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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Irish Bank Resolution Corporation Ltd -v- Quinn & Anor [2011] IEHC 470 (16 December 2011)
URL: http://www.bailii.org/ie/cases/IEHC/2011/H470.html
Cite as: [2011] IEHC 470
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Judgment Title: Irish Bank Resolution Corporation Ltd -v- Quinn & Anor Composition of Court: Judgment by: Kelly J. Status of Judgment: Approved |
Neutral Citation Number: [2011] IEHC 470 THE HIGH COURT COMMERCIAL 2011 4513 S BETWEEN IRISH BANK RESOLUTION CORPORATION LIMITED PLAINTIFF AND
SEÁN QUINN AND PATRICIA QUINN DEFENDANTS JUDGMENT of Mr. Justice Kelly delivered on the 16th day of December, 2011 Introduction 2. The amount of the facility was €3m and the purpose was identified as being to provide the borrowers with a personal loan facility. The defendants were the borrowers and judgment has already been recovered against the first defendant, Seán Quinn. The facility was repayable on demand and no issue has been raised in these proceedings concerning the demand which was made. Terms 4. The third signature was appended under the legend “contracts negotiated away from the business premises of the bank”. I am satisfied that a signature was not in fact required at that point, but I will return to this later. 5. The fourth signature was an acknowledgement that Mrs. Quinn was waiving a right to a ten day period to reconsider her commitment to the agreement. 6. The final signature was an acknowledgement that she had read the conditions set out in the letter of facility and the general conditions of the credit agreement which formed part of the overall agreement and that she agreed to be bound by the provisions of the agreement. 7. Mrs. Quinn acknowledged that she was:-
8. The credit agreement of the same date indicated to her that she might withdraw from the agreement at any time within ten days of receiving it and advised her to take legal advice before it was signed. 9. A number of the general conditions of the bank are of relevance having regard to the lines of defence which have been outlined. 10. This borrowing was a joint borrowing by the defendants, who are husband and wife. Under clause 16 of the general conditions dealing with personal loans, it is expressly provided that:-
13. Under clause 9, bearing the heading “Representations and Warranties”, the borrower represented that he or she had made full disclosure of all facts in relation to the financial affairs of the borrower which would have a material effect on the ability of the borrower to meet the obligations undertaken. 14. Under clause 14, the borrower indemnified and agreed to keep indemnified the bank against all claims, demands, liabilities, losses etc. as provided for in that clause. 15. Finally, the general conditions provided that a certificate by any director of the bank as to the amount due from the borrower was to be conclusive evidence of what was stated save for any manifest error. The Test 17. There is now a wealth of jurisprudence, both in this Court and in the Supreme Court as to the approach to be taken on an application for summary judgment. 18. The threshold of proof which has to be achieved by a defendant is low. The test as identified by Hardiman J. in Aer Rianta v. Ryanair [2001] 4 IR 607, is this:-
20. For the purpose of this exercise, I propose to take the affidavit evidence sworn by Mrs. Quinn entirely at face value. Both in replying affidavits and in submissions, substantial criticism was made as to the credibility of a number of sworn statements made by Mrs. Quinn. For example, she took issue at being described as a “business lady”. She said that she is, in fact, a homemaker and has been such for the past 36 years or more. She says that her only role since the time of her marriage at 21 years of age was as a wife and mother, rearing her family and taking care of her husband and children. She said that she was never involved in any business or financial dealings beyond deciding upon the weekly groceries and providing for household expenses. She said that the description of her as a business lady is wholly incorrect. 21. In response, the plaintiff adduced evidence that Mrs. Quinn held directorships of in excess of 60 Irish companies. She was also company secretary of more than ten companies. She also held directorships in 28 companies registered in the United Kingdom and Northern Ireland. 22. Mrs. Quinn says that although she was appointed a company director, she did not possess any sophistication or even basic knowledge on business matters. She said she was never involved in any of the day-to-day decision making processes and was not employed by the Quinn Group of companies. 23. I leave to one side all questions of credibility concerning this and indeed other areas of dispute. I will deal with Mrs. Quinn’s sworn defence at its high watermark. I accept for the purpose of this application that everything said by Mrs. Quinn, pertinent to the lines of defence sought to be advanced on her behalf are accurate and true. Non Est Factum 25. The leading case is that of Saunders v. Anglia Building Society [1971] AC 1004, which was followed by Morris J. (as he then was) in this country in Tedcastle McCormick and Company Limited v. McCrystal (15th March, 1999) and by me in Allied Irish Banks Plc v. Higgins & Ors. [2010] IEHC 219. 26. Morris J. said as follows:-
(a) That there was a radical or fundamental difference between what he signed and what he thought he was signing; (b) That the mistake was as to the general character of the document as opposed to the legal effect; and (c) That there was a lack of negligence i.e. that he took all reasonable precautions in the circumstances to find out what the document was.”
