Plain Intelligible Language, Independent Legal Advice and Ex Officio Review of Consumer Guarantees: Commentary on Pepper Finance Corporation (Ireland) DAC v Coleman [2025] IEHC 747

1. Introduction

This commentary examines the High Court judgment of Ms Justice Siobhán Stack in Pepper Finance Corporation (Ireland) DAC v Coleman [2025] IEHC 747, delivered on 18 December 2025. The case arises in the context of post-crash mortgage enforcement and addresses:

the status of a family guarantor as a “consumer” under Council Directive 93/13/EEC (the “Unfair Terms Directive”);
the court’s ex officio duty at the enforcement stage to examine the “fairness” of contract terms, even where judgment has already been obtained; and
the interplay between EU consumer law, the equitable doctrines of undue influence and unconscionable bargain, and traditional abuse of process principles such as the rule in Henderson v Henderson.

At its core, the decision concerns whether a bank (and its assignee, a non-bank loan owner) can obtain possession of land charged by a widowed mother to secure her son and daughter-in-law’s speculative development borrowing, where:

she received no independent legal advice;
the transaction was non-commercial from her point of view; and
there are unresolved concerns about the fairness and transparency of the guarantee and the subsequent charges.

Although the judgment does not finally determine the bank’s right to possession, it lays down important guidance on:

when a non-commercial guarantor will be treated as a “consumer”;
how the “plain intelligible language” qualification in Article 4(2) of the Directive is to be understood where no legal advice was given; and
the scope of the enforcement court’s duty to investigate unfairness notwithstanding earlier proceedings and judgment.

2. Factual and Procedural Background

2.1 The parties and the transactions

Defendant: Anne Coleman, registered owner of certain lands in County Wexford. She is a widow (for some 22 years at the time of the transactions) whose late husband had farmed the lands; by 2008 the lands were being farmed by her son.
Original lender: Bank of Ireland.
Current plaintiff: Pepper Finance Corporation (Ireland) DAC, which acquired Bank of Ireland’s interest in the relevant loans and guarantee and was substituted as plaintiff on 20 January 2025.

In February 2008, Mrs Coleman entered into a written guarantee in favour of Bank of Ireland, guaranteeing loans advanced to her son and daughter-in-law up to €820,000. The loans appear to have been for speculative residential development.

In January 2009, almost 11 months after the guarantee, she executed two deeds of charge over her lands, which:

charged the lands as security for the guaranteed liabilities; and
conferred on the mortgagee (then Bank of Ireland) a right to enter into possession and sell.

The facility letter dated 8 February 2008, which governed the principal loans, was signed by the son and daughter-in-law, not by Mrs Coleman. It is unclear that, as of January 2009, she was under any existing contractual obligation to provide security by way of charges.

Crucially:

Mrs Coleman had no independent legal advice when entering the guarantee or the charges.
At the meeting where she signed the guarantee, she wrote and/or signed a handwritten note stating:
“I understand the nature of the liability incurred and I have no wish to be independently advised by a solicitor. Anne Coleman.”
She alleges that she felt under pressure from her son (the borrower) and from a bank official.
She further alleges that, at the time she signed the charges in January 2009, the bank did not tell her that it had already sought to call in the principal debt in September 2008.

2.2 Previous proceedings and current enforcement

Bank of Ireland had already brought summary proceedings on foot of the guarantee, resulting in judgment being entered in 2011. That judgment concerned only the guarantee, not the later charges.

The present proceedings, initiated by Bank of Ireland and continued by Pepper as assignee, seek an order for possession of the charged lands for the purpose of sale under the 2009 deeds of charge.

At the hearing, Mrs Coleman opposed the grant of an order for possession on a summary basis and sought to have the matter remitted to plenary hearing. Two main lines of defence were advanced:

Undue influence – she claims she signed the guarantee and the charges because of undue influence or coercive control by her son and/or pressure from the bank; and
Unfair Terms in Consumer Contracts – she contends that she is a “consumer” under Directive 93/13/EEC and the 1995 Irish Regulations, that the guarantee and charges are “unfair” terms because she derived no benefit, and that they should not bind her.

