Court of Appeal: Defendant entitled to plenary hearing of fund’s €3.39 million claim

Court of Appeal: Defendant entitled to plenary hearing of fund’s €3.39 million claim

Killian Flood BL

The Court of Appeal has allowed an appeal brought by a defendant in summary judgment proceedings, stating that she had an arguable defence to the €3.39 million claim.

The monies were sought by the plaintiff on the basis of a guarantee provided by the defendant, but the court held that the plaintiff had failed to prove that there was adequate consideration for the guarantee.

Accordingly, the matter was remitted to plenary hearing. The court also rejected each of the other points raised by the defendant, including that there were discrepancies in the plaintiff’s figures, that the plaintiff did not know what she was signing and that there was mismanagement by the receiver of certain assets.


The defendant, Ms Georgina Appelbe, was the director and shareholder of a company called Algadorn Limited. The defendant’s husband was the other director and shareholder in the company.

The claim for summary judgment related to Ms Appelbe’s personal loans and to a joint guarantee provided for the debts of Algadorn. The guarantee was provided in March 2007. It was claimed by Ms Appelbe that the original facility letter for the company was provided in December 2005. However, the plaintiff relied on a facility letter from July 2007, which post-dated the guarantee. The July 2007 facility was for €4.8 million and required a guarantee as security.

The proceedings were initiated by National Asset Loan Management Limited in 2015 but were subsequently transferred to the plaintiff, OCM Emru Debtco DAC.

The plaintiff sought €327,000 on foot of two loan facilities provided to Ms Appelbe and €3,885,000 in respect of a joint guarantee provided by the defendant and her husband over the liabilities of Algadorn. The defendant’s liability for the personal loans were reduced to €97,920 by the time of the appeal, apparently due to asset sales by a receiver.

In the High Court, the defendant’s submissions focused mainly on the reliability of figures put forward by the plaintiff, with the defendant stating that there were inconsistencies. The plaintiff did not raise any particular issue in oral submissions regarding consideration for the guarantee, though it was raised in an affidavit. The defendant also raised the issue of non est factum.

Ultimately, the trial judge rejected the defendant’s submissions and granted summary judgment to the plaintiff. The court held that the defendant was competent in managing her affairs as a director and shareholder, so it was not credible that she did not know what she was signing. Further, the court held that the calculation of the monies had been accounted for by the receiver and plaintiff under the loans, with the plaintiff not seeking certain interest payments in ease of judgment.

In the appeal, the defendant raised the same issues as in the court below regarding the alleged inconsistencies in the plaintiff’s figures and the issue of non est factum. Additionally, the defendant pointed to eight alleged discrepancies in the plaintiff’s figures which had not been argued in the High Court.

However, the main thrust of the defendant’s appeal lay in an alleged lack of consideration. It was argued that the guarantee was not supported by consideration because the plaintiff was relying on a loan facility that post-dated the guarantee. Accordingly, it was said that the plaintiff had not discharged the onus of proof that valid consideration had been provided under the guarantee.

Court of Appeal

Giving judgment in the case, Mr Justice Seamus Noonan held that the plaintiff had failed to adduce sufficient evidence of consideration and remitted the matter to plenary hearing on that basis. However, the court rejected all other grounds of appeal.

The court began by citing Promontoria (Arrow) Limited v Mallon [2021] IECA 130 and stated that the defendant was not entitled to raise discrepancies that had not been raised before the trial judge. As such, the court only considered one of the alleged inconsistencies, referred to as Error Two.

Under Error Two, the defendant alleged that there was a difficulty with the reduction of the claim under the first loan facility from €154,000 to €32,000. The court noted that this reduction arose from the plaintiff electing to not pursue the defendant for certain monies beyond September 2008. The court stated that the plaintiff was entitled to concede a point raised by the defendant and waive its claim rather to monies rather than pursue them in plenary hearing.

In respect of the non est factum defence, the court agreed that the claim was “unstateable.” The defendant was not a “naïve abroad” and it was not credible that she would not have known what she was signing.

The trial judge was entitled to conclude that the receiver and plaintiff had adequately explained the figures for the debt provided to the court, the court said. The decision in Bank of Ireland Mortgage Bank v. O’Malley 2019 IESC 84 was not applicable because the court was satisfied that proper particulars had been provided.

On the issue of consideration, the court noted that the facility of December 2005 predated the guarantee by 16 months. Accordingly, it seemed that the guarantee could not provide consideration for the December facility. There was also no evidence of the company’s status at the date of the guarantee to show why a guarantee would be sought at that point.

The court considered AIB plc v Maguire [2018] IEHC 561, which endorsed the view that past consideration was not good consideration. Citing McKay & Anor. v National Australia Bank Limited [1998] 1 VR 173, it was stated: “A guarantee given to secure a debt already incurred, but unsupported by any further consideration, will fail for want of valuable consideration.” On the facts of the Maguire case, it was held that the issue of past consideration provided an arguable defence to summary proceedings.

In the present case, the court noted that the plaintiff claimed that the guarantee was provided for the subsequent facility in July 2007 for €4.8 million. However, the court said that there was “no clear evidence to demonstrate that the guarantee was executed in consideration of a facility which did not come in into being until some four months later.” While an inference may be drawn if the guarantee was executed at the same time as the facility, the delay of four months called for an explanation. However, none was provided by the plaintiff, the court said.


The court granted judgment for €97,920 against the defendant under the personal loans and remitted the remaining €3.39 million claim to plenary hearing to determine the discrete issue of consideration.

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