The high court 2010 1035 s allied irish banks plc plaintiff



Download 95.34 Kb.
Page1/3
Date conversion27.12.2016
Size95.34 Kb.
  1   2   3

THE HIGH COURT

2010 1035 S

ALLIED IRISH BANKS PLC

PLAINTIFF

V.

LIAM COLLINS

DEFENDANT

DECISION of THE MASTER OF THE HIGH COURT 16th November, 2011

Language is important. A defendant in a case of the types listed in Order 2 of the Rules of the Superior Courts is, apparently, not ipso facto entitled to defend the claim unless the plaintiff says he may. Instead, he must first obtain from the Court “leave to defend” (O. 37, r.10). The phrase is unfortunate and, historically, originated in the procedures of another era. It is peculiarly inappropriate in the present age in which citizens enjoy the full panoply of human rights, including, of course, the right to a fair hearing before the Courts.

The Rules of Court do not specify what the defendant needs to show if he is to succeed in resisting the plaintiff’s application for summary judgment.

Note that any defendant refused “leave to defend” has only one further avenue of redress: an appeal to the Supreme Court. For a litigant in person, a self-representing or “lay” litigant, this is a mountain to climb. To passers by, this does not look like even handed justice.

Quite probably, present day judges who employ the phrase “leave to defend” do not pause to consider the implicit slur on the defendant’s expressed position. The phrase is, unconsciously, disrespectful and patronising. Unfortunately, the context in which the “leave” is granted or refused only serves to confirm a lay litigant’s impression that this is about whether the Court will be patient enough to tolerate his efforts to explain his position. He gets one chance. He is one of perhaps one hundred matters listed before one judge on a Monday morning. Everybody talks fast. The lay litigant must feel cowed to keep his arguments short. That may be his undoing. As recently as 1999, in Bank of Ireland v. Educational Building Society, 1 I.R. 220,the Supreme Court quoted Barry L.J. from an old Irish case Crawford v. Gilmore [1891] 30 LR Ir 238, 245:-

“I am of the opinion that . . . the mere length of time which has been occupied by the argument of this case . . . shows that it does not come within the rule which allows final judgment to be summarily marked on motion.”

In other words, the self-representing litigant’s chances of getting “leave to defend” may depend on the time he takes to make his case (the longer he takes, the better his chances), and if he had lawyers who could spin out the argument, his chances would greatly improve. Or perhaps Barry L.J. was just joking?

Then again, it is perhaps the crowded Monday morning list which is the joke? We need to face up to the disturbing possibility that the lay litigant may not be getting a fair hearing on a Monday morning. We need to disassemble all the features of the process and critically check them for the decay of injustice.

One of the problems is that the Monday morning list is comprised of a mixture of different types of “motions”, so called, some of which are interlocutory and some final. The motions this decision is concerned with are “motions for liberty to enter final judgment”. These are applications by plaintiffs to, in effect, deny the defendant his “leave to defend” and to permit the plaintiff to get and enforce judgment for the amount claimed. Clearly, this is a “trial” for the purposes of the “fair hearing” article (Article 6) of the Human Rights Convention. Lose on a Monday and the defendant has lost the case. This type of motion, therefore, is clearly not an interlocutory application for some temporary order pending a full hearing at some later date.

The upshot is that we have a trial being processed in a Monday list as if it were just another interlocutory application. Plaintiffs often offer hearsay evidence in support of the claim when, according to Order 40(4) affidavits should be confined to such facts as the witness is able of his own knowledge to prove “. . . except on interlocutory motions”. (Indeed, properly structured as a trial, the plaintiff should probably be governed by Order 39, “witnesses at the trial of any action shall be examined viva voce”).

Order 40, rule 1 provides that “upon any motion . . . evidence may be given by affidavit but the Court may order the attendance for cross-examination of the person making such affidavit”. In my experience, the Court will not entertain a lay defendant’s application to cross-examine the plaintiff’s deponent on a Monday morning. Notices to cross-examine are being set aside by the Court as if cross-examination was only an optional luxury instead of a fair hearing entitlement. (See, for example, Order of 30th May, 2011, in AIB plc. v. Sweeney and Another [2010] 2403 S).

In an effort to provide for earlier “trial” dates for cases which are indefensible, the judges have created a fast track procedure which jeopardises some defendants’ right to a fair hearing. This is not a price worth paying just to achieve good productivity figures for the Courts Service.

A RUSH TO JUDGMENT?