3. Summary of the Judgment

3.1 Issues before the court

The High Court had to decide, at this interlocutory stage:

whether the evidence of undue influence was sufficient to justify remitting the matter to plenary hearing;
whether Mrs Coleman was a consumer for the purposes of the Directive;
whether the court was precluded by the rule in Henderson v Henderson from examining the fairness of the guarantee, given the 2011 judgment; and
whether, under the Directive and relevant CJEU and Irish case law, the court was obliged of its own motion to investigate the fairness of the guarantee and the charges before making an order for possession.

3.2 Principal findings and orders

The main conclusions of Stack J can be summarised as follows:

Undue influence: The evidence adduced amounted to bare assertions. Given the seriousness of alleging undue influence and the requirement under Order 19, r. 5(2) to particularise such allegations (dates, circumstances, specifics), the material before the court was insufficient to justify a plenary hearing on that ground alone.
Unconscionable bargain: The circumstances suggest that the guarantee and charges may constitute an unconscionable bargain, particularly given:
- the non-commercial nature of the transaction from Mrs Coleman’s point of view;
- her apparent vulnerability and dependence on her son;
- the absence of independent legal advice; and
- the timing of the charges (after the bank had already sought to call in the debt).
The judge did not decide the issue but held that it was sufficiently arguable to warrant further investigation.
Consumer status: Mrs Coleman is probably a “consumer” for the purposes of the Directive and the 1995 Regulations. She was not borrowing in the course of a trade or business of her own, but simply assisting her son and daughter-in-law.
Article 4(2) – Core terms and “plain intelligible language”: It is at least arguable that a lengthy guarantee written in legal language is not “in plain intelligible language” where a consumer receives no legal advice as to its meaning and effect. If so, the protective exclusion in Article 4(2) would not apply, and even the core terms of the guarantee and charges could be assessed for unfairness.
Ex officio duty to assess fairness: Relying on Article 4(1) and 6(1) of the Directive, Grant v County Registrar for Laois and recent CJEU authority, the court held that it must, of its own motion, examine the fairness of the guarantee and charges at the enforcement stage:
- taking into account all the circumstances surrounding the conclusion of the guarantee and the charges; and
- considering the interdependence of the contracts (facility letter, guarantee, charges).
Henderson v Henderson: The rule is a discretionary tool to prevent abuse of process, not an absolute bar. It does not preclude the court from now performing the fairness assessment required by EU law, particularly as:
- no such assessment appears to have been carried out in 2011; and
- the present proceedings concern the charges (a separate contract) as well as the guarantee.
Directions and next steps: The court did not grant possession at this stage. Instead, it:
- granted liberty to the defendant to file a further affidavit on her means of livelihood and assets at the time of the guarantee, and any other matter relevant to the allegation of an unconscionable bargain;
- granted liberty to both parties to file further affidavit evidence explaining in detail the circumstances in which the guarantee and charges were executed and to exhibit all relevant documentation (including material originally exhibited only in the 2011 summary proceedings); and
- reserved the question of possession pending receipt of this further evidence and further directions.

4. Detailed Analysis

4.1 The consumer status of a non-commercial family guarantor

A key preliminary question is whether Mrs Coleman is a “consumer” under the Directive and the 1995 Regulations. If she is not, the entire consumer unfair-terms regime would be inapplicable.

The Directive defines a consumer as:

any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession.

Stack J holds that it is probable that Mrs Coleman is a consumer:

The loan was advanced to her son and daughter-in-law for speculative development.
She herself did not engage in that business and received no direct commercial benefit.
Her role was confined to providing a guarantee and security over her land in order to assist family members.

The judge expressly distinguishes Allied Irish Banks plc v O’Callaghan [2020] IECA 318, where a defendant claimed to be a consumer in connection with borrowing used to invest in property in Slovakia. In O’Callaghan, the borrower was engaged in property investment for his own benefit; here, the guarantor is not the investor and is, in effect, an accommodating family member.

This distinction is significant. It clarifies that:

a guarantor can be a consumer even if the underlying transaction (a property development loan) is plainly commercial;
the relevant question is whether the guarantor’s participation is in the course of that person’s trade, business or profession; and
family sureties who are not themselves in business will generally qualify as consumers for Directive purposes.

This dovetails with a substantial line of CJEU case law (noted here by way of context) recognising that sureties may be consumers where they act outside any professional or business sphere.

