Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Ulster Bank Irl Ltd -v- Quinn & anor [2015] IEHC 376 (21 May 2015)
URL: http://www.bailii.org/ie/cases/IEHC/2015/H376.html
Cite as: [2015] IEHC 376
[New search] [Help]
Judgment
| ||||||||||||||||
Neutral Citation: [2015] IEHC 376 THE HIGH COURT [2013 No. 88 S.] BETWEEN ULSTER BANK IRELAND LIMITED PLAINTIFF AND
MICHAEL QUINN AND BRIDGET QUINN DEFENDANTS JUDGMENT of Mr. Justice McDermott delivered on the 15th day of June, 2015 1. This is an application by the plaintiff seeking summary judgment in the sum of €97,574.73 which is claimed to be due and owing on foot of a guarantee furnished by the defendants to the plaintiff as security for an overdraft facility furnished by the plaintiff to Clough Valley Stores Limited, which is now in receivership. 2. An appearance was entered to the summary summons on 31st May, 2013, and the motion seeking judgment issued on 15th August, 2013. 3. In an affidavit sworn on 9th August, 2013, Mr. Eoin O’Shea, a senior manager of the plaintiff, claims that the defendants have no defence to the claim either at law or on the merits and that the appearance has been entered solely for the purpose of delay. The defendants appeared but were unrepresented at the hearing of this motion. 4. The court has a jurisdiction to refuse leave to defend and to grant summary judgment but this must be exercised sparingly on the basis of the well established principles set down in Aer Rianta c.p.t. v. Ryanair (No. 1) [2001] 4 IR 607, in which Hardiman J. stated that the fundamental questions to be posed on an application such as this are:-
6. McKechnie J. in Harrisrange Limited v. Duncan [2003] 4 IR 1, summarised the principles applicable in the following way:-
(ii) in deciding upon this issue the court should look at the entirety of the situation and consider the particular facts of each individual case, there being several ways in which this may best be done; (iii) in so doing the court should assess not only the defendant’s response, but also in the context of that response, the cogency of the evidence adduced on behalf of the plaintiff, being mindful at all times of the unavoidable limitations which are inherent on any conflicting affidavit evidence; (iv) where truly there are no issues or issues of simplicity only or issues easily determinable, then this procedure is suitable for use; (v) where however, there are issues of fact which, in themselves, are material to success or failure, then their resolution is unsuitable for this procedure; (vi) where there are issues of law, this summary process may be appropriate but only so if it is clear that fuller argument and greater thought is evidently not required for a better determination of such issues; (vii) the test to be applied, as now formulated is whether the defendant has satisfied the court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, ‘is what the defendant says credible?’, which latter phrase I would take as having as against the former an equivalence of both meaning and result; (viii) this test is not the same as and should be not elevated into a threshold of a defendant having to prove that his defence will probably succeed or that success is not improbable, it being sufficient if there is an arguable defence; (x) leave to defend should not be refused only because the court has reason to doubt the bona fides of the defendant or has reason to doubt whether he has a genuine cause of action; (ix) leave to defend should be granted unless it is very clear that there is no defence; (xi) leave should not be granted where the only relevant averment in the totality of the evidence, is a mere assertion of a given situation which is to form the basis of a defence and finally; (xii) the overriding determinative factor, bearing in mind the constitutional basis of a person’s right of access to justice either to assert or respond to litigation, is the achievement of a just result whether that be liberty to enter judgment or leave to defend, as the case may be.” 8. The documentary evidence exhibited by the parties in the case establishes the following facts:-
(b) Pursuant to the terms of the facility letter of 15th October, the Bank had agreed to provide and provided an overdraft facility in respect of account No. 10706499 to the company at the bank’s Dundalk branch to a limit of €100,000 for the purpose of working capital. Repayment was subject to the bank’s right to demand repayment at any time with a right to “review by 15th January, 2011” and the bank was not obliged to continue the facility after that date. The letter was addressed to Clough Valley Stores Limited and the defendants, and it was indicated that if the facility letter was accepted, it should be returned, signed and dated by authorised persons together with a certified copy of a resolution of the board of directors. Both defendants signed the acceptance of the offer of loan facility on 28th October, 2010, the same date as the passing of the company resolution required. (c) The defendants signed the guarantee, the subject matter of these proceedings, on 28th October, 2010. Under paras. 1.1 and 1.2, in consideration of the bank providing the overdraft facility to Clough Valley Stores Limited, the defendants irrevocably guaranteed to discharge on demand the debtor company’s obligations with interest from the date of demand, the liability not to exceed €100,000 together with interest on that sum. Under para. 2, the guarantors provided an indemnity for costs to the bank. Paragraph 9.2 provides that the bank shall not be obliged before making demand under the deed to take any action or obtain judgment against the debtor company, to make or file any claim in the insolvency of the debtor or to exercise diligence or make demands of the debtor under the facility letter. Paragraph 20.4 provides that the guarantors consented to service when required by post at their last known address and undertook to enter an unconditional appearance within fourteen days of the service of the proceedings.
