said it was undisputed that they signed the guarantee on 21 July 2005.
The bank later provided the company with two facilities: €50,000 in April 2010 to renew an overdraft, and €1.5 million in May 2010 to restructure an existing loan. The company drew down the funds and did not repay them. After demanding payment from the company in September 2013, the bank appointed a receiver the following day. It demanded payment from the defendants under the guarantee in October 2013. The receiver sold Dagwells Pub and Restaurant in May 2014, and the net proceeds were credited to the company’s account.
In affidavits opposing judgment, Martin Shortt advanced three proposed defences. He alleged that bank employees had promised the guarantees would not be enforced, that the bank and receiver breached an agreement for a voluntary sale of Dagwells, and that his alleged vulnerability and hospitalisation when he signed made the guarantee unenforceable. The bank disputed his claims. The judgment records no affidavit from Pauline Shortt.
The judge said the alleged promise not to enforce the guarantee was said to have been made at a December 2005 meeting, five months after the guarantee was signed. He also noted that the issue had not been raised until March 2017, years after the bank’s demand. Applying principles from earlier cases, he concluded that the alleged oral promise could not provide an arguable defence to the written guarantee.
The judge found the proposed counterclaim over the receiver’s appointment and sale was vague, unsupported by corroborating evidence, and unrelated to the guarantee claim. It could not operate as a set-off defence. The defendants or company remained free to litigate that separate issue, but the judge was not persuaded that judgment should be stayed while they did so. The vulnerability claim was also unsupported by medical evidence, and the judge said it had not been explained how it could amount to a defence.
The court therefore granted the bank judgment on the claim. The decision addressed whether the defendants had an arguable defence at the summary judgment stage; it did not determine any separate claim the company might bring concerning the receiver.