4.2 Undue influence – the need for particulars and the Roche line

Mrs Coleman sought to resist possession on the basis that she entered into the guarantee and the charges under undue influence, principally exerted by her son (and, possibly, pressure from a bank official).

The court emphasised several features:

The transaction was non-commercial from the defendant’s point of view.
Her son appears to have had effective control over the lands, and she may have been financially dependent on him.
She had been a widow for many years, and her son was “the head of the household”.
She received no legal advice, and the bank knew this.

These factors could potentially engage the principles in Ulster Bank v Roche [2012] IEHC 166, [2012] 1 I.R. 765. In Roche, Clarke J (as he then was) stated:

“A regime which places no obligation on a bank to take any steps to ascertain whether, in the presence of circumstances suggesting a non-commercial aspect to a guarantee, the party offering guarantee may not be fully and freely entering into same, gives insufficient protection to potentially vulnerable sureties.”

Roche and allied decisions (including the English Etridge line, though not cited here) place an onus on banks dealing with non-commercial sureties:

to recognise indicators of potential vulnerability and non-commerciality; and
to take steps (typically by requiring truly independent legal advice) to ensure that the guarantee is freely and informedly given.

Stack J accepts that, on the facts, Bank of Ireland was on notice that Mrs Coleman was entering a substantial, non-commercial guarantee without legal advice. However, she distinguishes between:

potential notice of undue influence; and
actual proof of undue influence in this particular case.

The only direct evidence of undue influence is:

“Due to the pressure I was under, I felt I had to sign the documents ... and I feared for the consequences of what might happen if I did not do so ...”

and a further statement that:

“My consent ... was seriously undermined and impaired due to what I now understand is coercive control and/or undue influence.”

These are bare assertions, unparticularised as to:

who said what;
when and in what circumstances;
how exactly her will was overborne.

Under Order 19, rule 5(2) of the Rules of the Superior Courts, serious allegations such as undue influence must be pleaded with adequate particulars. Without factual detail, the court held that there was no sufficient evidential basis to remit the case to plenary hearing on this ground alone.

The judgment thus underscores:

the practical importance of properly particularising undue influence assertions; and
the court’s reluctance to send cases to plenary on the basis of generalised or formulaic averments.

Stack J also refers to Everyday Finance DAC v Flood [2024] IECA 8 to contrast a case in which the bank did obtain written confirmation of independent legal advice. There, the bank was arguably entitled to assume that no undue influence tainted the transaction. Here, by contrast, the bank knew the guarantor had no advice and even required her to sign a note confirming that.

4.3 Unconscionable bargain – an emerging equitable counterweight

While the undue influence case was too weakly pleaded, Stack J turns to the related (but distinct) equitable concept of an unconscionable bargain.

She relies on Re Cox deceased [2023] IEHC 100, where McDonald J approved the following statement of Irish law:

“where one party is at a serious disadvantage by reason of poverty, ignorance and some other factors such as old age, so that unfair advantage may be taken of that party. The court will intervene particularly where a transfer of property is made for no consideration at all or where the consideration represents an undervalue and where the transferee acts without the benefit of independent legal advice.”

McDonald J also approved the formulation by Kitto J in Blomley v Ryan [1956] HCA 81, [1956] C.L.R. 362 at 415:

“whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.”

Applying these principles, the court identifies several potentially relevant factors:

Mrs Coleman was not herself engaged in speculative investment or commercial borrowing; her only role was to expose her land to her son’s debts.
She had no independent legal advice, yet assumed very large liabilities (§22).
She may have been financially and practically dependent on her son, who was farming the land.
The charges were executed in January 2009 – at a time when the financial crisis was well advanced and, as the judge notes, it is “entirely possible that the bank itself was under severe pressure to perfect the security” (§22).
The bank had sought to call in the principal debt as early as September 2008, a fact which Mrs Coleman alleges was not disclosed to her when she signed the charges.
It is not apparent from the facility letter that she was otherwise contractually bound to provide the charges at that time.

Taken together, these factors “trouble” the court and could, depending on further evidence, support a finding that the bank (or its predecessor) took unconscientious advantage of a person at special disadvantage by:

obtaining extensive security from a non-commercial, unadvised guarantor;
at a moment when the borrowers’ position and the bank’s own position were deteriorating; and
without full disclosure that the loan had already been called in.