It should be borne in mind that the litigation procedures spelt out in the Rules of the Court are not writ in stone. We made them. We can change them. No plaintiff has a Constitutional right to be facilitated with a fast track process such as that now available with the Summary Summons procedure. The classic procedural model, the Plenary hearing (or “evidentiary” hearing as the Americans call it), with full adversarial clash and live testimony, has always been regarded as the fairest trial. It is due process. It is natural justice in action. Modify it and you may unwittingly damage in-built protections serving the interests of justice.

It should be borne in mind that no litigant has an entitlement, as a matter of law, to have his case fast tracked. The origins of today’s summary procedure were in mid 19th century legislation to improve the efficiency and transparency of the bills of exchange mechanism. It was thought that encashability should be underpinned by a procedure for prompt hearing of legal challenges as to validity. In effect a defendant should not be permitted to avoid liability by abusing the litigation process on the strength of an unstateable defence.

Obviously, abuses of process must be corrected. The Superior Courts have inherent powers to do so. The summary judgment option was extended to other classes of action in the post Judicature Act Rules of Court (in Ireland the 1877 Rules) and somewhere along the line, the test operated by the court lost contact with its (abuse of process by the defendant) origins, and sought to focus on the reality of the defendant’s supposed defence: plaintiffs did not have to prove abuse of process, instead, defendants have to prove a stateable defence. This plaintiff friendly bias and the shifting of the burden of proof, although heavily constrained by appeal courts, nevertheless created a considerable practical imbalance between the parties. No plaintiff can complain of injustice if his application for summary judgment is unsuccessful as he can proceed with the case on the standard track. By contrast, the defendant is clearly exposed to injustice if the hearing of the motion is not wholly in accordance with the law and precedents in that regard. Only comparatively recently has the UK recast the procedure to allow a defendant to avail of a similar application to summarily dispose of the plaintiff’s case if there be no real case to answer (see Three Rivers [2001] 2 AER).

It was probably not a good idea to reinforce this one-sided procedure by creating an entirely new class of summons for these actions in the Free State’s 1926 Rules of Court. The new rule included all types of action formerly dealt with by Writ of Summons specially indorsed, and later again a subset of these were given their own summons, the Special Summons, leaving a very limited range of actions (broadly speaking, for “special” or known debts or other clear cut, black and white claims), to be processed under Order 37 . The 1926 Rules provide that a plaintiff must seek summary judgment in such a case. There is no other route (save, of course, plenary hearing by consent). It would appear, logically that no plaintiff should use the Summary Summons unless he is confident of securing summary judgment. If he is not confident he should use the Plenary Summons. (But they don’t, do they?). In short, these plaintiffs are being given special treatment by the legal system, deserved or undeserved, but at what cost?

Under O. 37, plaintiffs’ claims can be processed speedily when the sum involved is already ascertained, and when the plaintiff’s solicitor confirms to the Court that there is no defence to his client’s claim. This latter requirement allows the Court to rely on its own officer’s opinion and mark judgment when a defendant has not disputed the plaintiff’s evidence or advanced any contrary legal argument.

The opinion of the solicitor for the plaintiff, even if he is an officer of the Court, must surely be the most unsafe basis for any Court’s determination. Even without any sworn testimony from the defendant, the plaintiff’s own case may be discovered to be not at all as clear as his solicitor may have thought. If the Court chooses to review the papers and concludes that the solicitor’s opinion is wrong, what is the sanction for the solicitor’s unprofessional opinion? Is there any? If not, how often has an injustice been perpetrated when the Court relied on such an opinion without checking for itself? And what of the possibility of deliberate false certification by a solicitor who, far from misreading the possibility, actually knows that the defendant has a good defence?

What we have is a fast track procedure in which the Court may proceed to enter final judgment because it has the plaintiff’s solicitor’s “letter of comfort” as to the appropriateness of granting summary judgment without a plenary hearing.

See? All of the momentum behind a Motion for Liberty to enter final judgment on a Summary Summons is driving the Court towards a fast track outcome. It is difficult to see how a defendant can switch the speeding train back onto the standard track. Giving a plaintiff the chance to avail of the fast track necessarily involves procedurally shortchanging the defendant, perhaps even to the point of infringing his right to a fair hearing. In short, the question is: can the “trial” which takes place in the Monday list sometimes be so constructed in the plaintiff’s favour as to deprive the defendant of his human rights?