Your rights. You are recommended to take independent legal advice before signing. The limit of your liability will be as provided in clauses 1 and 2.” 10. On the same date, 28th October, 2010, each of the defendants signed documents headed “waiver of legal advice - fully involved director”. The defendants separately signed waivers acknowledging the obligations incurred under the guarantee and that they might have to pay the bank instead of the borrower. They acknowledged that they had been advised to take independent legal advice, were directors of the company named as the borrower and played an active role in the running of the company. They accepted that they had a full understanding of its financial affairs including the liabilities of the bank covered by the securities. The waivers acknowledged that the guarantors had adequate time to read and consider the terms of the guarantee and had not been placed under any pressure to sign the security, and were well aware of their rights not to take the risks associated with it. 11. On 13th January, 2011, a receiver was appointed over Clough Valley Stores Limited, now operating as Clough Valley Stores Limited (in receivership). 12. On 27th September, 2012, the plaintiff’s solicitor by letter demanded payment of the claimed sum from the company. On the same date, a letter of demand was sent to the defendants. 13. On 15th March, 2012, further letters were sent to each of the defendants for payment of €93,816.32, due to the bank by Clough Valley Stores Limited (in receivership) on foot of the guarantee. They were informed that interest would commence to run against this liability from that date. 14. To date, the amount claimed has not been discharged by either defendant. 15. The defendants have filed a number of affidavits:-
(ii) supplemental affidavit of Michael Quinn sworn 31st July, 2014, and (iii) supplemental affidavit of Michael Quinn sworn 24th November, 2014. 17. The points raised by way of proposed defence by the defendants are as follows:-
(b) It is said that no letter of demand was ever issued to the defendants of which they were aware, and it is not accepted that two letters of demand issued to each of the defendants. However, the two letters of demand have been exhibited and the second letter of 15th March, 2012, is quite specific and is addressed to the defendants at the address agreed in accordance with the terms of the guarantee. (c) The defendants claim that the receiver was appointed on 13th January, 2011, and the debt is to be discharged by the receiver. They contend that there is no evidence of any recourse by the bank to the receiver or the company in respect of monies due on foot of the overdraft facility, or any attempts made by the bank to obtain judgment for same against the borrower. The letter of 27th February seeks payment from the company of the amount due. Furthermore, it is clear that the terms of the guarantee specifically excludes any requirement or obligation on the part of the bank to take any action or obtain judgment against the company or make any demand of it under clause 9.2 before seeking to invoke the terms of the guarantee. However, in this case, the bank made a demand to the company. (d) The defendants claim that it is unclear whether the plaintiff is pursuing the defendants as guarantors or borrowers because the affidavit of Mr. O’Shea refers to them as borrowers on behalf of Clough Valley Stores Limited. Paragraph 5 in Mr. O’Shea’s first affidavit states “the money claimed is due and owing on foot of the guarantee furnished by the defendants to the plaintiff as security for a facility furnished by the plaintiff to Clough Valley Stores Limited”. I am satisfied that the defendants are clearly sued in these proceedings on foot of the guarantee. (e) It is claimed that para. 1.1 and 2.1 to 2.3 of the guarantee constitute an unconscionable arrangement and are impossible terms and conditions and furthermore, that there was inherent and latent pressure to sign the guarantee placed upon the defendants. They claim that they were given no choice to amend or confirm the terms or conditions at the time of signing. The plaintiff contends that paras. 1.1 and 2 simply provide for the provision of the overdraft facility on condition of the guarantee being entered by the defendants and were in standard form. In addition, it is submitted that the parties were advised to seek independent legal advice prior to the execution of the guarantee which was declined. The defendants signed the guarantee and detailed waivers were furnished in relation to legal advice on the same date. Paragraph 5 of the waiver also confirms that no pressure had been exerted on the defendants at the time of signing. I am not satisfied that the contents of the defendant’s affidavits disclose any possible or credible basis upon which they might base a defence of duress or undue influence or unconscionable behaviour on the part of the bank. There are unsubstantiated assertions which do not provide any basis for an arguable defence. (f) The plaintiff contends that Ulster Bank Limited is not the proper plaintiff in the proceedings. No basis is advanced for this assertion and the plaintiff was the party which offered the overdraft facility and is clearly, on the face of the facility letter, correspondence and the guarantee, the appropriate plaintiff. I am not satisfied that this assertion amounts to an arguable defence to the plaintiff’s claim.
