The High Court ordered a clause limiting Friends First Life Assurance Company’s recourse under a personal guarantee to be removed from a share pledge signed by businessman Dómhnal Slattery. It also awarded him €100,000, including aggravated damages, after finding that confidential information about his dealings with the insurer had been disclosed to an investor to pressure him in negotiations.
The dispute arose from financing for the St. Regis Hotel in Washington, where Friends First and Claret Capital, a private equity firm of which Slattery was a principal, held interests. Friends First had lent $14.05 million to a Claret Capital company. Slattery and fellow directors gave personal guarantees for that loan. He accepted he was bound by his guarantee until a 2009 deed pledging his JetBird shares was executed.
Slattery argued that clause 2.2 of the pledge limited his liability under the guarantee to the value recovered from the pledged shares. Friends First said the clause did not reflect the parties’ agreement and sought its removal, or alternatively rescission of the deed. The court found that the parties had agreed the pledge would provide additional collateral, but had not agreed to limit liability under the guarantee.
The judge found that Friends First and its solicitors had failed to notice the clause before signing. Emails showed Slattery knew the clause might not be accepted and that the insurer had not noticed it; the court found that he and his lawyer had at least wilfully shut their eyes to that likelihood. It ruled that the deed had been executed under unilateral mistake and ordered rectification by deleting clause 2.2. The court did not award damages to Friends First. It said the insurer could rely on the guarantee and recover sums due, but would hear counsel on the amount before making the final order.
The court separately found that Friends First, acting through its parent company Achmea, improperly disclosed information about Slattery’s financial dealings and the dispute to CVC Capital Partners. It rejected the stated due-diligence rationale, finding the disclosure was intended to put pressure on Slattery to accept the insurer’s negotiating position. Although he had not established specific financial loss, the judge said the disclosure was likely to harm his professional prospects and awarded €100,000 in damages, including aggravated damages.
The judgment did not grant Slattery the other declarations or relief he sought.