THE MONDAY MOTION: THE DEFENDANT’S PERSPECTIVE

The defendant is served with a Summary Summons by which it appears the Chief Justice requires him to enter an appearance in the Central Office and advising that:



“If you do enter an appearance, due notice of the day and hour of the hearing of this Summons will be delivered at the address for service.”

After he has found out what an “appearance” is (“entering an appearance” does not mean “showing up”!), the defendant dates and signs a pre-printed form and confirms that, “the said Defendant requires delivery of a Statement of Claim”.

He then waits for “delivery of a Statement of Claim” but none arrives. Nor is he given “due notice of the day and hour of the hearing of the Summons”. Instead, he gets a “Notice of Motion” which announces that the plaintiff will apply to the Master of the High Court for “liberty” to “enter final judgment for the amount claimed”.

He may, with some justification, think that this hearing before the Master of the High Court is to be the “hearing” of which he had earlier been advised by the Chief Justice, and he arrives in Court expecting (as any lay person would, in the absence of any indication to the contrary) to be able to give his evidence by word of mouth.

Nowhere in the Notice of Motion does it state that he will not be able to give evidence there and then, but should, instead, prepare, in advance of the hearing, a written (preferably typed) statement of the evidence he would like to give, in the form of a sworn “affidavit” of evidence. So he arrives in Court without this. He starts the day understandably confused. (One defendant recently told me he was afraid that he might end the day in jail).

More confusion follows! He discovers that the Master’s “Court” is not a real court and the case is not going to be “heard” there that day at all. The Master is the High Court case manager, and he will give the motion a hearing date for a Monday some time in the future when the papers are “in order”.

If he is lucky, the Master will suggest to him (the defendant) that he probably should ask for an adjournment to give him time to prepare, swear, stamp, file and deliver a replying affidavit. The Master may even tell him what an affidavit is, and give a broad indication that he (the defendant) should try to set down all the facts he can recall which may be relevant to the case.

On the other hand, the Master may decide that because there is no replying affidavit from the defendant, he (the defendant) has not “contested” the plaintiff’s case, and he (the Master) may give the plaintiff the order he is seeking, so concluding the case (subject to appeal: the Master may tell the defendant of his right of appeal, or he may not) without any hearing either before a judge or at all, even though the defendant is present and would happily tell his story, if given the opportunity.

Some commentators have suggested that the provision in the Rules which permits the Master to transfer the file, as it is, to the Monday list in his discretion (O. 63, r. 7) or in case of difficulty or doubt (O. 37, r. 12) must be used when a defendant appears in person without a replying affidavit. To what end? The defendant will then arrive for the Monday hearing without an affidavit and is even less likely to be given an opportunity to tell his story, or even to adjourn further to file the affidavit he should have filed before.

Even the Master is confused! Should he correct or suggest improvements to a first affidavit submitted by a lay defendant? Should he explore, in open Court, the circumstances deposed to? If he can see the makings of a stateable defence or a counterclaim, should he alert the defendant? Should he “coach” him for the forthcoming hearing in the Monday list? Should he advise the defendant of his rights (i) to seek a strike out if the endorsement of claim is too imprecise, or (ii) if the grounding affidavit is skimpy, to ask that the motion be dismissed for want of evidence, or (iii) of his option to serve a notice to cross-examine the plaintiff’s deponent? In short, can the glaring gaps in the fairness of the procedures for the defendant be considered patched over or closed on the basis that the Master may be considered as the defendant’s tutor in all relevant procedural, evidential and legal aspects of the case? I hardly think the proposition is stateable!

The rationale for Order 37 is in the expectation that most cases will be concluded on the “no contest” basis (a very loose concept, surely, found nowhere else in the Rules!), and that anything with the merest suggestion of dispute as to the facts or law would be transferred to a judge’s list on a Monday.

The yardstick for the judge on a Monday is entirely different. It is not spelt out in the Rules of Court. Case law tells us that it is about whether the defence is stateable. The problem for the lay defendant is whether he has enough information about this basis of assessment to enable him to cogently argue the point. His starting difficulty may be that the affidavit he has submitted may have inadvertently omitted key facts to which he could have testified but which he did not, at the time, appreciate might be critical. A thin affidavit may have been enough to constitute a “contest” and get him on to the Monday list, but it may be altogether too superficial to convince the Monday judge that he has an arguable answer to the claim. There may even be a real danger of the judge profiling defendants and jumping to a conclusion in the interests of expedition, even a conclusion which rejects sworn testimony because it conforms to a pattern seen in other cases and is therefore likely to be untrue? Bizarrely, a plaintiff may patch gaps in his evidence (often on hearsay evidence) on a similar profiling basis invoking the maxim omnia praesumunter rite esse acta.

