The High Court ruled that Allied Irish Banks plc was entitled to judgment against Mark Smith in a claim over a company guarantee and sums said to be due on his personal accounts. The judge concluded that Mr Smith had not raised an arguable defence. The judgment does not specify the final amount of judgment or set out a separate formal order.
AIB claimed €230,000 under a guarantee of debts owed by Harmark Developments Ltd, which was in liquidation, and €78,479 on Mr Smith’s personal accounts at the date of the summons. The bank said the total, after credits, exceeded €300,000 and claimed continuing interest.
Mr Smith disputed signing an enforceable guarantee. He said he signed a single page at the bank’s Bray branch without seeing the full document, receiving a copy or having the chance to obtain legal advice. He also argued that consumer protection legislation applied. On the personal accounts, he said the funds had gone to the company, rather than benefiting him, and that the bank knew the accounts were used for company business.
AIB’s evidence included the guarantee, a sanction letter making a personal guarantee a condition of lending to the company, and signed banking documents. A bank official said she witnessed Mr Smith sign the guarantee and received a copy. The judge noted that the original document produced in court was a complete, multi-page form. He also highlighted differences between Mr Smith’s descriptions of whether he had been shown a single unattached page or only the signature page.
Applying the test for summary judgment, the court assessed whether the proposed defences were credible and presented a fair or reasonable probability of a real defence. It found Mr Smith had agreed to provide a guarantee as a condition of the company’s credit and that his account of signing without knowing what he was signing was not credible. The judge concluded he had not established the requirements for a defence of non est factum, which can apply where a person signs a document fundamentally different from what they believed it to be, without negligence.
The court held the Consumer Credit Act 1995 did not apply to the company’s borrowing because the company was not a consumer under the Act’s definition. It also found the Consumer Protection Code 2006 did not apply because Mr Smith was not acting as a consumer; in any event, a breach of the code would not by itself invalidate the guarantee.
On the personal-account claim, the judge relied on signed debit and lodgment documents and found no supporting evidence for Mr Smith’s claim that the accounts were operated for the company without personal liability. The court concluded that no arguable defence had been made out and that AIB was entitled to judgment.