Irish Bank Resolution Corporation Limited (Formerly Anglo Irishbank Corporation Limited) v Jacqueline Dolan
| Jurisdiction | Northern Ireland |
| Neutral Citation | [2014] NIMaster 12 |
| Court | High Court (Northern Ireland) |
| Date | 04 February 2014 |
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Neutral Citation No. [2014] NIMaster 12 Ref:
Judgment: approved by the Court for handing down Delivered: 04/02/2014
(subject to editorial corrections)*
No. 11/105087
IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
QUEEN’S BENCH DIVISION
Between:
IRISH BANK RESOLUTION CORPORATION LIMITED
(FORMERLY ANGLO IRISH BANK CORPORATION LIMITED)
Plaintiff;
AND
JACQUELINE DOLAN
Defendant.
Master McCorry
[1] By writ of summons issued 15 September 2011, the plaintiff claimed from the
defendant the sum of £31,659,571.32 on foot of a guarantee dated 18 November 2008
whereby the defendant guaranteed payment on demand “of all present and future
indebtness and liabilities owed to the plaintiff by Jermon Limited not exceeding
£39,271,000.00 plus interest”. The defendant entered an appearance to that writ on 22
September 2011, and there being no defence served, the plaintiff entered default
judgment on 10 January 2012 in the sum of £31,980,259.17 inclusive of interest. By
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summons issued 26 October 2012 the defendant applied for an order setting aside the
default judgment.
[2] Jermon Limited (“the Company”) was a property development company
incorporated in or about 1998 by the defendant’s husband Peter Dolan with the
purpose of managing investment of surplus profits generated by his pharmacy
business. At that time the defendant worked as a teacher in a secondary school but at
her husband’s request became a director in the company. However, in her affidavit
grounding her application, sworn 12 October 2012, she avers that she was a director
in “name only”, neither attending day to day meetings or taking note of the company
finances beyond what her husband told her. She took a career break from teaching to
become a full time carer for their 4 children, resigning altogether in 2000. Peter
Dolan, with her agreement, focussed on the Company, engaging such professional
assistance as was required. The Company experienced rapid growth in the retail and
office property sectors largely funded by significant bank borrowing but with the
downturn in the property market, and the global banking crisis, it ultimately
experienced “severe working capital pressures”. In August 2009 the plaintiff bank
(“the Bank”) and the company entered into a loan facility agreement, a condition
precedent of the offer of a loan being that the Company enter into an “interest rate
swap agreement” the purpose of which was to hedge or protect against interest rate
fluctuations. Then in November 2009 the defendant was told by Peter Dolan that the
Bank required them to enter into personal guarantees in its favour. At paragraph 12
of her affidavit she states: “I was not at all happy about being required to sign a
personal guarantee, but nevertheless I was persuaded against my better judgment to
do so because Peter told me the Company was under significant financial pressure,
and the loan facility was vital to its ability to continue to trade. At the time I was not
aware of the full extent of the Company’s borrowings, nor was I told, or did I realise,
that the guarantee was actually for a sum of £39 million (no amount is specified at
cl.2.2 (a), albeit it has recently been pointed out to me that the total amount
recoverable from the guarantor is specified over the page at paragraph 2.3).”
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[3] At paragraph 13 of her grounding affidavit the defendant avers:
“I do recall that my husband and I had to go to the offices of C&H Jefferson
solicitors in Belfast to sign the guarantee. It was simply explained to me in the
most general terms that there could be adverse consequences from signing the
guarantee. I was not given any legal advice (or advice separate from my
husband) about the nature and extent of the guarantee and indemnity, nor the
full potential personal liability it might give rise to. Further, I was not asked
whether or not I was familiar with the terms of the underlying loan facility
and of the interest rate swap agreement, which for the avoidance of any
doubt, I was not. I realise that the Agreement does contain an express
acknowledgement above the signatures, but to be candid I simply signed
where I was asked to, below my husband, and our signatures were witnessed.
The period spent in C&H Jefferson’s office was relatively short”.
Ultimately the financial pressures on the Company were such that on the 27 January
2011 it was placed in administration and Her Majesty’s Revenue and Customs issued
a winding up petition. The statement of affairs revealed a net deficit of £100 million.
[4] That is the alleged factual basis for the defendant’s submission that she has a
meritorious defence to the Bank’s claim, primarily based on undue influence, but in
addition to failure by the Bank to advise in the exceptional circumstances of the case.
I will return to these issues in due course, but before that I will consider a further
ground for her application to set aside the default judgment, namely that the Bank
does not have locus standi to pursue the action which ought, she contends, to have
been taken by the National Assets Management Agency (“NAMA”), and therefore
that the default judgment ought to be set aside on the ground that it is irregular.
The first issue: Locus Standi
[5] Before considering the relevant legislation of the Oireachtas (the Irish
Parliament) by which the National Assets Management Agency (“NAMA”) came
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