The High Court has ordered Marian Stafford to contribute €724,514.37 towards a settlement paid to Bank of Ireland by Philip and Paula Stafford, after rejecting her defences to a contribution claim over a loan used to fund a car park development in Wexford.
The judgment, delivered by Mr Justice Brian J. McGovern on 28 November 2013, arose from a €5.36 million claim by the bank over a loan facility advanced in December 2005. Philip and Paula Stafford, who are husband and wife, settled the bank’s claim against all the defendants in February 2013, paying €3,506,776.06 plus interest and costs. Philip then sought contribution from Marian Stafford personally and on behalf of the estate of her late husband, Francis Gerard Stafford.
Marian Stafford argued that the claim was time-barred, that the loan was limited to the value of the car park security, and that her late husband had signed under undue influence and without sufficient mental capacity. She also argued that any contribution should be assessed as fair and equitable under the Civil Liability Act 1961.
The judge rejected the limitation defence. He found that the bank’s demand for repayment was made after Francis Gerard Stafford’s death in 2008, so the claim had not been one subsisting against his estate at the time of death for the purposes of the Act.
The court also found that the December 2005 facility was not limited recourse. Although the borrowers may have believed their liability was confined to the car park, the facility letter made them jointly and severally liable and did not cap personal liability at the value of the security.
On capacity and undue influence, the judge accepted evidence that Francis Gerard Stafford had suffered from depression and bipolar disorder, sometimes severely. However, he found no evidence that he lacked capacity to understand the loan obligations or that his brother had exerted undue influence. Witnesses described him as careful in business matters and able to understand documents presented to him.
The judge found the settlement with the bank reasonable and the claimed contribution fair and equitable. The parties had agreed the calculation: 20% of a new facility drawn down by Philip Stafford, one-third of accrued interest and one-third of specified security costs. The court ordered Marian Stafford to pay the resulting €724,514.37 contribution. The judgment does not state a separate order for further interest or costs on that contribution.