(b) It is claimed that counsel for the plaintiff admitted in the Master’s Court that there was a contest between the parties and that the matter should be sent to the judges list. Paragraph 7 of Mr. O’Shea’s supplemental affidavit is relied upon by the defendants, in which it is stated that the Master of the High Court was informed that a contest existed on the affidavits such that the motion ought to be transferred into the judge’s list under O. 37, r. 6. I am satisfied that this was the appropriate order in the circumstances because the motion was contested by the defendants (see Grace v. Molloy [1927] I.R. 405). The process facilitated the defendants in making their submissions to this Court as to why the matter should be sent for plenary hearing. The defendants did not thereby admit that there was an arguable defence that should or could only be determined by an order sending the matter for plenary hearing. There is no merit in this point. 20. Mr. O’Shea in his second supplemental affidavit sworn 15th January, 2015, states that the notice to cross examine did not comply with the Rules of the Superior Courts as it failed to give the required notice period prior to the hearing of the matter. Furthermore, the plaintiff submits that no conflict of fact existed in relation to any relevant matter in respect of the plaintiff’s claim. The plaintiff contends that the only issues of fact that emerged concerned, firstly, whether letters of demand had been sent and secondly, whether the defendants had seen letters of demand or other relevant documents, namely the overdraft facility letter, the letter of acceptance, the company resolution, or the guarantee. These documents have now been exhibited and bear the signatures of the defendants, which are not contested. However, it is submitted by the defendants that Mr. O’Shea should be put forward for cross examination prior to the determination of this and other unspecified aspects of the case. 21. Order 37, r. 2 is specifically directed towards the hearing of proceedings commenced by summary summons. It provides that:-
22. If there is a failure to attend on receipt of a notice to cross examine, a deponent’s affidavits shall not be used without “special leave” of the court. This term is to be understood in accordance with the decision of the Court of Appeal in Haltson Street Credit Union Ltd v. Raymond Costello & Emberton Finance Ltd [2015] IECA 91, in which the phrase “special leave” in O. 55, r. 36 was held not to elevate the threshold at which the court should grant relief. Irvine J. stated:-
23. I am not satisfied that the original notice to cross examine under O. 37, r. 2 was in proper form or served within a reasonable time such as to justify reliance upon it by the court in excluding the plaintiff from reliance upon the affidavits. Even if I were satisfied that the notice was served within time or was otherwise reasonable, or that service should be deemed good, I am not satisfied that it would be in the interests of justice to make an order depriving the plaintiff of the opportunity to rely upon the affidavits. Apart from the fact that the defendants made no application in relation to the notice to cross examine in the Master’s Court, the notice was clearly regarded as spent in the High Court where on the transfer of the case to the judges list a notice to cross examine under O. 40 was issued and served. In addition, I am also satisfied that there is no issue of fact that is identifiable from the affidavits, the understanding or resolution of which could reasonably give rise to an arguable defence. 24. The additional notice to cross examine issued under O. 40, r. 31 which states:-
25. On the basis of the evidence put forward by the defendants to date, I am not satisfied, leaving aside the issue of whether the summons was served within time or pursuant to the proper procedure, that I should direct Mr. O’Shea’s attendance for the purpose of cross examination and adjourn the motion for that purpose pertaining to the issue on this motion. I am satisfied in this case to permit the plaintiff to rely upon the affidavits submitted and opened to the court. I do not consider that the court would be in any way assisted by the cross examination of Mr. O’Shea in the absence of a relevant conflict of fact. 26. The defendants complain that they are not in a position to formulate a defence because the bank has failed to supply bank statements in respect of the overdrawn account from the date of the opening of the account on 1st October, 2010. The defendant wish to obtain copies of all bank statements for a company called “Bank Check” in order to conduct a review of the entire account. The bank’s solicitors in a letter of 8th April, 2015, indicated that all relevant documentation had been furnished. By letter dated 10th April, the defendants acknowledged that they had received all bank statements in respect of the account from 1st October, 2010 to 14th December, 2012. On 1st October, 2010, the account was overdrawn to the amount of €77,800.66. The letter made an allegation that fraudulent activity had been carried out on the account without any particulars of the alleged fraud. This allegation is not contained in any of the affidavits filed by the defendants. The bank statements sought predate the granting of the overdraft facility and the date of the guarantee. I am not satisfied that the defendants in the affidavits furnished have set out any basis upon which the preparation of the defence is prejudiced, or may be prejudiced, by the absence of bank statements prior to 1st October, 2010. The defendants seek an adjournment until these statements are furnished. I am not satisfied to grant an adjournment for that reason. 