BAILII
British and Irish Legal Information Institute


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 >> M. Kelliher 1998 Ltd v Ashe (Approved) [2025] IEHC 269 (09 May 2025)
URL: http://www.bailii.org/ie/cases/IEHC/2025/2025IEHC269.html
Cite as: [2025] IEHC 269

[New search] [Printable PDF version] [Help]

THE HIGH COURT

[2025] IEHC 269

[Record No. 2018/58S]

BETWEEN

M. KELLIHER 1998 LIMITED

PLAINTIFF

AND

 

JENNIFER ASHE

DEFENDANT

 

Ex Tempore Judgment of Mr. Justice Micheál O'Higgins delivered on 9th day of May 2025

Introduction

1.                  This is an application for summary judgment against the defendant in the sum of €121,550.69 in respect of the defendant's obligations under a personal guarantee given by her to the plaintiff on the 11th October 2016. In 2014, the plaintiff agreed to provide credit facilities to a company called Postbrook Limited. The defendant is a director of that company.

2.                  The defendant admits to signing the guarantee and admits that she did not read the document prior to signing it. However, she says there are several important issues of disputed fact which, if decided in her favour, give rise to a stateable defence. She contends that the facts as described in the affidavit of her husband Michael Ashe, and in her own two affidavits, give rise to the defences of non est factum and/or misrepresentation.

3.                  Arising from the submissions of the parties, it seems to me the four key affidavits for consideration in this motion are as follows:

·         The affidavit of Gerard O'Reilly, branch manager of the plaintiff sworn on the 6th June 2019.

·         The affidavit of Michael Ashe, husband of the defendant, sworn on the 11th October 2019.

·         The first affidavit of the defendant sworn on the 19th March 2019.

·         The second affidavit of the defendant sworn on the 11th October 2019.

4.                  The defendant's affidavits refer to certain technical points of defence which need not trouble us in this application. These relate to the contention that neither the credit application nor the personal guarantee contain any terms in relation to a credit limit; the asserted absence of evidence as to a demand having been made of the principal debtor and that it has defaulted in its obligations; and the asserted absence of any evidence that the principal debtor was outside the 90 day credit term. However, counsel for the defendant made clear that these points were not being pursued in the motion. Rather, the motion was contested on substantive grounds, namely the core disputes of fact and whether they amounted to the defence of non est factum or misrepresentation. Accordingly, we need not concern ourselves with the technical arguments mentioned.

 

Affidavit evidence before the court

5.                  The affidavit of Gerard O'Reilly indicates that he is a branch manager at the plaintiff branch in Naas, County Kildare and he personally dealt with Postbrook Limited and the defendant, Jennifer Ashe. Some time prior to the guarantee being signed in October 2016, he met with Michael Ashe and Ciaran Downey, representatives of Postbrook, at the Naas branch. Also in attendance was Paddy Sugrue, the plaintiff's managing director. Mr. O'Reilly believes this meeting occurred at the beginning of September 2016. Postbrook was an existing customer of the plaintiff, with agreed credit terms in place. He says that during this meeting, Mr. Ashe and Mr. Downey sought agreement for an increased credit limit for Postbrook. However, Mr. Sugrue refused this request unless the proposed extension was backed up by a personal guarantee.

6.                  Mr. O'Reilly says that the defendant's husband, Mr. Ashe, refused to provide any such personal guarantee as he was not a director of Postbrook and was unwilling to guarantee the debts and obligations of the company. In response it was indicated to Mr. Ashe and Mr. Downey that the plaintiff would therefore not grant extended credit facilities to the company.

7.                  Mr. O'Reilly states that near the conclusion of the meeting, Mr. Ashe and Mr. Downey were told that if a director of Postbrook was prepared to give a personal guarantee to the plaintiff, then the extension of credit sought would be given. Importantly, a personal guarantee form was then given to Mr. Ashe and Mr. Downey to take away with them to be signed, should a director willing to agree to provide a guarantee.

