A CO KILDARE developer’s wife being sued by Ulster Bank for €16.3 million over her personal guarantee for the liabilities of their company has an arguable defence entitling her to a full hearing of the case, a High Court judge has ruled.
Mr Justice Peter Kelly, who earlier queried why anyone “in their right mind” would sign personal guarantees for unlimited liabilities, said Deirdre O’Neill had made out a defence related to whether the bank had an obligation to ensure she had independent legal advice as to the consequences of signing an unlimited guarantee.
He also noted that Ms O’Neill, a mother of three, had undertaken not to dilute her interest in the family home, of which she is the sole owner, at Osberstown Lodge, Osberstown, Naas, Co Kildare, pending the outcome of the proceedings. In those circumstances, and stressing he was only required at this stage to decide if Ms O’Neill had an arguable defence, the judge directed the case go to a full hearing.
Earlier, Mr Justice Kelly had commented on the many cases before the Commercial Court involving people being sued under personal guarantees for the liabilities of limited companies.
He queried why people would go to the trouble of setting up a limited liability company and then, “at the stroke of a pen”, undo that by signing personal guarantees over those liabilities.
Earlier this week, the judge granted a summary judgment for €16.3 million to Ulster Bank against Eugene O’Neill, husband of Ms O’Neill, arising from his personal guarantee of January 2006 for the liabilities of one of his companies, Apex Estates Ltd.
The bank has appointed a receiver to the company over non-payment of loans.
The bank also sought a summary judgment against Ms O’Neill but that was resisted yesterday by her counsel, Rossa Fanning, who argued that his client had not understood the significance of what she was signing, received no legal advice on that and had left all business affairs to her husband.
Had Ms O’Neill understood that signing the guarantee would leave her in such a parlous position, she would not have signed, he said.
Alistair Rutherdale, for the bank, argued that Ms O’Neill was a director of 11 companies with her husband and was an educated person and a qualified nurse. She had signed a large number of documents in her capacity as a company director and there was no allegation of undue influence or misrepresentation, he added.
In an affidavit, Ms O’Neill said she has been a full-time homemaker since 1995 when her first child was born. She had been a director of Apex since 1998 and her husband had added her as “a matter of course” as a director for other companies set up by him on the advice of his accountants.
“I trust my husband and did not consider myself to be his business partner,” she said. She did not ask any questions and relied on her husband’s business acumen.
She said she had never taken independent legal advice about documents she signed on behalf of Apex. She was also never advised by either the bank or her husband to take independent legal advice.
“I would never have willingly taken any steps that would put my family home at risk, particularly as we have three children still at home,” she added.
