The High Court has refused the Governor and Company of the Bank of Ireland’s application for summary judgment against Daniel and Olive Cochrane over personal guarantees connected to two companies they owned and managed. The dispute will proceed to a plenary hearing, where evidence can be heard and tested in cross-examination.
The bank sought €571,952.63, plus further interest and costs, under guarantees for Cochrane and Co. (Drapers) Limited and Olivia Danielle Limited. The Cochranes accepted signing the guarantees, including two signed in July 2010, but argued that the later guarantees were obtained through undue influence and unconscionable conduct. Those claims remain allegations; the judge did not decide whether they were true.
The parties gave sharply different accounts of a meeting at the bank’s Athlone branch on 16 July 2010. The Cochranes said they had expected to discuss a €50,000 stocking loan and were pressured to sign guarantees without a proper opportunity to review the documents or obtain independent legal advice. They said the bank made the stocking loan conditional on their signing.
The bank disputed that account. Its employee Valerie Duncan said the meeting was to complete documents for the restructuring of the companies’ bridging loans, and that the €50,000 stocking loan had been approved the previous day. She described the meeting as professional and cordial and denied threatening to withdraw support. She also said the guarantee terms had been discussed in advance and that the Cochranes understood what they signed.
In his judgment, Mr Justice Barr said he had considerable doubt about the defendants’ prospects of proving undue influence, referring to their business experience and long relationship with the bank. But he found a fundamental dispute about what happened at the meeting. That conflict could not be resolved on affidavit evidence; both sides needed the opportunity to give oral evidence and have it tested in cross-examination.
The judge also sent the question of liability under two earlier guarantees, signed in September 2008, to the plenary hearing. He said it was unclear whether those guarantees were challenged on the same grounds and there was no separate breakdown of the sums owed under them.
The court refused summary judgment and directed that the case proceed to plenary hearing. It allowed four weeks for the bank to deliver a statement of claim, followed by four weeks for the defendants to deliver a defence. The ruling did not determine the ultimate liability under the guarantees.