The case referred to in this article should bust a few myths.
First, if anyone thinks you can't get judgment quickly think again. This case started 10 weeks ago on 13 February and summary judgment has been given already. It was admitted into the Commercial Court on 26 February. Between 13 February and 13 April four affidavits were sworn, two from each side. The case was heard on 24 April and apparently judgment was given that day. Nobody could argue with the efficiency of that. So if you have a claim in excess of €1,000,000 for which you say there is no defence then you ought to avail of the strict case management procedures available in the Commercial Court. But you knew that anyway.
Second, the Courts in this jurisdiction treat every adult as having the capacity to contract and will bind them to the terms of their bargain regardless of age, gender or commercial experience. That is so unless there is clear evidence of an incapacity. But there is no assumption of undue influence in marriage nor has there been for decades.
Third, as if the perils of the personal guarantee were not know to us all by now, here is yet another example of a personal guarantee being pursued to the full. What is striking though is the sheer number of cases relating to personal guarantees coming before the Courts at the moment. As a result the legal issues and jurisprudence are being advanced which, from an academic point of view (if not for the poor guarantor), is very interesting.
There are several reasons for this. The pillar banks have sat on the personal guarantees taken towards the end of the boom and beginning of the bust. Many of those are approaching the date by which they must be enforced because of the Statute of Limitations. Ordinarily the bank has six years from the date of loan default by the primary obligor to issue proceedings. But that is extended to 12 years where the original loan was supported by a mortgage or charge over real property.
Many vulture funds have bought loans and associated personal guarantees where the primary obligor can't repay and where there either is no security or there is a problem with security. These personal guarantees were the "bottom of the barrel" buys and the vultures spent the last few years focusing on well secured loans before turning to pursue personal guarantees.
The reason they are bottom of the barrel is because (notwithstanding the ease of passage of this case) they can be difficult to enforce. There is good reason for that. In many cases the personal guarantor does not get much for putting so much on the line. So the Courts very closely scrutinise the guarantee to ensure the lender has complied with numerous onerous obligations before it can enforce. The bank has to get everything right every time.
At Leman Solicitors we act for borrowers and personal guarantors who are being pursued by lenders. We believe that everyone including borrowers should have access to expert legal advice. If you've given a personal guarantee and are concerned about the possible legal implications for you then contact us.
AIB has secured a €6m judgment against Siobhan Smith, widow of the late businessman Frank Smith.