It is a strangely distorted view of the respective importance to be attached to the plaintiff’s “entitlement” to summary judgment and the defendant’s “right” to a fair hearing to treat both as on a par, or even to treat the former as superior. Yet every Monday, lawyers for the plaintiff place emphasis on the former and the defendant, as litigant in person, is often unable to figure out what he is supposed to say. Let me spell it out. A plaintiff’s access to justice is not constrained in any way just because the case has to be tried on the standard track. Summary judgment is not even a statutory right; it is a fast track at the discretion of the Court. The defendant’s right to a fair hearing, on the other hand, is superior on all counts: it is a trump card.


LEAVE TO DEFEND

Looked at another way, the defendant’s replying affidavit is his completed application form for permission to be allowed to give his evidence in the box in a hearing with examination and cross examination of witnesses. Of course, a lay litigant does not know this. Nor is he likely to know that the test he must satisfy for leave to defend is that his affidavit sets out “a good arguable case”. If the hearing of the motion is to be the only trial the defendant will get, surely he should know the precise test which the Court will apply before it gives final judgment in favour of the plaintiff? Fail the test, as stated above, and the defendant will be held liable for the plaintiff’s claim.

In the course of his judgment in Aer Rianta CPT v. Ryanair Limited [2002] 1 I.L.R.M. 381, 393, Hardiman J. noted that:-

“At the start of the hearing of the present appeal counsel assured us that there was agreement between them that the test set out in the judgment of this Court in First National Commercial Bank plc v. Anglin [1996] 1 I.R. 75 was the correct test to apply. However, it transpired in the course of the argument that counsel were by no means agreed on what this test meant: each advanced an interpretation of it which, if accepted, would dictate a resolution of the present appeal in favour of his own client.”

Judge Hardiman then sought to reconcile the two views by pointing out that the old formula of a “fair and reasonable probability of the defendant having a real or bona fide defence” was “not the same thing as a defence which will probably succeed or even a defence whose success is not improbable”.

The formula employed in the quotation cited above is not lay litigant friendly. Apparently, it is not counsel friendly either. Even judges have difficulty with it. McKechnie J., then in the High Court, observed in Harrisrange Ltd. v. Duncan [2003] 4 I.R. 1, that Hardiman J’s “conclusion was, I think, that leave to defend should be granted unless it was very clear that the defendant had no defence, not even one which could be described as arguable”.

McKechnie J. then went on to explore the test in the following manner:

(i) the power to grant summary judgment should be exercised with discernible caution;


(ii) in deciding upon this issue the court should look at the entirety of the situation and consider the particular facts of each individual case, there being several ways in which this may best be done;

(iii) in so doing the court should assess not only the defendant's response, but also in the context of that response, the cogency of the evidence adduced on behalf of the plaintiff, being mindful at all times of the unavoidable limitations which are inherent on any conflicting affidavit evidence;

(iv) where truly there are no issues or issues of simplicity only or issues easily determinable, then this procedure is suitable for use;

(v) where however, there are issues of fact which, in themselves, are material to success or failure, then their resolution is unsuitable for this procedure;

(vi) where there are issues of law, this summary process may be appropriate but only so if it is clear that fuller argument and greater thought is evidently not required for a better determination of such issues;

(vii) the test to be applied, as now formulated, is whether the defendant has satisfied the court that he has a fair or reasonable probability of having a real or bona fide defence; or as it is sometimes put, ‘is what the defendant says credible?’, which latter phrase I would take as having as against the former an equivalence of both meaning and result;

(viii) this test is not the same as and should be not elevated into a threshold of a defendant having to prove that his defence will probably succeed or that success is not improbable, it being sufficient if there is an arguable defence;

(ix) leave to defend should be granted unless it is very clear that there is no defence;

(x) leave to defend should not be refused only because the court has reason to doubt the bona fides of the defendant or has reason to doubt whether he has a genuine cause of action;


(xi) leave should not be granted where the only relevant averment in the totality of the evidence, is a mere assertion of a given situation which is to form the basis of a defence and finally;

(xii) the overriding determinative factor, bearing in mind the constitutional basis of a person's right of access to justice either to assert or respond to litigation, is the achievement of a just result whether that be liberty to enter judgment or leave to defend, as the case may be.”