8.                  Mr. O'Reilly avers that sometime after the meeting he spoke with Mr. Ashe about the credit extension sought and repeated that the plaintiff would require a personal guarantee. Mr. Ashe responded that he would send the defendant, Ms. Ashe, to visit Mr. O'Reilly to provide the said guarantee. I pause here to note that Mr. Ashe's replying affidavit does not appear to contest or address in anyway the claim made at para. 9 of Mr. O'Reilly's affidavit that, in the conversation with Mr. O'Reilly in the interval between the two meetings, he told Mr. O'Reilly that he would send the defendant to visit him to provide the guarantee and have it signed.

9.                  At all events, Mr. O'Reilly's affidavit continues and describes what he says occurred at the meeting on 11th October 2016. He says that on that date the defendant, Ms. Ashe, visited him at the trade counter of the plaintiff's branch in Naas. The defendant asked for Mr. O'Reilly personally and told him that she was there to sign a personal guarantee for Postbrook. He says he remembers the meeting well as the defendant was in good form and they spoke about an upcoming holiday she was due to take. He told the defendant that she had been sent in to 'sign her life away', to which she responded in a jovial fashion.

10.              Mr. O'Reilly then refers to quite an important detail at para. 12 of his affidavit, where he says that the defendant had brought with her the guarantee form which he and Mr. Sugrue had provided to Mr. Ashe and Mr. Downey at the September meeting. She then proceeded to sign it in front of him and in his presence.

11.              Mr. O'Reilly then says that he signed the guarantee to denote that he had witnessed the defendant's signature of the guarantee. He then took the original document for safe keeping in the plaintiff's files. I note that there is no averment that he gave a copy of the signed original to the defendant.

12.              Then at para. 14, Mr. O'Reilly says that, contrary to what is alleged in para. 5 of Ms. Ashe's affidavit, she knew and fully understood the nature of the document she signed. Furthermore, far from the guarantee being put to her on the spot, he says when the defendant arrived at the branch office she had with her the guarantee which had previously been provided to Mr. Ashe and Mr. Downey. He says the defendant would have had every opportunity to read and consider the document before signing or to enquire about it, had she chosen to do so.

 

Affidavits of Jennifer Ashe

13.              Stripping out the now abandoned technical points of defence, the following are the relevant parts of the affidavits of Ms. Ashe. In her first affidavit, she says at para. 9 that the letter dated the 3rd October 2017 (exhibit D to the grounding affidavit) was never received by her. I will explain the relevance of this later in my judgment.

14.              Earlier at para. 5 of her first affidavit, she says that on the day the guarantee agreement was signed, she attended at the plaintiff's Naas branch and met with the branch manager, Mr. O'Reilly. She says that the company's account had been put on hold, and she made a cheque payable on the account and was asked to sign a document to "get the account back up and running". She says that at no point was she informed that she was signing a guarantee agreement.

15.              This position is elaborated upon in her second affidavit. In the first instance, she was not present at the September meeting. That meeting is addressed in her husband's affidavit.

16.              She says that when she attended at the trade counter on 11th October 2016 and requested to speak with Mr. O'Reilly, she intended to make a cheque payment on the account. She says that no mention was made of signing a personal guarantee and she was simply requested to sign a form to reactivate the company account. She denies that Mr. O'Reilly made any comment to the effect that she was signing her life away.

17.              She states that she did not bring any form with her into the branch, and that she did not have sight of the particular form before signing it.

18.              At para. 8 of her second affidavit, she says that Mr. O'Reilly produced the form and asked her to sign it. At this time, they were discussing trivial matters and chatting in a light-hearted manner. She says that both she and her husband had a good business relationship with Mr. O'Reilly for a number of years and that when he requested that she sign the form to reactivate the account, she trusted that was what it was, and she did not read the document. She says she did not envisage that she would be requested to sign such a significant document in such a casual manner. The whole encounter only took a matter of minutes.

19.              She states that she understood she was signing the form in her capacity as director of the company and not in a personal capacity.