The court does not conclude that the transaction was unconscionable, but it expressly:

recognises that the facts “potentially” fall within that category; and
grants liberty to the defendant to file a further affidavit on her means, livelihood, and any other facts material to the unconscionable bargain issue (§26).

The significance is twofold:

It signals an increasing willingness of the Irish courts to use equitable doctrines in mortgage/guarantee enforcement cases where vulnerable family sureties are involved.
It aligns domestic equity with the EU-law concept of unfair terms, both of which focus on substantive imbalance and lack of real informed consent.

4.4 The Unfair Terms Directive and ex officio review

4.4.1 Scope of review and interdependence of contracts

The Directive’s core remedial provision (Article 6(1)) requires Member States to ensure that:

“unfair terms used in a contract concluded with a consumer by a seller or supplier shall ... not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.”

Article 4(1) states that the unfair nature of a term is to be assessed:

“taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.” [emphasis added]

Stack J emphasises two elements:

The assessment is contextual: the court must consider all the circumstances and the totality of contractual arrangements at the time of conclusion;
The guarantee and the charges are interdependent: any liability secured by the charges is “dependent” on the defendant being liable under the guarantee, so fairness must be assessed across both instruments, and in light of the underlying facility letter.

This leads to a clear procedural obligation on the court in enforcement proceedings:

to inform itself adequately of the circumstances in which the guarantee and charges were entered into; and
to examine whether any terms (including potentially core terms, see below) are unfair within the meaning of the Directive.

The judge cites Grant v The County Registrar for Laois [2019] IEHC 185 as embodying this duty and notes that Grant anticipated subsequent CJEU judgments—namely:

Unicaja Banco (C‑869/19);
Ibercaja Banco (C‑600/19);
Joined Cases SPV Project 1503 and Banco di Desio e della Brianze and Others (C‑693/19, C‑725/19); and
Impuls Leasing România (C‑831/19).

Those CJEU decisions (as the judge summarises) require national courts, even at the enforcement stage, to:

raise the issue of unfairness of their own motion where necessary for consumer protection; and
undertake such an assessment even if there has been a prior judgment analogous to the Irish order granting liberty to enter judgment, provided no fairness assessment was previously made.

Accordingly, despite the existence of the 2011 judgment on the guarantee, the High Court is obliged to conduct a fairness review now, at the possession/enforcement stage.

4.4.2 Article 4(2): “Core terms” and the role of independent legal advice

Article 4(2) of the Directive states:

“Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, ... in so far as these terms are in plain intelligible language.”

This has generally been interpreted (both in EU and national case law) as providing a limited “safe harbour” for:

terms describing the core subject-matter (e.g. what is being supplied, the essence of the transaction); and
terms relating to price and remuneration (including interest rates),

provided those terms are “plain and intelligible” – a concept which, in recent CJEU jurisprudence such as Kásler and others, includes not only grammatical clarity but also transparency as to economic consequences.

Stack J introduces an important nuance into Irish law: she suggests it is “at least arguable” that a lengthy, technical guarantee cannot be said to be in “plain intelligible language” where:

the document is drafted in legal language; and
the consumer guarantor receives no legal advice explaining its meaning and effect.

Her reasoning is pragmatic:

a layperson cannot realistically be expected to understand complex guarantee/charge documentation unaided;
in such circumstances, it is doubtful that the core terms are truly “plain” or “intelligible” from the consumer’s perspective.

If this view ultimately prevails, it would mean:

Article 4(2)’s exclusion would not be engaged; and
even the main subject matter and price/remuneration terms of guarantees and security documents could be assessed for unfairness where no proper explanation or independent advice was given.

The judgment does not definitively decide the point; it simply holds that the argument is arguable and that, therefore, the court must fully investigate the circumstances before deciding whether Article 4(2) applies.

For lenders and their assignees, this is a potentially far-reaching development: failure to ensure that consumer guarantors are adequately advised may strip core terms of their Article 4(2) protection and expose them to unfairness challenges.

4.4.3 Annex examples, assignment, and non-bank interest rates

Stack J also addresses the Annex to the Directive, which lists examples of clauses that may be regarded as unfair. She notes that paragraph 1(p) – dealing with terms that allow the creditor to assign rights and obligations “where this may serve to reduce the guarantees for the consumer” without the consumer’s agreement – might have been relevant had the loan been assigned before judgment was entered and if the assignment had adversely affected the consumer’s position.