27. An order for substituted service was granted to the plaintiff on 13th May, 2013, (Peart J.) on the basis of an affidavit of Liam Fitzgerald. Proceedings were served in accordance with that order to which the defendants now object. The defendants having been so served entered an appearance. The defendants’ unhappiness at the issuing of the order for substituted services is irrelevant to this application. 28. The defendants submit that the proofs in respect of the plaintiff’s claim in the first grounding affidavit of Mr. O’Shea were defective in that a complete true copy of the guarantee was not exhibited. This is so. However, in a supplemental affidavit a full true copy of the guarantee was exhibited and the court is entitled to act upon that evidence: O. 37, r. 1 permits the plaintiff to verify the claim if necessary in a supplementary affidavit (see Masterson v. Scallan [1927] I.R. 453). 29. The defendants contend that it cannot be liable for any further amounts due and owing on the account following the appointment of the receiver on 13th January, 2011, to the debtor company. I am satisfied that the appointment of the receiver and the fact that the company in receivership continued in operation is not relevant to the liability of the defendants pursuant to the terms of the guarantee. The obligations which apply in respect of the guarantee exist as a matter of law. This is not an arguable defence. 30. The defendants are aggrieved that despite the fact that they wrote to Mr. Liam Fitzgerald, Solicitor, and also to Ulster Bank Ireland Ltd attempting to arrange a meeting in relation to issues surrounding the guarantee, they received a reply from the bank’s solicitors requiring a proposal in writing before such a meeting could be scheduled. It stated that the consideration of the proposal would be subject to the Bank obtaining judgment. The Bank, therefore, requested that the defendants consent to judgment at a hearing on 12th December, 2013. This was referred to as blackmail in Ms. Bridget Quinn’s affidavit of 12th December, 2013. The allegation of blackmail is unsubstantiated and amounts to a mere assertion. This matter is irrelevant to the issue on this motion. 31. The defendants allege “an unwitting collusion between Ulster Bank, the receiver and Allied Irish Banks Plc to systematically destroy us maliciously”. This is denied and no evidence of any kind is offered by way of substantiation of the assertion made. It is irrelevant to the issue in this motion. 32. I am mindful of the caution that must be exercised in the granting of summary judgment and of the court’s obligation to look at the entirety of the situation and the facts set out in the affidavits before the court. A number of the averments made by the plaintiffs in relation to the issuing of letters of demand or the suggestion that they never had sight of the original letter of facility have been addressed and were clearly demonstrated to be incorrect. The defendants must have known this at the time of the swearing of the respective affidavits and no explanation has been furnished to the court as to why these incorrect averments were made. There is a complete lack of cogency in the evidence presented by the defendants and the affidavits submitted by them contain many assertions which are unsubstantiated or not particularised. It would appear that the core documents in the case were furnished to and signed by them. What they say in relation to these matters is demonstrably incorrect. I am not satisfied that the defendants demonstrated a fair or reasonable possibility of a real or bona fide defence. The threshold is very low, but I am satisfied that there is no arguable defence other than the series of assertions set out above. I am not satisfied that the defendants have been impeded from stating or mounting a defence by reason of the non-availability of the bank statements prior to 1st October, 2010, or any of the other matters of which they complain. I am not satisfied to grant an adjournment for the purpose of directing Mr. O’Shea to appear for cross examination or, indeed, Mr. Fitzgerald in relation to the order for substituted service for the reasons set out above. 33. In the circumstances, I am satisfied that the plaintiff has adduced the necessary proofs and to grant judgment in the amount claimed. |