Woman entitled to hearing of fund’s claim for €3.39m judgment

A woman has secured a plenary hearing of a fund’s claim for some €3.39 million judgment against her under a joint guarantee with her husband of a company’s liabilities.

Georgina Appelbe, the Court of Appeal ruled, is entitled to a plenary hearing of the claim by OCM Emru Debtco DAC (OCM) for some €3.39 million judgment under a joint guarantee with her husband, Fergus Appelbe, of liabilities of Algadorn Ltd, of which the couple are directors and shareholders.

OCM is entitled to judgment for a separate sum of €97,920 against Ms Appelbe over amounts due on two facilities of her personal borrowings from Allied Irish Bank, (AIB) it held.

The three judge court on Monday partly allowed an appeal by Ms Appelbe against a High Court decision granting summary judgment of some €3.48 million, plus costs, against her in favour of OCM.

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The fund had taken over the court proceedings initially brought by National Asset Management Ltd, a Nama company, after taking over the various AIB facilities at issue.

Ms Appelbe’s personal borrowings related to two facilities – a 2007 overdraft facility for some €100,000, subject to a review one year later, and a €277,000 loan related to the acquisition of business premises at Ballycurreen Industrial Estate, Cork.

The guarantee part of the case concerned a March 29th, 2007 guarantee under which Ms Appelbe and her husband, a solicitor, with an address at Bandon, Co Cork, guaranteed the liabilities of Algadorn Ltd. OCM claimed some €3.8 million under the guarantee.

Giving the COA judgment, Mr Justice Seamus Noonan said, for summary judgment to be granted, it must appear to the court it is clear a defendant has no defence.

Personal facilities claim

In relation to the claim concerning the personal facilities, Ms Appelbe raised a number of issues, including the €100,000 overdraft appeared to have been used to pay interest payments on other loans due by her husband which she said were not her responsibility.

She also claimed the amount due increased substantially as a result of interest charges being added to it, charges due solely by her husband, for which she bore no responsibility. In relation to the €227,000 loan, she claimed some €115,153 had been credited to that account, apparently related to sales by receivers.

Mr Justice Noonan concluded that sufficient evidence of the claim under the personal borrowings had been adduced and he ruled OCM was to have judgment for some €97,920 under that heading.

In relation to the guarantee claim, he noted Ms Appelbe argued any facility offered by AIB to the company was on foot of a December 2005 letter of sanction for a facility of some €3.36 million, replacing an earlier letter, and this was supported by a letter of guarantee for some €5.6 million from her husband only. She believed no additional funds may have been advanced to the company after the guarantee signed by her in March 2007 but argued, if they were, she was not involved in them.

AIB knew at all times she was a homemaker and housewife and all affairs of the company were looked after by her husband, who is a solicitor, she claimed.

Mr Justice Noonan said he was unable to conclude Ms Appelbe had no defence concerning the guarantee claims. For a guarantee to be valid, it had to be supported by consideration but OCM had adduced no clear evidence to demonstrate the guarantee executed by her on March 29th, 2007 was in consideration of a facility which did not come into being until some four months later for various sums approaching €5 million.

The four month delay “at a minimum, calls for explanation by the plaintiff and, so far, there is none”, he said.

Ms Appelbe is entitled to a plenary hearing on that discrete issue, whether the guarantee executed by her on March 29th, 2007 is supported by valuable consideration, he concluded.