Allied Irish Banks plc v McKeown & Anor [2019] IECA 296 (28 November 2019)

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JUDGMENT delivered by Ms. Justice Donnelly on the 28th day of November 2019

1. On the 12th May, 2017, Costello J gave liberty to the plaintiff bank (hereinafter “the

respondent”) to enter judgment against the first defendant in the sum of €1,469,251.43

and against the second defendant in the sum of €1,467,102.96. The sum against the first

defendant represented an award against him personally in the sum of €1,429,166.22 and

an award on a joint and several basis with the second defendant, in the sum of

€40,548.60 (those sums less surcharge interest of €463.39). The sum against the second

defendant was sought in the sum of €1,387,003.82 and €40,000 (those sums less

2. The first and second defendants have appealed against the judgment and order of the

High Court. They will be referred to as the appellants in this judgment. As it has some

relevance to the issues in this appeal, it must be noted that the appellants were legally

represented in the High Court and the Notice of expedited appeal was filed by their

solicitor and settled by counsel. They represented themselves at the hearing of the

3. The appellants carried on the business of professional landlords. They are husband and

wife. They own a portfolio of commercial properties in Cork city. By letter of loan offer

dated the 20th May, 2013, the respondent offered to refinance three facilities of the first

“On demand at the pleasure of the Bank subject to repayment/refinance on

31/12/2013. In the interim interest is to be funded by way of a monthly standing

4. A further letter of loan offer of the same date was made to both appellants and accepted

by them. This related to a loan account and an overdraft facility. This was said to be

repayable “[o]n demand at the pleasure of the Bank subject to repayment/refinance by

5. Security for the facilities included two letters of guarantee from the second appellant for

€1,650,000 and interest and €40,000 and interest in each case. The first guarantee was

held as supporting security facilities 1 and 2 and the second was held as supporting

security for facility 3. The first appellant expressly waived his entitlement to take

independent legal advice prior to signing the letter which he signed and accepted on the

24th May, 2013. The funds were drawn down by way of refinancing i.e. they had

previously been drawn down in respect of the existing facilities. It is and was common

case before the High Court that the facilities were not repaid or refinanced and each of

6. At the High Court, the appellants sought liberty to defend the proceedings and argued

that they had established an arguable ground of defence in respect of: -

(b) The alleged improper motives of the respondent in its dealings with the

appellants and in particular in seeking summary judgment in these

7. The High Court judgment records that “the defendants advanced a variety of other

arguments which were not pursued at the hearing of this case and therefore do not

feature in this judgment.” Despite that statement a number of those grounds were argued

at the oral hearing. In respect of all the issues argued before her, the trial judge rejected

the case made out on behalf of the appellants and gave liberty to enter final judgment as

8. The notice of expedited appeal lists ten grounds of appeal. Grounds 1 to 3 relate to the

interpretation of the loan offer of May 2013. Ground 4 appears to contain an error in

excluding the word “not”. It seems the ground meant to refer to the trial judge erring in

law and in fact in not holding that the respondent demanded repayment of the loan in bad

faith and pursuant to ulterior motives. Ground 5 repeats a claim that the guarantees were

invalid and unenforceable against the second appellant. Ground 6 is a general plea that

the trial judge erred in holding that the appellants did not have a valid defence. Ground 7

is a general plea relating to a valid counterclaim. Ground 8 relates to a stay of execution.

Ground 9 refers to a failure to have regard to the supplemental affidavits of the

appellants. Ground 10 claims that there was a failure of natural justice by not giving the

9. The written legal submissions of the appellants, which were filed by them in person, refer

to 21 issues to be decided at the appeal. Many of these issues were not contained in the

notice of expedited appeal and/or were expressly abandoned at the hearing in the High

10. At the hearing of the appeal, the second appellant, on her own behalf and on behalf of the

first appellant submitted that the High Court had been deceived by the respondent and by

counsel making statements misrepresenting fact. This was explained as a reference by

counsel to over €7,000,000 owed by the appellants to the respondent. On a query from

the bench, this came from a reference in the transcript to that figure. It was abundantly

clear from the transcript (including from its context within italics) that the reference to