Stated simply, it appears that a defendant will not get a “Plenary” hearing unless he has an arguable case. The basis of an argument could be factual or legal, but he will not be prompted by the judge, no matter how complex the underlying legal considerations. Of course, the judge may feel himself duty bound to take his own counsel and, if he spots a possible basis of defence or counterclaim, simply grant leave to defend without explaining why. We lawyers may be in our comfort zone working with these principles, but in all fairness, how is a lay litigant expected either to know of or translate and apply them to his case? For a defendant appearing in person, this is surely a surreal world: he just wants to get into the witness box and give his story.



FACTUAL MATRIX AND LEGAL PRINCIPLES APPLICABLE

A few examples may shed some light on theory and on the practice.

A personal representative sued in respect of a transaction with the testator of which he had no personal knowledge is entitled to have the debt formally proved. Likewise, a guarantor: in one of the earliest cases (still cited, it should be noted, a century later), on an application for summary judgment on a guarantee, Lloyds Banking Co. v. Ogle, 1876 1 ExD. 262 Bramwell B. ruled that:

“The power to sign judgment was, in my opinion, intended to apply to those cases which almost on the admission of the defendant are undefended, and not to cases in which the defendant might reasonably say ‘I do not know if your case is well founded or not, but I require you to prove it’ . . .


In my opinion, it ought to be a general rule that where there is no acknowledgement of the debt by the defendant, or anything else to show that the defence is for mere purpose of delay, in the case of a guarantor or surety like the defendant, he should not be prevented from going to trial.”

Next, take the question of good consideration for the giving of a guarantee in respect of a third party’s debts. In Provincial Bank of Ireland Ltd. v Donnell, C.A. 1933, (Northern Ireland Law Reports) Andrews L.J. held that:



“. . . an agreement by a creditor that he will forbear to sue . . . is a sufficient consideration . . . So also is actual forbearance at the request, express or implied, of the defendant . . . (e.g.) ‘in consideration of your not suing my husband’.

If, apart from agreement, there was in fact, a forbearance to sue there is not a particle of evidence to show, as is necessary, that such forbearance resulted from any request, express or implied, on the part of the defendant.

Could the consideration be made valuable by reference to ‘advances that may hereafter be made’? . . . It is clear that where there is no agreement binding on the plaintiffs to make the advances, and no advances are in fact made, the guarantee must be construed as conditional and the guarantee fails for want of consideration.”

A third example is in the area of undue influence on a wife who signs a guarantee. The following material is extracted from a student textbook on contract law, just the sort of book a lay litigant might be likely to consult. “Case example”: Barclays Bank plc. v. O’Brien [1993] 4 All ER 417:


“Mrs O’Brien could succeed because, as a wife, she was part of a specially protected class of persons under equity, acting as surety for a debt . . . a surety of this type could not be enforced where it had been gained by the presumed undue influence of the principal debtor . . .


The House of Lords took a different view. Lord Browne Wilkinson rejected the special equity theory because this would inevitably have the effect of making lending institutions reluctant to make loans on the security of domestic residences. In any case he felt that the Court of Appeal was extending the scope of actual undue influence to include wives, for which there was no precedent. Instead, the doctrine of notice should be applied:

• the creditor would be put on notice of possible undue influence in situations where on the face of it the transaction was disadvantageous to the wife, and there was a risk that the husband may have committed a legal or equitable wrong in getting his wife to sign

• unless the creditor took reasonable steps to ensure that the surety was entered into with free will and full knowledge then the creditor would be fixed with constructive notice of the undue influence

• constructive notice could be avoided by warning of the risks involved and advising of the need to take independent legal advice at a meeting not attended by the principal . . .

The categories of undue influence have been identified in two groups, with the second itself being divided into two distinct groups:

• Class 1 - actual undue influence - where the person alleging the undue influence must prove it

• Class 2A - presumed undue influence - where, because of the relationship of the parties involved, the courts will presume that undue influence occurred unless the contrary is proven

• Class 2B - relationships of trust and confidence - where there is no automatic presumption of undue influence but it is accepted that the relationship of the parties is one in which undue influence could arise (the most obvious relationship included in this group, because it was expressly excluded from the traditional class of presumed undue influence, but because also of the levels of trust and confidence that might be expected from it, is that of husband and wife).”