20.              She concludes her affidavit by saying that she was not given a copy of the document, nor did she request one simply because she believed it was an internal document of the plaintiff and basically a mere formality.

 

Affidavit of Michael Ashe

21.              Lastly then we have the affidavit of Mr. Ashe, the defendant's husband. He accepts that a meeting took place between himself and Ciaran Downey of Postbrook Limited and Mr. Sugrue and Mr. O'Reilly of the plaintiff company. He says the meeting occurred sometime in early summer 2016.

22.              Mr. Ashe says that Mr. Downey was present for the introductions and some initial comments, but he left when the formal meeting began. He also says that he was not there at the end of the meeting.

23.              Mr. Ashe avers that the purpose of the meeting was to discuss future forecasts of Postbrook Limited with Mr Sugrue. He says he did not request an extension of the company's credit limit at this meeting. He said this had been discussed in the past and they were informed that such would involve a personal guarantee. He says that both himself and Ms. Ashe declined as they were not prepared to personally guarantee the debts of the company.

24.              He then specifically addresses para. 8 of Mr. O'Reilly's affidavit and avers that he was not provided with a personal guarantee form either at that meeting or at any other meeting with Mr. O'Reilly. Furthermore, he says that as Mr. Downey was not present at the conclusion of the meeting, he could not have been provided with the form at that time either.

25.              As I have said, Mr. Ashe does not appear to have addressed para. 9 of Mr. O'Reilly's affidavit.

 

Applicable legal principles

26.              The parties are in agreement as to the legal principles that apply in an application for summary judgment and these were outlined in the helpful written submissions provided by the parties. The question I have to decide is whether the defendant can show a reasonable probability of having a real or bona fide defence (Aer Rianta Cpt (No. 1) v. Ryanair Ltd [2001] 4 IR 607).

27.              A range of authorities, including the decision of McKechnie J. for the Supreme Court in Harrisrange Ltd. v. Duncan [2003] 4 IR 1, make clear that a mere assertion of a given situation forming the basis of a defence will not be enough to withstand a motion for summary judgment. I also have regard to what was said by Clarke J. (as he then was) in McGrath v. O'Driscoll & Ors. [2007] 1 ILRM 203.

 

Summary of submissions on behalf of the plaintiff

28.              The plaintiff submits that, although there is a conflict of fact as to the precise events that took place at the time the guarantee was signed by the defendant in October 2016, there are a number of key facts that are not in dispute. These may be summarised as follows:

(i)                 The defendant admits that she signed the guarantee document which the plaintiff relies upon;

(ii)              The defendant admits that she signed the guarantee document on the 11th October 2016 at the plaintiff's trade counter in Naas, County Kildare;

(iii)            The defendant admits that the purpose of signing the guarantee document was to get the trade account of Postbrook Limited with the plaintiff "back up and running" (it having been put on hold by the plaintiff);

(iv)             The defendant admits that although she signed the guarantee document she did not read it.

29.              The plaintiff contends that in light of these admitted facts, the conflicts of fact in relation to the background leading up to the execution of the guarantee are not relevant. Instead, the central question is whether the defendant ought to be bound by the guarantee having regard to the circumstances at the time she executed it.

30.              The plaintiff relies upon Ted Castle McCormack & Co. Ltd. v. McCrystal (unreported, High Court, 15th March 1999) wherein Morris J. considered the defence of non est factum in the context of an application for summary judgment. In that judgment, he considered the decision of the House of Lords in Saunders v. Anglia Building Society [1971] AC 1004 and held that a person seeking to raise the defence of non est factum must prove three matters 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.              The parties are agreed that, in relation to the burden of establishing a defence of non est factum, the onus rests upon the party who signed the document and seeks to invoke that defence.