€7,000,000 was contained in a quote that counsel for the respondent had clearly read

from another case. It was only after this was pointed out that the appellants withdrew

11. In their written submissions, the appellants raised issues concerning proof of debt (under

a number of separate sub-headings). As stated above, this was not at issue in the High

Court proceedings, was not part of the notice of expedited appeal and is therefore not

correctly before this Court as a ground of appeal. This point will not be considered further

12. The appellants also claimed that the judge was dismissive of their argument regarding the

three zero balance mortgages unlawfully retained as security by the bank in the May 2013

agreements. This was not contained in the notice of expedited appeal nor was this

argument developed any further in the oral or written submissions. There appears to be

no real criticism of the trial judge’s summary of the respondent’s release of security. For

all these reasons this point will not be considered further and is rejected.

13. The appellants complain that the total amount owed was circa €1.5 million but that the

award was for circa €3 million. Apart from the fact that this was not a ground of appeal, it

is clear that this issue is misconceived. The judgment was entered against each appellant

on the basis set out above. Any monies realised by the respondent in executing against

either of the appellants will result in a pro tanto reduction of their respective

14. The appellants, in their written submissions, raised for the first time an issue with the

Central Bank’s Tracker Mortgage Examination. This is not a matter which is relevant to

any issue properly before this Court by way of appeal. This point will not be considered

15. The appellants claim discovery in their written submissions. Discovery was only raised

after judgment was given. It was not (for good reason) before the High Court and is not a

matter properly before this Court. This point will not be considered further and is

16. The appellants claim that at the time proceedings issued, one of the security documents

was in the name of AIB Mortgage Bank. It is not at all surprising this issue was not

argued before the High Court and was not a ground of appeal. In any event, it is not

properly before this Court and the point will not be considered further and is rejected.

17. The appellants made a further claim in relation to the costs of the proceedings and claim

the respondent’s behaviour has exacerbated the costs. This is done without context. In

any event this particular issue as regards costs is not properly before the court at this

18. The appellants claim that there was no proof of drawdown in 2013. This is against a

background where this was a restructuring of loans. This argument was not contained in

the grounds of appeal. Apart from noting that such an argument has already been

described as “a contrived and empty argument devoid of any merit whatsoever” in Bank

of Ireland v Flanagan [2015] IECA 56 this point will not be considered further and is

19. Another new ground advanced in written submissions is, in toto, as follows: “Three

Sustainable Solutions encompassing all loans including the Family Home Tracker

Mortgage were offered by AIB Financial Solutions Group”. It is impossible to understand

the point being advanced here. As there is no context for same, as it was not a ground in

the notice of expedited appeal and as no further explanation was given at oral hearing,

20. The appellants sought to advance on appeal an argument that the respondent had no

locus standi in the proceedings. This related to a claim that the entity named as the

plaintiff in the proceedings “Allied Irish Banks PLC” was not an entity that had sent the

21. Although this point or a similar point had been mentioned in the affidavits of the

appellants before the High Court (although simultaneously contradicted by references to

the plaintiff inter alia, seeking guarantees prior to the agreements of May 2013), it was

not pursued in written or oral submissions before the High Court. Moreover, this ground

did not form part of the notice of expedited appeal. Furthermore, the appellants sought

leave to admit new grounds of appeal on, inter alia “New evidence of the Identity and

Locus Standi of the Plaintiff Allied Irish Banks PLC”. This motion was refused by Order of

22. Under these circumstances this Court is being asked to act as a court of first instance in

respect of this issue. Such a request is occurring where the appellants were legally

represented at the hearing before the High Court. No explanation for the failure to pursue

this application in the High Court is before this Court (the written submissions only refer

to the ground itself but not the reason why it should now be accepted). There is simply no

basis upon which this Court should take the exceptional step of permitting such a ground

to be argued for the first time on appeal. This point is therefore rejected.

23. The appellants raised an issue of natural justice regarding their right to be heard and a

fair hearing. In the written submissions, they simply referred to the right to be heard and

natural and constitutional justice and made reference to another Court of Appeal case by

its record number. This ground of appeal appears to refer to the request by the

appellants’ counsel to reply to counsel for the respondent. At the end of counsel for the

respondent’s reply, the appellants’ counsel stated to the High Court “I will have to

address some of the points [counsel] has made”. This was refused by the trial judge on

the basis that the respondent’s counsel was replying to the submissions made on behalf

of the appellants and he had not gone beyond what had been submitted by counsel for

the appellants. This was entirely in accordance with the appropriate procedure for the

conduct of cases. There was no unfairness and no breach of natural justice. This ground

24. In circumstances where a stay on further execution of the High Court judgment was

placed by order of the President of the Court of Appeal, save to the extent that I will deal

with the issue of the counterclaim below, it is unnecessary to consider the question of a

25. The other matters contained in the notice of expedited appeal are encompassed within

26. No issue was taken by the appellants with the general legal principles concerning

applications for summary judgment upon which the trial judge relied. These are found in

inter alia, in Aer Rianta CPT v. Ryanair Limited [2001] 4 IR 607, Harrisrange Limited v.

Duncan [2003] 4 IR 1 and IBRC v. McCaughey [2014] I.R 749. It is unnecessary to

repeat those well-known principles, save to say summary judgment is only to granted

where it is “very clear” to the court that the defendant has no case and that there are

either no issues to be tried or only issues which are simple and easily determined. It is

insufficient for the defence to merely assert on affidavit an arguable defence. The court

must look at the entirety of the circumstance in deciding whether there is a fair or

reasonable probability of a real or bona fide defence and that any assertions made are

27. It is in the application of the above principles that the appellants submit that the trial

judge erred. They submit that it cannot be said to be very clear that they had no arguable

Issues raised in the High Court and in the Notice of Expedited Appeal

28. The appellants pursued at the oral hearing, the issue of the whether the “on demand

clause” permitted the respondent to make the demand at any time. The two letters of

loan sanction had slightly different terminology in the “on demand clause”. The first

stated that it was “On demand at the pleasure of the Bank subject to

repayment/refinance on 31/12/2013” and the second stated “On demand at the pleasure

29. At the hearing of the appeal, the appellants highlighted the difference between “on” and

“by” in the two letters. They submitted that no one had made a demand on the stated

date or by the stated date. They submitted that these were not simply “on demand

clauses”; the letters they submitted demonstrated an intent to do something else with the

loans. The facilities had been offered “subject to the terms and conditions set out in this

letter and subject to the Bank’s General Terms and Conditions Governing Business

30. At the High Court, it had been argued on behalf of the appellants that the import of the

letters, by particular reference to the word “refinance”, was that a reasonable opportunity

would be given to the appellants to refinance. It was claimed the letters required a

reasonable offer to have been made and none was made. What was a reasonable offer

would be decided at the trial of the action. As the trial judge commented, the implication

of this argument was that the respondent was not at liberty to choose whether or on what

terms to offer to refinance the loans as it had agreed to some unspecified reasonable

31. The trial judge rejected the construction advanced by the appellants at the trial. She did

so in light of the decisions of the High Court in National Asset Management Ltd. v.

McNulty [2013] IEHC 369 and ACC Bank Ltd Plc v Kelly [2011] IEHC 7. The observations

of Clarke J in ACC Bank Ltd Plc v Kelly at para 7.2 are apt when he said: “The ordinary

meaning of a loan being repayable on demand is that a person who gives the loan is

entitled to demand repayment. The terminology used in describing the other repayment

terms is again clear. Those terms only applied where there is no demand. It is by no

means unusual for commercial property lending facility to be payable on demand.”

32. In those cases, the facilities were stated to be repayable on demand “without prejudice”. I

agree with the High Court judge that there is no distinction between a clause which is

“subject to” certain terms or which is “without prejudice” to certain terms.

33. The ordinary meaning of these “on demand” clauses is that the respondent was entitled

to demand repayment. This was at their pleasure subject to repayment/refinancing by or

on the 31st December, 2013. The ordinary meaning of this is that if there had been a

repayment or a refinancing on or before the 31st December, 2013, the demand for

repayment pursuant to either letter of May 2013 could no longer be made. If there had

been repayment, obviously no further demand for repayment would be relevant or

permitted. If there had been a refinancing between the parties then that repayment

34. In those circumstances, the facilities were payable on demand and the respondent was

entitled to call in the loans as and when it did. This ground of appeal is rejected.

35. The appellants sought to defend their case in the High Court on the basis that the

respondent acted for improper motives in its dealing with them and in particular in

seeking judgment in these proceedings. The High Court judgment records the many

issues that the appellants had with the manner in which they were dealt with by the

respondent. These issues were many and varied. Their complaints regarding the

respondent’s release of security are listed at para. 15 of the High Court judgment.

36. The trial judge stated that a considerable part of the appellants’ complaint related to the

treatment of their tracker mortgage in respect of their family home. That facility did not

form part of these proceedings and the trial judge held that the issues that they raised in

relation to that facility do not give rise to a defence to the sums claimed in these

proceedings. In written submissions, the appellants did not advance any specific legal or

factual reason to demonstrate that the trial judge was mistaken in law and in fact in her

determination that the issues that they have raised in relation to that facility do not give

rise to a defence to the sums claimed in these proceedings. In oral submissions, the

appellants sought to advance that negotiations with respect to the house had become

part of the restructuring negotiations. I am satisfied however that as regards the issue

with the family home there is no reason to hold that the trial judge was incorrect in law or

in fact in her determination. No arguable defence to these proceedings has been made

37. At the hearing of this appeal, the appellants submitted in an oblique fashion, that the

respondent bank had wrongly and improperly behaved with respect to calling in these

loans. They submitted that they were not in default with their loans but that they had

been overcharged in respect of the mortgage. Unfortunately, at the hearing of the appeal,

the appellants’ main focus as to improper behaviour was on their misconceived

submission that counsel for the respondent stated that the appellants owed €7,000,000. I

38. The appellants submitted at the hearing that the respondent had dealt with them unfairly

in respect of the restructuring of the loans and the calling in of the loans. This submission

appeared in substance to be directed at their claim in respect of the “on demand” clause

39. In respect of their allegations in the High Court as to improper motives, the trial judge

held that they had made no more than a mere assertion that the respondent bank ought

not to have treated them as it did. She also held that they had not established how the

alleged improper motives of the respondent, even if proven, would amount to a defence

to the claim for summary judgment by the respondent in respect of the on demand

facility that expired on the 31st December 2013. She noted that it was remarkable that,

in the plethora of allegations advanced against the respondent, it is not stated that the

respondent represented that it would not call in the loan in accordance with the terms of

the facility. She held that no case had been made out that the alleged improper motives,

even if established, would provide an answer to the claim to be repaid monies that the

appellants accept they borrowed and have not repaid. The trial judge correctly observed

that questions of security and of the appointment of a receiver over certain assets do not

arise in these proceedings. She held that the appellants had not established a fair or

40. In my view there was no error in law or in fact on the part of the trial judge in respect of

this matter. She correctly identified that the improper motives were made by way of mere

assertions. More fundamentally, she identified that these improper motives, even if

established, did not provide an arguable defence to the respondent’s claim.

41. The second appellant submits that the trial judged wrongfully stated in her judgment that

the second appellant did not swear and affidavit in the proceedings but relied upon the

affidavit of the first appellant. The position was that very late supplemental affidavits

were filed by the appellants. Counsel for the respondent at one point stated: “I’m not

objecting to the Court seeing those supplemental affidavits, I think nothing turns on

them”. Counsel for the appellants did not demur on that. Moreover, he did not open the

second appellant’s affidavit. He only opened the first appellant’s affidavit to refer to a

42. In her judgment, the trial judge dealt with the issue of the guarantee as raised in the

affidavit of the first appellant which purported to deal with the guarantees under which

the second appellant was sued. She dealt with the legal argument put before her. In the

notice of expedited appeal, in their written submissions and at the hearing of the appeal,

the appellants did not point to any particular averment in the affidavit, which was

material to the issue upon which the High Court adjudicated on an arguable defence

arising out of the guarantees. For all these reasons, I am quite satisfied that there is no

material error and no want of natural justice by reason of the misstatement of the

position as regards the swearing of an affidavit by the second appellant.