And, lastly, a recent written decision of our own High Court. Allied Irish Banks plc. v. Galvin Developments (Killarney) Limited, Souter Enterprises Limited, Jeremiah Galvin, Colm Galvin, Denis Galvin, John Shee and Joseph Hanrahan [2011] IEHC 314. The extracts are all quotations from the judgment of Finlay Geoghegan J. The editing is by myself.


“The documents signed by the Galvin Brothers on 10th September, 2008, are the documents under which AIB now pursues its claim against GDK and the Galvin Brothers. The facts surrounding the signing of the letters of sanction and guarantees in September 2008 demonstrate a regrettable casualness of AIB, GDK and the Galvin Brothers in relation to the execution of documents.

The consistent practice between AIB, South Mall, and the Galvin Brothers demonstrates the willingness and a practice of the parties to execute and accept documents, the Guarantees, which were not intended to be relied upon in accordance with their express terms having regard to other terms implicitly agreed . . . .

I have concluded that, as a matter of probability, the details in the Schedule to the guarantees, including the date, were inserted after their execution by the Galvin Brothers on 10th September, 2008 . . .

It is now agreed by AIB that the copy of the letter of offer dated 4th September, 2008, purporting to have been accepted and signed by the Galvin Brothers enclosed with the letter of 4th March 2009, is not, in fact, the letter of offer which they did sign on 10th September, 2008 . . . There is no clear explanation of how AIB, in March 2009 and thereafter, had on its records a form of letter of sanction with an acceptance page purporting to have been signed by the Galvin Brothers when it is now agreed that the version they signed is different . . .

In the letters of sanction of September 2008 in respect of each facility, there is a heading ‘Repayment’ and differing provisions as to the repayment of both the capital and interest and normal provision for review or refinance by a specified date. Construing those provisions objectively in accordance with the principles set out by the Supreme Court in Analog Devices B.V. v. Zurich Insurance [2005] 1 I.R. 274, in the relevant factual matrix and having regard, in particular, to the purpose of the individual loans expressed in the letters of sanction, in my judgment, there was express agreement by AIB on repayment terms which did not include the loans being repayable on demand . . .


Where, as on the facts herein, the letter of sanction contains an express provision in relation to the rate of interest payable and contains no reference to the possibility of any differing interest rate being applicable in certain circumstances, it appears to me that insofar as the General Terms and Conditions contain a provision for the charging of interest at any rate other than the interest rate expressly set out in the letter of sanction, that it is in conflict with the terms of the letter of sanction and, accordingly, pursuant to clause 1.1.2 of the General Terms does not apply . . .

There was an established practice of AIB, at its South Mall branch prior to 2007, of requiring the Galvin Brothers to execute unrestricted guarantees of the liabilities of GDK (except as to amount) and agreeing in a letter of sanction to GDK to restrict AIB’s recourse under the guarantees to the Galvin Brothers’ interest in specified lands . . .

The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean . . .

It is clear that not every statement or promise made in the course of negotiations for a contract may give rise to a finding that a collateral contract exists. To be so treated, a statement must be intended to have contractual effect, see ‘Chitty on Contracts’, 29th Ed., para. 12-004 and cases referred to therein . . . In his seminal article on collateral contracts, Lord Wedderburn also focused on the element of judicial discretion involved in the process:

‘The frequency with which such ‘collateral contracts’ make their appearance . . . depends upon the extent to which the courts are willing to spell them out of a situation where this is a possible, but not a necessary analysis. Their increasing tendency to favour such a view in cases where justice is promoted by so doing, gives added importance to the ‘collateral contract’.”


The Heads of Terms is a commercial agreement and must be construed objectively in accordance with the principles in Analog Devices B.V.

“The Heads of Terms were not intended to constitute an unconditonal binding agreement between the parties to make available or take the facilities referred to therein. Neither, however, construing them in accordance with their terms in the relevant factual matrix were they intended to be devoid of contractual effect . . .

I have concluded on the facts found herein that there existed a collateral contract in the sense of a prior representation by AIB intended to have contractual effect that it would limit its recourse to the Galvin Brothers to 50% of the drawn debt of agreed facilities. . .

The representation by AIB in the letters of sanction to GDK in relation to the historical facilities that it would restrict recourse pursuant to the personal guarantees from the Galvin brothers to their interest in the lands at Cappagh may similarly be analysed as a statement which induced the Galvin brothers to give unrestricted personal guarantees and upon signature thereof became a collateral contract to the unrestricted contracts of personal guarantees from the Galvin Brothers . . .”




  1   2   3


The database is protected by copyright ©hestories.info 2019
send message

    Main page