The High Court has directed a plenary hearing in a dispute over whether a company director’s €50,000 personal guarantee covered the company’s debt generally or only a reduction in its credit facility.
H.K.C. Limited had sought liberty to enter final judgment against John Mulrane for €50,000, plus continuing interest at 8% a year from 13 January 2016. Its motion relied on a written guarantee dated 21 April 2015. The company said Borsatec Limited owed it €144,983.30 and had recently entered liquidation.
H.K.C. director Nicolas Quigley’s affidavit said the guarantee secured sums owed by Borsatec, up to €50,000. Mulrane disputed that interpretation. He said he understood the guarantee to cover the difference between Borsatec’s €200,000 credit facility and a proposed reduction to €150,000. He also said he signed after being told the facility would be maintained at €200,000 and that the guarantee would be torn up once the account was regularised.
Quigley disputed Mulrane’s account of the proposed credit reduction. He said H.K.C. had sought a reduction to about €185,000, achieved through additional monthly payments of €5,000. Emails exhibited in the affidavits included Quigley’s statement that the credit limit would be restored to €200,000 once Mulrane signed a €50,000 guarantee. Mulrane later confirmed by email that he would sign a guarantee in that amount in favour of H.K.C. against Borsatec’s account.
The judgment also records later communications about Borsatec paying down its debt, including a September 2015 letter proposing monthly payments of €35,000 and a subsequent email reporting a €5,000 transfer and difficulty meeting that repayment rate. Mulrane maintained that the guarantee was limited to the credit facility reduction. The affidavits differed on the proposed reduction and whether delayed invoice payments amounted to defaults.
Applying the summary judgment principles set out in earlier cases, the judge said the papers disclosed a dispute about whether the guarantee arose from a proposed reduction of the credit limit from €200,000 to €150,000, followed by its restoration to €200,000. He noted that the stated debt of €144,983.30 was below the €150,000 limit.
The court did not decide the ultimate meaning or enforceability of the guarantee. It directed that the case proceed by plenary hearing; the judgment records no final judgment against Mulrane on the motion.