A judge has ruled that AIB is entitled to €6 million summary judgment orders against a woman over a joint guarantee relating to the purchase of the Ashleaf Shopping Centre and Submarine Bar in Crumlin.
Siobhán Smith was sued on a guarantee dated April 30th 2008 executed by herself and her husband Frank Smith, who died in March 2015, concerning borrowings of €50 million related to the purchase of the shopping centre and Submarine Bar in Crumlin.
Alleged bullying
The guarantee, capped at €6 million, supported borrowings of Mr Smith and the couple's son Gary Smith in relation to the purchase of the Ashleaf Shopping Centre.
Mr Justice Michael Twomey said the nub of Ms Smith's defence was it was misrepresented to her by her husband and son that the guarantee was restricted to two houses in the K Club which she owned, and that there was to be no recourse to her personally.
The terms of the guarantee make clear it is for the sum of €6 million and thus recoverable from her personally, he said.
Ms Smith alleged she signed the guarantee under undue influence of her husband whom she alleged was a “bully”.
Ms Smith had, in a settlement agreement entered into by the couple in November 2013, expressly acknowledged, with the benefit of independent legal advice, the existence of her obligations under the guarantee for €6 million, the judge said.
Spanish property
The agreement provided for the release of the couple from their obligations under the guarantee, and for Mr Smith’s obligations for his personal borrowings to be made limited recourse, in return for their selling properties, including a villa and an apartment in Spain, with a target of achieving €7.6 million for AIB.
After execution of the agreement and after Mr Smith’s death in March, 2015, AIB’s solicitors were in contact with Ms Smith’s side for some three years regarding her compliance with the agreement. Various proposals were made by her and at least one Spanish property owned by her was sold before AIB issued the January 2018 demand which resulted in these proceedings.
It was only then that Ms Smith claimed for the first time the guarantee was procured by the misrepresentation and undue influence of her husband, the judge said. Her explanation for the delay was because it involved her betraying her husband whom she loved.
Even though Ms Smith has filed two “carefully drafted” affidavits, and had the benefit of legal advice in doing that, she had not claimed that, were it not for the alleged misrepresentation and undue influence of her husband, she would not have guaranteed the borrowings of her son and her husband subject to a cap of €6 million, he said.
Without such a claim, and in all the circumstances of this case, including her acknowledgement of the validity of the guarantee five years after its execution with the benefit of independent legal advice, she had not made out a credible defence to enforcement of the guarantee and summary judgment for €6 million, he held.
