The High Court granted Allied Irish Banks plc summary judgment for €168,345 against Damian Donlon and Paul Copeland, finding neither had shown an arguable defence to the bank’s claim under a guarantee for Kapada Limited’s borrowing.
Mr Justice Birmingham delivered the judgment on 12 March 2014. The application concerned the second and third named defendants. The judgment says the bank had previously obtained judgment against the first named defendant; it does not identify the terms or amount of that earlier judgment.
The three defendants were directors and shareholders of Kapada Limited, described as a construction-sector project management company. The bank relied on a joint and several guarantee dated 11 December 2007, capped at €250,000. The judgment recounts that the bank had agreed facilities including an overdraft and loans, and that the defendants signed the guarantee. The amount sought in this application was €168,345.
Donlon, who represented himself, raised several points, including that he had no independent legal advice, his signature was not witnessed, the guarantee was not under seal, the Consumer Protection Code 2006 applied, and he might have a counterclaim about how the company’s bank account was operated. The judge held that none disclosed an arguable defence. He said there was no legal requirement for independent advice or a witness to a guarantee in these circumstances, and that the bank’s lending provided consideration despite the absence of a seal. He also found Donlon had guaranteed commercial borrowing as a director and shareholder, not in the capacity of a consumer. The possible counterclaim was unsupported by detail.
Copeland’s defence was that he understood he was responsible for only one third of the company’s borrowing, rather than being jointly and severally liable. He also referred to depression and uncertainty about how fully he understood the document. The judge considered his affidavit evidence at its strongest, but concluded that he knew he was signing a guarantee and that any misunderstanding about joint and several liability concerned the document’s legal effect. The judgment also found that his failure to read or seek advice about the relevant clause amounted to carelessness that prevented him from repudiating the guarantee.
The court concluded that neither defendant had established even an arguable defence and granted the bank the judgment it sought against both. The ruling was on the bank’s summary judgment application; it does not report a trial of the underlying claim.