Bank Denied Summary Judgment On Foot Of Ex-Partner's Guarantee For 'Emotionally Transmitted Debt'

Mr. Justice Barrett has referred summary judgment proceedings to plenary hearing in circumstances whereby a bank are seeking to rely on a personal Guarantee entered into by the ex-partner of a man who did not explain to her what she was signing.


Ms. Geraghty was in a romantic relationship with the Third Named Defendant in the proceedings, Mr. James Kearney, who set up his own construction business in 1999. Mr. Kearney suggested that Ms. Geraghty become a 49% shareholder after persuading her to invest the sum of €17,500 in the company, Rostaff Property Development Limited (“the Company”). The romantic relationship ended in November 2013 and Mr. Kearney asked Ms. Geraghty to sign over her shares to his nephew. It transpired that some of the documents executed by her at this time constituted a personal Guarantee to AIB for all monies owed by the Company to the Bank. Ms. Geraghty does not deny that it is her signature on the guarantee documents, however, she states that she did not knowingly sign a personal Guarantee and that she was never made aware by the Bank that she would be held liable for the debt of the Company.

Ms Geraghty's position

Ms. Geraghty has sworn on Affidavit that she will rely on the legal defences of undue influence, unconscionable bargain, non est factum, misrepresentation and mistake. She states that the signing of the Guarantee was an unconscionable bargain and it was one which no sensible person would enter into and furthermore, the document was presented in a way she believed it to be a meaningless document and so there was a clear misrepresentation.

AIB's position

The Bank's position has been set out as “black and white” and that it was clear what was contractually agreed. Mr. Justice Barrett noted on a number of occasions that the threshold for sending summary applications to plenary hearing has been pitched at a notably low level in Aer Rianta C.P.T -v- Ryanair Limited [2001] 4 IR 607 and that no effort was made by AIB to rebut the evidence of Ms. Geraghty save a couple of bald statements that an Appearance was only entered for the purpose of delay and that the Defendants have no bona fide defence.

The facts of this case echo those in Governor and Company of the Bank of Ireland -v- Michael Curran and Maureen Curran [2015] IEHC 819 which related to a Guarantee signed by a 73 year widow who lived alone. The Guarantee in this case was signed in her own home in the presence of a Bank Official. In granting...

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