32.              The plaintiff submits that in the present case, the defendant does not identify what document she thought she was signing or what character she thought the document had. In these circumstances, it is submitted that there can be no reasonable basis for her assertion that there was a fundamental difference between what she signed and what she thought she was signing, or that she misunderstood its general character. Leaving aside the disputed matters in Mr. O'Reilly's affidavit, the plaintiff contends that it should be inferred that the defendant was aware that the document pertained to helping Postbrook Limited to get out of financial difficulty by getting its trade account back up and running. Therefore, says the plaintiff, the defendant must have known the general character of the document she was signing and therefore, at the height of her case, she is unable to meet limb b) of the defence for non est factum as set out in the House of Lords decision.

33.              More particularly, the plaintiff submits that the defendant also fails to meet limb c) of the test in circumstances where she admits that she did not read the document, nor does she suggest that she made any attempt to find out what it was or its general effect. On the contrary, by the defendant's own case, she took no care whatsoever in ascertaining such matters before signing the guarantee. The defendant is not entitled to rely upon her own negligence and want of care in seeking to escape the obligations she agreed to under the guarantee.

 

Analysis of the core affidavits

34.              It seems to me the main issue I have to decide is whether any of the points of contest raised by the defendant amount to an arguable defence. The first and main point of defence is the defendant's contention that she did not know what she was signing. The case law on the defence of non est factum encourages courts to take a realistic and somewhat circumspect approach, as one might expect in the context of business people signing documents. Were this matter to go to plenary hearing, it seems to me that the defendant would have to account for the fact that, in signing the document, it is likely that, even if only for a fleeting moment, she would at the very least have glanced at the document. I was provided with a copy of the guarantee in question and it is clear that the document is "top and tailed" with the word guarantee in bold print. The defendant will have to explain why she did not see or heed the words in bold and also explain the circumstances in which a person engaged in business would sign a document pertaining to company business without reading it.

35.              However, the fact that it falls to the defendant to explain these matters and demonstrate why the signed guarantee should not be given effect to, is not determinative of the application before the court. One of the issues I have to decide is whether it would be just in the context of the disputed facts as they now stand to deny the defendant an opportunity of explaining the basis on which she, as she claims, misunderstood the character of the document she signed.

36.              Applications of this nature fall to be considered in accordance with their individual facts. In my view, the following features of the case have particular relevance:

(1)   There is a significant area of dispute as to the background circumstances including the purpose and outcome of the September 2016 meeting:

(a)   Mr. O'Reilly says the purpose of the meeting was to reach agreement on an increased credit line for Postbrook Limited whereas Mr. Ashe says it was to discuss future forecasts of the company.

(b)   Mr. Ashe says the possibility of him and his wife providing a personal guarantee had been discussed previously and declined by them as they were not prepared to guarantee the debts of the company.

(c)   There is a very clear dispute as to whether the personal guarantee form was given to Mr. Ashe at this meeting.

(2)   There is a significant dispute as to the purpose of the defendant's visit to the Naas branch of the plaintiff on the 11th October 2016. The plaintiff says this was to sign the personal guarantee whereas the defendant says she wished to make a cheque payment on the Postbrook account.

(3)   There is also a dispute as to what was said when the guarantee was being signed. The defendant contends that she was asked to sign a form to reactivate the account. She says that this, coupled with the background circumstances, caused her to believe that what she was signing was a company document, not a document creating for the first time a personal liability.

(4)   There is a dispute as to whether the defendant brought the blank personal guarantee to the meeting or whether, as claimed by her, Mr. O'Reilly provided it to her at the trade counter. This detail would be relevant to three issues:

(a)   If the plaintiff's account is accepted, it increases the likelihood that the defendant would have read and understood the document in advance.

(b)   It is also relevant to the disputed question as to whether, at the end of the September meeting, as according to the plaintiff, Mr. Ashe left with the blank form. This is denied by Mr Ashe.

(c)   It is relevant to the general creditability of Mr. O'Reilly's recollection versus that of the defendant.

(5)   Based on the affidavits thus far, it appears to be accepted by the plaintiff that the defendant was not given a copy of the signed guarantee for her own records when leaving the premises in October 2016. On one view, depending on how the evidence shakes out, this may support the defendant's account that it was reasonable for her not to realise the significance of the document she had just signed.

