Mother (81) liable for judgment on €1m loan guarantee for son's firm

An 81-year-old woman who provided a €1 million guarantee concerning a loan to her son’s fuel distribution business – which later went into receivership – is liable for judgment in that sum, the Court of Appeal has ruled.

The three-judge court upheld a Commercial Court finding that Maureen Curran, from Oldcastle in Co Meath, had made out no arguable defence to Bank of Ireland's claim for summary judgment against her for the €1 million.

Ms Curran, a widow, is the mother of Michael Curran, whose XL Fuels Group in Oldcastle went into receivership when the firm defaulted on loans from BoI.

The bank had brought proceedings seeking judgment against Mr Curran and his mother.

Judgment for €2.2 million was previously entered against Mr Curran who did not defend the application but Mrs Curran maintained she had an arguable defence.

On Wednesday, the Court of Appeal agreed with the Commercial Court she had made out no arguable defence, including on grounds the guarantee was executed under undue influence or was an unconscionable bargain such as entitled her to argue it was unenforceable.

Claim of undue influence

Giving the court's judgment, Ms Justice Mary Irvine noted Mrs Curran was a director of the company, its secretary and received what was described as a "stipend" for her services.

Mrs Curran had signed an acceptance of facilities which the bank agreed in May 2008 to make available to the company, the judge said.

It was not disputed she signed the guarantee in three places and in the presence of two bank officials during an encounter which took place, at her request, in her home.

Her third signature was under a statement written by her which advised she understood the nature of the liability she was undertaking and did not wish to get independent legal advice.

It was accepted the text of that statement was read to her by one of the officials.

The judge said Mrs Curran’s claim of undue influence seemed to be made not against the bank but rather her son, who had an interest in procuring execution of the guarantee.

For that to be a defence, she had to satisfy the court that, were it not for the alleged undue influence of her son, she would not have signed the guarantee and also had to show the bank had actual or constructive notice the guarantee was procured by undue influence.

No evidence

Evidence to support a claim of undue influence by her son or based on the conduct of the bank was “glaringly absent” from Mrs Curran’s affidavits, the judge ruled.

Dismissing the argument for a defence on grounds of unconscionable bargain, the judge said Mrs Curran put forward no evidence to demonstrate she was at serious disadvantage to the bank by reason of poverty, ignorance or otherwise.

Her age had not precluded her carrying out her obligations as company secretary, the judge added.

The judge also ruled there was no arguable defence on the grounds Mrs Curran was unaware she was signing an “open-ended” guarantee for the loans made to the company.