The Court of Appeal dismissed an appeal by a father against summary judgment enforcing a guarantee he gave for loans made to his son. The court extended the time for the appeal to proceed, but held that the evidence did not establish an arguable defence to the first guarantee. The claim concerning a second guarantee had already been remitted for a plenary hearing and was not decided in this appeal.
The loans were issued to the son in 2005 and 2007 to buy a site at Fethard-on-Sea, Co Wexford, and build the first of five planned houses. The bank said the father guaranteed the loans and secured the guarantees with a mortgage over agricultural land in Co Wexford. After repayment default, the bank sought judgment against both men.
In February 2015, the High Court granted judgment against the father under the first guarantee and sent the claim under the second guarantee to a plenary hearing. The son’s judgment was not appealed. The first order was perfected in June 2015, but no appeal was brought within the permitted 10-day period. After the High Court later amended the judgment amount downwards, the father appealed within 10 days of that amended order.
The Court of Appeal ruled that the appeal against the original order was out of time. It nevertheless extended the deadline to the date the appeal was filed, citing the father’s sworn statement that he had intended to appeal and the importance of the issues argued.
On the substance, the court found there was no evidence that the father signed the first guarantee because of undue influence, misrepresentation or another wrongful act by his son. It rejected the argument that a bank’s knowledge of a family relationship, by itself, created an independent defence if the bank had not ensured the guarantor received independent legal advice or freely agreed to the guarantee. The court said the authorities relied on concerned cases where undue influence or other wrongdoing by the borrower was alleged.
The father’s son had stated in an affidavit that his father did not receive independent legal advice, although the guarantee included a signed statement about the opportunity to obtain such advice. The father had not filed an affidavit in the High Court summary judgment proceedings. The Court of Appeal said there was no evidential basis to argue that he had not freely entered the commitment.
The court also rejected an argument based on the absence of a seal on the guarantee. Although the High Court had relied on a 2009 statute that did not apply to guarantees signed earlier, the Court of Appeal concluded that the absence of a seal was not fatal in light of the bank’s submissions and authorities. It dismissed the appeal.