Allied Irish Banks PLC v Ahern & Anor (Approved)

Factual and Procedural Background

This case concerns an application for summary judgment by Company A against two defendants, who were formerly married but have since divorced. Company A claims a sum of €387,500.67 arising from credit facilities provided to various accounts connected with the defendants, as well as guarantees signed by them. The defendants oppose summary judgment, asserting arguable defences and requesting that the matter proceed to a plenary hearing.

The defendants challenge the existence and terms of the credit facilities, the statute of limitations regarding one account, and the adequacy of particulars in the plaintiff’s amended summary summons. The second defendant additionally claims lack of consent for certain transfers and alleges unenforceability of guarantees due to absence of independent legal advice.

Company A relies on affidavits from its managers and solicitor, presenting evidence including facility letters, guarantees, demand letters, and account statements. The defendants respond with affidavits contesting acceptance of terms, statute barring, and particulars of claim.

The procedural history includes an order permitting amendment of the special endorsement of claim to comply with a recent Supreme Court decision, and the issuing of an amended summary summons in November 2020.

Legal Issues Presented

1. Whether the defendants accepted the terms of the credit facilities as evidenced by facility letters dated December 2012.
2. Whether the plaintiff’s claim in respect of one account is statute barred due to absence of payments within six years prior to commencement.
3. Whether the particulars provided in the amended summary summons comply with the requirements set out by the Supreme Court in Bank of Ireland v. O’Malley.
4. Whether the guarantees signed by the second defendant are enforceable despite her lack of independent legal advice.
5. Whether the defendants have established an arguable defence sufficient to resist summary judgment and require a plenary hearing.

Arguments of the Parties

Defendants' Arguments

• No evidence exists that the defendants accepted the terms of the December 2012 credit facility letters; contract formation requires offer, acceptance, and consideration.
• The plaintiff has not established the original terms of the credit facilities prior to 2012, nor evidence that the defendants accepted any changes.
• The plaintiff’s claim regarding the 193 account is statute barred, as no payments were made by the defendants within six years before proceedings.
• The particulars in the amended summary summons are inadequate and fail to comply with the Supreme Court’s requirements, lacking breakdowns between principal and interest and explanations for discrepancies.
• The second defendant claims a transfer from a joint account into one account was made without her consent.
• The guarantees signed by the second defendant are unenforceable due to absence of independent legal advice prior to signing.
• Given these grounds, the defendants assert that summary judgment should be refused and the matter remitted to plenary hearing.

Plaintiff's Arguments

• Acceptance of the facility letters was not required as these were rolling extensions of pre-existing credit facilities, evidenced by conduct including payments into the accounts.
• The cause of action accrued upon demand for repayment in 2014 and subsequent failure to repay, which occurred within six years prior to issuance of proceedings, negating the statute barring argument.
• The plaintiff has furnished adequate particulars by reference to detailed account statements regularly provided to the defendants, satisfying the requirements of the Bank of Ireland v. O’Malley decision.
• Interest charges and any changes thereto were clearly identified in the account statements and demand letters.
• The alleged unauthorized transfer from the joint account was made into the first defendant’s account; any claim regarding this is a matter between the defendants and not a defence to the plaintiff’s claim.
• The guarantees contained clear warnings advising the signatories to obtain independent legal advice; lack of such advice is not a defence in Irish law absent evidence of undue influence.
• The defendants have not raised any arguable defence sufficient to resist summary judgment.

Table of Precedents Cited

Court's Reasoning and Analysis

The court applied established legal principles governing summary judgment, emphasizing that defendants must show a fair or reasonable probability of a bona fide defence to resist judgment. The court found that the defendants had not met this threshold.

Regarding acceptance of the facility letters, the court noted that the letters represented a rollover of pre-existing credit facilities. The defendants did not deny receipt of the letters, and their conduct—specifically, adherence to credit limits and payments into the accounts—demonstrated acceptance. Thus, no separate acceptance or signature was required.

On the statute of limitations issue, the court held that credit facilities of this nature are repayable on demand. The plaintiff’s cause of action accrued upon demand for repayment in 2014 and subsequent non-payment, all within six years of proceedings. Account statements confirmed payments within the relevant period, undermining the defendants’ statute barring defence.

Concerning the adequacy of particulars, the court relied on the Supreme Court’s decision in Bank of Ireland v. O’Malley and related authorities. It held that the plaintiff’s reference to detailed bank statements, regularly furnished to the defendants, provided sufficient particulars of the debt, including principal and interest components. Minor discrepancies in interest calculations were reasonably explained by timing differences.

Regarding the guarantees, the court found no substance in the second defendant’s claim that lack of independent legal advice rendered them unenforceable. The guarantees contained clear warnings advising legal advice, and Irish law does not recognize lack of such advice as a defence absent undue influence, which was not evidenced.

The court also rejected the second defendant’s claim that unauthorized transfers from a joint account constituted a defence, reasoning that any such claim is a matter between the defendants and does not affect the plaintiff’s claim.

Holding and Implications

The court GRANTED SUMMARY JUDGMENT in favour of Company A against the defendants, jointly and severally, in the amount of €387,500.67.

The defendants failed to establish an arguable defence sufficient to warrant refusal of summary judgment or referral to a plenary hearing. The decision directly resolves the dispute between the parties without setting new legal precedent. The parties were granted two weeks to make written submissions on the final order, costs, and ancillary matters.