31. Mrs. Quinn’s practice when any bank statements or documents generally to do with Quinn companies arrived at her home was to simply put them in a forwarding envelop to the Quinn Headquarters at Derrylin or to give them to her husband. She said that she had no appreciation of the existence of the facility, the provision of funds, or whether they had been purportedly lodged. She said that she did not even know that she was a customer of Anglo Irish Bank, the plaintiff bank as it then was. 32. Mrs. Quinn says that she had no recollection of signing the document or the contents or nature of the document ever being brought to her attention. She went on to say in her affidavits that prior to the receipt of the demands from the bank she did not believe that she had received any direct communication or contact from the bank or any official acting on its behalf. 33. On 19th December, 2006, Mrs. Quinn executed a further document, namely a joint account mandate by signing it on two occasions. She also provided a copy of her passport to the bank and that copy passport has been exhibited in affidavit evidence before me. 34. Even the most cursory of glances at the documents which bear her signature would alert any but the illiterate to the fact that this was some form or borrowing transaction. But it would appear that even such information was lost on Mrs. Quinn because she apparently simply signed documents as part of a course of conduct without giving the matter a second thought. That is the height of the case which she makes. I am satisfied that it is one which falls far short of providing even a statable defence on the basis of non est factum. 35. Mrs. Quinn has been unable to demonstrate even arguably the existence of the first of the three ingredients said forth by Morris J. in the Tedcastle McCormick case. She has to be able to demonstrate an argument that there was a radical or fundamental difference between what she signed and what she thought she was signing. The truth is, she gave no thought to what she was signing and, therefore, could not know whether there was any difference between what she was signing and what she thought she was signing. To use the words of Lord Reid, “she could not have such a belief unless she had taken steps or being given information which gave some grounds for that belief”. 36. Second, in order to establish an entitlement to rely on this defence, there has to be a lack of negligence on the part of the person seeking to set it up. What could more negligent than willy-nilly signing formal legal documents without giving any thought as to their effect? Mrs. Quinn has failed to provide any evidence of the existence of the third ingredient identified by Morris J. On this topic, I agree fully with the observations made by Clarke J. in ACC Bank v. Kelly, where he said:-
Undue Influence 39. It was argued during the course of the hearing that there is at law a presumption of undue influence between husband and wife. There is not. That much is clear from case law going back to the middle of the eighteenth century. In Halbury’s Laws of England (4th Ed.) para. 40, vol. 18, one finds on this topic the following under the heading “No presumption between husband and wife” – ‘it is noticeable that the relation of husband and wife is not one which gives rise to the presumption that undue influence was exercised’”. 40. In support of that statement, there is a line of cases which begins with that of Rigby v. Cox in 1750 going right through the nineteenth century and up until the twentieth century. So it is a principle that has been well established in law. Its effect was eloquently articulated in this jurisdiction by Carroll J. in In Re Hunting Lodges Limited [1985] ILRM 85. Now admittedly, Carroll J. was dealing with a different situation to what I am dealing with here. In her case, a wife sought to avoid personal liability for the debts of a miscreant company in circumstances where she acted as a director of that company. As part of her defence, she alleged that she was in fact a housewife and mother and that she really took no part in the running of the company and therefore should be able to avoid liability. This is what Carroll J. had to say:-
42. I am satisfied that there is no presumption of undue influence at law arising simply because of the relationship of husband and wife. That has been clear since at least 1750. 43. The lack of any presumption of undue influence is not, however, the end of the matter. The absence of the presumption does not mean that there could not be actual undue influence. But if there was such actual undue influence, there would have to be, at least, some evidence demonstrative of such impropriety. There is no evidence of any sort to support such a contention. There is no suggestion of Mrs. Quinn suffering from any intellectual disability, mental illness, feebleness of mind or cognitive impairment. Neither is there any evidence of any threats of bullying or such behaviour towards her by Mr. Quinn. There is not the slightest evidence to suggest any allegation of actual undue influence could be sustained. Accordingly, I am of the view that there is here neither a presumption of undue influence or evidence of any undue influence to make such an argument possible. Accordingly, this line of defence fails. Total Failure of Consideration 45. It is quite clear on the documentary evidence that the monies were, at the direction of her husband, transferred into one of the Quinn companies. But it is equally clear that Mr. and Mrs. Quinn were joint borrowers. Under the terms and conditions, which I have already alluded to, Mr. Quinn was entitled to give the direction which he did which is binding upon Mrs. Quinn. The bank was entitled to act on foot of that direction. It was no concern of the banks as to what happened to the monies thereafter. The monies were described as a personal loan facility. Whether the €3m was used to complete the decoration of the Quinn dwelling house or for some other purpose was a matter for the borrowers. 46. The plain fact in this case is that the loan was drawn down at the direction of Mr. Quinn and was utilised. It is also clear from the material that has been adduced before me that interest on the loan was serviced on a number of occasions, the loan being held in the joint names of the defendants. 47. Joint borrowings always give rise to the possibility that one of the borrowers may utilise the funds with no appreciable value being seen by the other borrower. That is the case with joint borrowings which are governed by terms and conditions such as apply here. If Mrs. Quinn does not consider that she got value for the borrowings then her complaint is against Mr. Quinn and not the bank. 48. I am satisfied that that no arguable defence has been demonstrated under this heading either. Final Comment 50. I am satisfied that there was no necessity for Mrs. Quinn to sign that part of the letter at all because this agreement was not signed in the presence of a representative of the bank. That is what is sought to be addressed by this provision. I am also satisfied that this provision is contained in the facility letter so as to comply with obligations imposed under Statutory Instrument 224/1989 entitled European Communities (Cancellation of Contracts Negotiated Away From Business Premises) Regulations. As there was no representative of the bank present, there was no necessity for this to be signed. It was in fact signed by Mrs. Quinn and witnessed. I am satisfied that there is no point by way of defence which can be raised in respect of this matter which arose only late yesterday afternoon when Mr. Shipsey was on his feet. Conclusion
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