She notes (with reference to Oireachtas research) that borrowers whose loans are sold to non-bank entities often face higher interest rates. However, in this case:

judgment on the guarantee was entered in 2011, before the assignment to Pepper;
since judgment, interest has accrued under the Courts Act, not under variable contractual interest provisions; and
there is no evidence that the assignment to Pepper increased the interest rate or altered the manner in which interest is calculated.

Accordingly, the potential unfairness arising from non-bank assignment and rate increases – an increasingly prominent legislative and public policy concern – does not arise squarely on the facts of this case.

4.5 Henderson v Henderson and the primacy of EU consumer protection

The plaintiff argued that because judgment had been entered in 2011 on foot of the guarantee, the defendant was precluded from now raising arguments about the fairness of that guarantee under the rule in Henderson v Henderson (1843) 3 Hare 100.

That rule, in modern Irish and English law, is understood as a facet of the court’s inherent power to prevent abuse of process by preventing the fragmentation of litigation and re-litigation of matters that ought to have been raised earlier.

Stack J rejects the application of this rule in the current context for two main reasons:

Nature of the rule: It is best understood as a discretionary tool to prevent abuse of process, not a rigid rule of law. It must yield where its application would be inconsistent with other legal obligations.
EU law obligations: Under the Directive and the CJEU case law cited, the court is required to examine the fairness of the terms of its own motion at the enforcement stage, even if there has been an earlier judgment that did not address fairness.
- The earlier summary proceedings focused on the guarantee, not the charges now being enforced.
- There is no indication that the 2011 judgment involved any assessment of fairness under the Directive.
- EU law (as interpreted in Unicaja Banco, Ibercaja Banco, SPV Project 1503 etc.) requires that the consumer protection inquiry take place at least once, and, if it did not occur earlier, then at the enforcement stage.

Furthermore, the current proceedings are based on the charges, executed nearly a year after the guarantee. Even if the 2011 judgment precluded re-opening issues directly concerning the guarantee, it could not have resolved issues relating to:

the fairness of the charges themselves;
the circumstances in which they were procured; or
the alleged non-disclosure that the bank had already called in the loan at the time the charges were executed.

The judgment thus stands as a clear statement that:

domestic procedural doctrines such as Henderson v Henderson cannot be deployed to circumvent the court’s ex officio obligations under EU consumer law; and
the enforcement court must conduct a real and substantive fairness assessment under the Directive, at least once in the life of the dispute.

5. Precedents Cited and Their Role

5.1 Ulster Bank v Roche [2012] IEHC 166, [2012] 1 I.R. 765

Roche concerned a wife’s guarantee of her husband’s business debts and recognised the need for banks to take steps where a guarantee has a non-commercial aspect and might involve undue influence. Stack J uses Roche as:

a benchmark for non-commercial guarantees given by family members; and
authority for the idea that a bank cannot simply ignore warning signs of vulnerability or dependence.

However, she distinguishes the present case in that she finds insufficient of actual undue influence (in contrast to the strong evidence in Roche, which even included expert psychological evidence of coercive control).

5.2 Everyday Finance DAC v Flood [2024] IECA 8

Everyday Finance v Flood concerned a situation where the bank had obtained written confirmation that the guarantor had received independent legal advice. Stack J relies on this to show the contrast: where such confirmation exists, a bank is less likely to be fixed with notice of undue influence; where it does not (and especially where the bank positively solicits a “no legal advice” acknowledgement), the bank is in a much more precarious position.

5.3 Re Cox deceased [2023] IEHC 100 and Blomley v Ryan [1956] HCA 81

These authorities supply the modern Irish test for an unconscionable bargain:

a party at serious disadvantage (e.g. poverty, ignorance, vulnerability, lack of advice); and
the other party unconscientiously taking advantage of that disadvantage.

Stack J employs them to highlight the possibility that this case may fall within that category, given:

the non-commercial context;
the absence of consideration moving directly to Mrs Coleman;
the lack of independent advice; and
the timing and circumstances of the charges.

