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

Last Updated: 11 October 2017
Article by Charles Waterhouse and Darryl Broderick

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 the Bank summary Judgment, the Judge noted that notwithstanding there was no solicitor present at the signing of the Guarantee, the Defendant had in fact received legal advice which had strongly cautioned the Defendant against entering into any Personal Guarantees, and so found that the Defendant had in fact received advice but chose not to accept it.  The Judge dismissed the defence of unconscionable bargain and noted that the Defendant had not put forward any credible evidence to back up this defence.  In relation to the defence of non est factum the Judge dismissed this as the Guarantee was clear on its face and the Defendant had signed the document. 

In the case at hand the Judge did not address the defences of non est factum, misrepresentation or mistake as he felt that Ms. Geraghty had already proven that there is a possibility of a bona fide defence and so referred the matter to plenary hearing.


This decision  does not mean that Ms Geraghty has succeeded in her defence of  the proceedings but only that the Bank must proceed to a full hearing with witness evidence if it is to attempt to secure judgment against her.  The decision turned on its particular facts and it does not mean that the Courts will accept that Defendants have an arguable defence of “undue influence” or “unconscionable bargain” just because the guarantor is in a relationship with a borrower or director of a company whose debts are guaranteed or is related to them. Whether these defences succeed or not, such arguments are featuring more frequently in these type of summary judgment cases, albeit with varying degrees of success as we see from the Curran case noted above. The main lessons for financial institutions are to make sure the wording of the guarantee is clear, to ensure compliance with all legal formalities associated with the contract and also to ensure that guarantors in certain situations obtain verifiable independent legal advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions