Coyne liable for €17.8m in loans to bank

A CO Dublin businessman is liable for some €17.8 million to Danske Bank arising from the failure of a building company to repay loans, the Commercial Court has ruled.

Mr Justice Peter Charleton yesterday rejected arguments by Seamus Coyne that the guarantee provided by him over loans to TC Coyne Ltd, a company of which he is a director, is unenforceable.

Given that and other findings, the court said the bank was entitled to judgment for about €17.8 million against Mr Coyne under the guarantee and €30,289 related to a separate overdraft facility, liability for which was not disputed. He adjourned the entry of judgment to next week.

Danske Bank, which took over the business of National Irish Bank, had brought its proceedings against Mr Coyne, Mabestown, the Ward, Co Dublin.

The bank claimed about €8 million was loaned to the company in April 2008 with the terms of the loan offer requiring Mr Coyne to provide a personal guarantee. Other securities for the loan included legal mortgages over development sites in Mullingar and Killucan, Co Westmeath, and the sale proceeds of seven residential units in Dromod, Co Leitrim.

It claimed, under a guarantee of April 9th, 2008, Mr Coyne agreed to be liable for the payment, up to a maximum of €8 million, of all sums due from the company, plus interest.

Mr Justice Charleton also noted the guarantee was entered into against primary liability of the company stretching back some years.

The bank claimed the designation of “National Irish Bank Ltd” as the beneficiary of Mr Coyne’s obligations under the guarantee was a “mistake” and the word “Ltd” should not have been included. That mistake did not mean Mr Coyne was no longer liable for the sums owed by the company, it submitted.

In opposing the bank’s claim, Mr Coyne argued the guarantee was unreliable because it was signed at a disputed time and in disputed circumstances and was expressed to be operative in relation to “National Irish Bank Ltd”. That entity did not exist at the time as “National Irish Bank” was the registered trading name of Danske Bank.

In his judgment, Mr Justice Charleton said the “commendably honest” evidence of Mr Coyne did not establish any case that he did not intend to contract with NIB, the predecessor in title to Danske.

Mr Coyne’s evidence was to the effect he did not know why he signed the guarantee but that evidence did not, and could not, establish that in entering into the guarantee, Mr Coyne intended to contract with an entity different to NIB, the judge said.

He was satisfied the relevant entity was the predecessor in title to Danske Bank

This case involved a situation of a shared or common mistake by both sides, the judge said. In the circumstances, Danske Bank was entitled to judgment.