43. In her judgment, the trial judge rejected the second appellant’s arguments that (a)

because she “refused” to provide any further guarantees, the existing guarantees were

discharged and (b) that the guarantees had been discharged where there were material

changes in the underlying contractual obligations between the respondent and the first

appellant. The trial judge referred to clause 2 of the first guarantee dated the 2nd March,

2009 which was a continuing guarantee. She also cited clause 6(i) which gave the

respondent liberty to determine, enlarge or vary any credit to the first appellant

44. The trial judge accepted that that the guarantee was a continuing one and that it would

include the sums guaranteed up to the amount referred to therein of €1,650,000. Clause

6(i) permitted either the enlargement or the variation of the first appellant’s credit

brought about by the facility of May 2013. She also held that there was no obligation on

the bank to obtain an alternative or fresh or additional guarantee. A failure to do so did

not discharge the existing guarantee. She held similarly in respect of the identical (save

45. I am satisfied that the trial judge did not err in so holding. The interpretation of the

guarantees was very clear as a matter of law and did not provide the arguable defence

contended for by the appellants. For this reason, all points of appeal in respect of the

46. The appellants in their notice of expedited appeal and in their written submissions claimed

that the trial judge erred in finding that they did not have a valid counterclaim. This was

not elucidated further at the hearing. Their first counterclaim related to the alleged

premature or improper calling in of the loans. The second counterclaim referred to alleged

47. The trial judge held that the appellants first counterclaim amounted to no more than a

reassertion of the grounds of defence which she had already rejected. In relying on the

decision of Clarke J. in Moohan v S & R Motors Donegal Ltd. [2008] 3 I.R. 656 in deciding

that she would not put a stay on her judgment. In so deciding, the trial judge made no

error of fact or of law. I therefore reject this point of appeal.

48. In respect of the claim of overcharging, the trial judge identified the amount allegedly

overcharged as €57,857.67 and said that this amounted to an independent claim. The

trial judge could not resolve the factual dispute in relation to this claim. She ruled

however that given the scale of the discrepancy between the debt due by the appellants,

a set off would mean very little. In the exercise of her discretion she declined to put a

49. In their written submissions, the appellants submitted that the trial judge omitted a

second assessment of overcharging on their accounts. It appears that the affidavit of the

first appellant had referred to two reports. One report was by an Eddie Fitzgerald and the

second was by “Cáit”. Mr. Fitzgerald had identified the alleged overcharging. The other

report identified overcharging of circa €52,000 on one facility. This had been included in

the earlier reports. On behalf of the respondent, David Coleman swore a supplemental

affidavit identifying that the height of the overcharging complaint was the figure of

€57,857.67. Neither in their supplemental affidavits nor in the hearing at the High Court,

50. I am satisfied that the trial judge did not err in her identification of the height of the

amount being claimed as overcharged. I am also satisfied that in accordance with the

principles in Moohan, she did not err in declining to put a stay on any part of the

judgments to be entered in favour of the respondent against the appellants.

51. The appellants in written and oral submissions have sought to argue certain grounds that

were not argued in the High Court and/or were not included in the grounds of appeal. The

appellants were legally represented in the High Court. No reason has been advanced as to

why these grounds were not so argued. In all the circumstances, these grounds are not

52. In relation to the grounds of appeal which are properly before this Court, I have

concluded that there was no error of fact or of law on the part of the trial judge. She

53. Accordingly, I dismiss this appeal.

Result: Dismiss appeal

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You are here: BAILII >> Databases >> Irish Court of Appeal >> Allied Irish Banks plc v McKeown & Anor [2019] IECA 296 (28 November 2019) URL: http://www.bailii.org/ie/cases/IECA/2019/2019IECA296.html Cite as: [2019] IECA 296

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