(6)   Accepting as I must, for the purpose of this application, the defendant's averment that she never received the letter dated the 3rd October 2017 (exhibit D to the grounding affidavit of the plaintiff), then she has no case to answer at this juncture for failing to respond to the letter of claim based upon her having signed a guarantee. In other words, had she received the letter and failed to raise a complaint about its contents, that might be considered a creditability hurdle for her to overcome.

(7)   As matters stand, the court has no affidavits or evidence from the other two persons present at the September meeting, namely Paddy Sugrue, the MD of the plaintiff company and Ciaran Downey of Postbook Limited. It is of course possible that these persons may be available to give evidence before the trial judge. However, I attach only limited weight to this factor.

(8)   As matters stand, the court only has limited information concerning the state of the Postbrook account, and the actual reasons for seeking an extension of the line of credit, beyond financial difficulties as asserted by the plaintiff's deponent.

(9)   A matter of particular significance is the extent to which the outcome of the factual disputes surrounding the September meeting informs the context for the October meeting at which the guarantee was signed, and the extent to which key issues pertaining to both meetings are in dispute.

37.              Weighing up these various factors, and taking the defendant's affidavits at their height, I am satisfied on a cumulative basis that the defendant has done enough to show a reasonable probability of having a real or bona fide defence to the plaintiff's claim.

38.              This is not a situation of a defendant putting forward no more than a bare denial of a plaintiff's claim for summary judgment. Nor is it a situation of a defendant putting forward an evidently doomed or preposterous line of defence. Rather, her basic claim is that in the particular circumstances in which she signed the guarantee, viewed in the context of the earlier meeting and the previous dealings of the parties, she misunderstood and/or was misled about the nature and character of the document, and that in the circumstances, she should not be unduly criticised for not reading the document in advance of signing it.

39.              Taking the defendant's version of the facts at their height, it seems to me that a case can be made that the context and outcome of the earlier dealings between the parties, including the September meeting, impacted and shaped how the two protagonists would have approached matters and conducted themselves in October when the agreement was signed.

40.              In other words, I attach considerable importance to the fact that the defendant's proposed defence to the proceedings is more than a bare denial. It seems to me that the defendant has raised sufficient facts on affidavit which, if accepted by the trial court, may give rise to an arguable defence. In these circumstances, I find there is a risk of an injustice were the claim to be determined by way of a summary motion without the opportunity for evidence to be tested and cross examination to take place.

41.              Insofar as the plaintiff relies upon the defendant's carelessness, on her own admission, of not reading the document before signing it, I find that, in the particular circumstances of the case, the issue as to whether negligence is established, and the extent of same, is an issue for trial. While it is certainly a relevant matter that the defendant has admitted as a company director that she did not read the document, that does not in my view dispose of all issues under this heading.

42.              I am satisfied that the defendant has identified a statable line of defence with respect to all three limbs of the test for non est factum as laid down by the House of Lords in Saunders. In that regard I think it is relevant that, again viewing matters through the prism of the defendant's affidavits, the defendant alleges that the purpose of her attendance at the plaintiff's branch office was to pay off a portion of the Postbrook Limited account by way of cheque. She also alleges that the plaintiff's agent, Mr. O'Reilly, represented to her that her signature was required on a form in order to reactivate the account. She claims she was unaware that the form she was being asked to sign was a guarantee and puts forward the positive position that she in fact believed, based on what was said to her, that the form was no more than a pro forma form that was needed to reactivate the account.

 

Conclusion

43.              For the reasons stated, I am of the view that this claim should go to plenary hearing. In the circumstances, I will refuse the plaintiff's application. I will hear the parties on a suggested timeline for pleadings and on the question of costs.

 

 

Micheál O'Higgins

Appearances:

Appearances for the plaintiff: Paul J. Brady B.L. instructed by Ivor Fitzpatrick & Co. Solicitors

For the defendant: Craig Phillips B.L. instructed by Coughlan White & Partners LLP

 

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010