5.4 Allied Irish Banks plc v O’Callaghan [2020] IECA 318

This case is used to delineate the boundary of “consumer” status. The Court of Appeal found that a borrower investing in property abroad for his own account was not acting as a consumer. Stack J contrasts this situation with that of Mrs Coleman, whose participation is purely to support family and not for any trade, business or professional purpose of her own.

5.5 Grant v The County Registrar for Laois [2019] IEHC 185

Grant is cited as presaging the CJEU’s insistence on ex officio unfairness review. It stands for the proposition that an Irish court must take reasonable steps to inform itself of the relevant circumstances and to examine fairness under the Directive, even at the stage of enforcing a security. Stack J explicitly follows this reasoning.

5.6 Recent CJEU case law: Unicaja Banco, Ibercaja Banco, SPV Project 1503, Banco di Desio, Impuls Leasing România

Although not analysed in depth, these cases are invoked collectively for this core principle:

where earlier proceedings (or orders equivalent to liberty to enter judgment) did not involve a fairness assessment under the Directive, the national court is still obliged to carry out such an assessment at the enforcement stage.

This European jurisprudence underpins Stack J’s conclusion that:

the existence of the 2011 judgment on the guarantee does not relieve the court of its duty to scrutinise the fairness of the guarantee and charges now; and
domestic doctrines such as Henderson v Henderson must be applied in a manner compatible with that duty.

6. Simplifying Key Legal Concepts

6.1 Undue influence

Undue influence is where one person’s will is overborne by the influence of another, so that the resulting transaction is not the product of a free and independent decision. It is especially relevant in:

family situations (e.g. parent–child, spouses);
relationships of trust and confidence; or
where one party is much more sophisticated or powerful than the other.

If proven, undue influence can render a guarantee or charge voidable at the instance of the influenced party. Banks may be affected indirectly if they either:

participated in the undue influence; or
took security with actual or constructive notice of the possibility of undue influence (e.g. non-commercial guarantee, vulnerability, no legal advice).

6.2 Unconscionable bargain

An unconscionable bargain is a separate equitable doctrine. It applies where:

one party suffers from a “special disadvantage” (e.g. poverty, ignorance, inexperience, dependency, lack of advice); and
the other party knowingly and unconscientiously exploits that weakness to obtain a transaction that is oppressive or significantly one-sided.

It does not necessarily require overt pressure or threats (as undue influence might); rather, it focuses on exploitation of vulnerability. Relief may include setting aside the transaction, varying its terms, or refusing to enforce it.

6.3 The concept of “consumer”

Under Directive 93/13, a consumer is someone acting outside their trade, business or profession. Key points in this context:

A person can be a consumer even when guaranteeing a commercial loan, if they are not themselves in business.
Family members who guarantee debts of relatives as an act of accommodation (and not in pursuit of their own business) are typically consumers.

6.4 Unfair terms and “core terms” (Article 4)

The Directive allows courts to strike down “unfair” terms in consumer contracts. A term is “unfair” if:

contrary to the requirement of good faith; and
it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.

Article 4(2) carves out “core terms” (subject-matter, price, remuneration) from unfairness review, but only if they are in “plain intelligible language”. If not, even core terms can be examined for unfairness.

6.5 Ex officio review

“Ex officio” means “of its own motion”. The CJEU has consistently held that national courts must:

raise and examine the unfairness of contract terms in consumer contracts on their own initiative;
even if the consumer does not plead it explicitly; and
at any stage where they are called upon to apply those terms (including at enforcement).

6.6 The rule in Henderson v Henderson

This is a principle of procedural fairness: parties should bring forward their whole case in one set of proceedings. They should not seek to re-litigate issues that could and should have been raised earlier.

However, it is:

a discretionary rule aimed at preventing abuse of process; and
subject to overriding legal obligations, including EU law obligations to protect consumers.

6.7 Summary possession proceedings vs plenary hearing

In Ireland, possession proceedings based on a mortgage or charge are often brought by way of summary procedure. A defendant resisting summary relief must generally show a bona fide arguable defence. If they do, the matter can be remitted to plenary hearing, where oral evidence and cross-examination are available.

Bare, unparticularised assertions of serious misconduct (like undue influence) will not usually suffice to secure remittal. However, where EU consumer law obligations or equity require further factual investigation, the court can and will direct additional affidavit evidence and, if necessary, a plenary hearing.

