Bank of Ireland Mortgage Bank v Daly (Unapproved) [2022] IECA 88 (06 April 2022)

Bank of Ireland Mortgage Bank v Daly (Unapproved) [2022] IECA 88 (06 April 2022)

It is at least arguable that, in the specific factual circumstances where a guarantor was aware of and relied upon conditions precedent in a loan offer relating to the borrower's creditworthiness, and where those conditions were subsequently removed without notice to the guarantor prior to execution of the guarantee, the Bank owed a duty to disclose such removal. The failure to do so may amount to a defence to liability under the guarantee and associated loan. The High Court erred in holding that the issue of the guarantor's knowledge of the loan offers was irrelevant as a matter of law. The matter should proceed to plenary hearing for determination of the factual and legal issues.

Citation
[2022] IECA 88
Parties
Plaintiff/respondent: Bank of Ireland Mortgage Bank; Defendant/appellant: Ethel Daly (As Legal Personal Representative of the late Marcus John Albert Deceased)
Jurisdiction
Ireland
Judgment Date
06 April 2022
Procedural Posture
Civil Appeal / Appeal From High Court Summary Judgment
Outcome
appeal allowed
Legal Topics
Guarantee Liability, Duty of Disclosure to Guarantor, Summary Judgment, Misrepresentation, Conditions Precedent in Loan Agreements
Banking Law Contract Law Guarantee Law Guarantee Liability Duty of Disclosure to Guarantor Summary Judgment Misrepresentation Conditions Precedent in Loan Agreements

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Parties

Bank of Ireland Mortgage Bank

Plaintiff/respondent

Ethel Daly (As Legal Personal Representative of the late Marcus John Albert Deceased)

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Summary Judgment

Legal Issues

  1. 1 Whether a bank owes a duty to disclose to a guarantor the waiver or removal of conditions precedent in a loan agreement that were known to the guarantor and arguably material to their decision to guarantee.
  2. 2 Whether the failure to notify the guarantor of the removal of such conditions can amount to a defence to liability under the guarantee and associated loan.

Ratio Decidendi

It is at least arguable that, in the specific factual circumstances where a guarantor was aware of and relied upon conditions precedent in a loan offer relating to the borrower's creditworthiness, and where those conditions were subsequently removed without notice to the guarantor prior to execution of the guarantee, the Bank owed a duty to disclose such removal. The failure to do so may amount to a defence to liability under the guarantee and associated loan. The High Court erred in holding that the issue of the guarantor's knowledge of the loan offers was irrelevant as a matter of law. The matter should proceed to plenary hearing for determination of the factual and legal issues.

Court Disposition

appeal allowed

Orders

  • Summary judgment set aside.
  • Matter remitted for plenary hearing.