7. Likely Impact and Future Directions

7.1 For lenders and loan purchasers

The decision sends several clear messages to banks and non-bank loan purchasers:

Non-commercial guarantors are likely to be “consumers”:
- Where a parent or other relative guarantees business debts purely to assist a family member and not for their own trade or business, the Directive will probably apply.
Independent legal advice is central:
- Failure to ensure a guarantor has independent legal advice may:
- (a) weaken the lender’s position against allegations of undue influence or unconscionability; and
- (b) undermine the argument that the guarantee/charge is drafted in “plain intelligible language” for Article 4(2) purposes.
Ex officio fairness review cannot be avoided:
- The court is obliged to examine fairness even at enforcement stage, and even if a prior judgment exists.
- Lenders cannot rely solely on earlier judgments or procedural doctrines like Henderson v Henderson to avoid scrutiny of contract terms.
Assignment to non-banks is not risk-free:
- While assignment per se was not problematic on the facts, the judgment highlights the potential relevance of Annex 1(p) concerning assignments that worsen the consumer’s position.
- Loan purchasers should be aware that terms on assignment, interest variation, and rate-setting may come under EU-law scrutiny.

7.2 For consumer guarantors and their advisers

The judgment provides important strategic guidance for defending enforcement proceedings:

Raise consumer law arguments explicitly:
- Identify consumer status and invoke the Directive and the 1995 Regulations.
- Scrutinise whether the core terms were genuinely “plain and intelligible” to the guarantor at the time, especially if no advice was given.
Develop evidence of vulnerability and circumstances:
- Provide detailed affidavits on personal circumstances, dependency relationships, understanding (or misunderstanding) of the transaction, and any assurances or representations by bank officers.
- This will support both unfair terms arguments and equitable claims (undue influence, unconscionable bargain).
Do not assume earlier judgments are fatal:
- Even if judgment has been obtained in earlier summary proceedings, the enforcement court may still be required to review fairness under EU law.

7.3 For the courts and legal doctrine

Doctrinally, the case contributes to three important trends:

Integration of equity and EU consumer law:
- Equitable concepts (unconscionable bargain, undue influence) and Directive-based unfair terms analysis are increasingly working in parallel to protect vulnerable parties.
Functional approach to “plain intelligible language”:
- The emphasis shifts from purely textual clarity to whether a consumer would reasonably understand the contract in the absence of legal advice.
Re-calibration of procedural finality:
- Domestic doctrines of res judicata and abuse of process must be applied flexibly to ensure compliance with EU consumer protection duties.

Further appellate guidance is likely to be needed on the critical question of whether the absence of independent legal advice necessarily means that a guarantee or charge is not in “plain intelligible language” for Article 4(2) purposes, or whether this is merely one factor among many.

8. Conclusion: The Significance of Pepper Finance v Coleman

Pepper Finance v Coleman is an interim decision, but it is doctrinally rich. Its key contributions can be distilled as follows:

It affirms that a family guarantor, who is not herself trading or investing, is to be treated as a consumer under Directive 93/13.
It articulates an important—and potentially far-reaching—view that a complex guarantee or charge may not be in “plain intelligible language” for Directive purposes where the consumer receives no independent legal advice, thereby opening even core terms to unfairness review.
It confirms the ex officio duty of Irish courts, in line with CJEU case law, to examine the fairness of contractual terms at the enforcement stage, even if earlier proceedings did not do so and even in the face of Henderson v Henderson-type arguments.
It revives and integrates the equitable doctrine of unconscionable bargain into the modern mortgage enforcement context, especially in relation to vulnerable family sureties.

The judgment does not yet resolve whether the guarantee and charges will ultimately be enforced; that will depend on the further evidence now directed. But the principles it articulates will influence how lenders structure and document guarantees, how assignees assess their enforcement risk, and how courts handle possession proceedings involving consumer guarantors.

In sum, Pepper Finance v Coleman marks a significant step in aligning Irish mortgage enforcement practice with the protective ethos of EU consumer law and the enduring values of equity, ensuring that non-commercial guarantors are not bound by obligations they never truly understood or freely accepted.

Plain Intelligible Language, Independent Legal Advice and Ex Officio Review of Consumer Guarantees: Commentary on Pepper Finance v Coleman [2025] IEHC 747