National Asset Loan Management Ltd v Downes & Ors (Approved)

��������� These appeals relate to loans and associated security transferred by Allied Irish Banks plc (AIB) to National Asset Loan Management Ltd (NALM) under provisions of the National Asset Management Agency Act 2009 (the 2009 Act) in late 2010. In 2011 and 2012 NALM sued Seamus Downes and connected borrowers and guarantors for amounts claimed to be outstanding on loan and guarantee commitments to AIB. Seamus Downes contested liability� in two actions which were heard together in the Commercial Court.

��������� The learned High Court judge decided that the evidence was insufficient to establish that AIB or NALM acted towards Seamus Downes� in a manner which estopped recovery on foot of the 2003 guarantee or the calling in of the Castletroy loan. I agree that the evidence did not establish any tenable basis on which Seamus Downes could rely on an estoppel defence. I am not persuaded that there is anything which would justify us in upsetting these conclusions.

��������� On 5 August 2010 AIB made an offer in a facility letter to MKI to continue� loan facilities with a review date for all facilities of 1 September 2010. This required three guarantees from Seamus Downes, Denis McMahon and Paul O�Brien for the obligations of MKI for �7,944,386.68 each. A further facility offer was made to MKI in a letter dated 22 October 2010 in similar terms. This time the review date was 1 March 2011 and the guarantee sought from Seamus Downes was for �6,671,533.06. AIB sought guarantees for �7,893,541.68 from each of the others.

��������� An Issue arose as to whether MKI had accepted the facility letter of 22 October 2010 and whether AIB had continued the MKI overdraft permission and other loans on that basis. The banking facilities of MKI were not withdrawn or treated as being in default and were continued by AIB. The learned High Court judge decided that it was not necessary for him to resolve the issue of whether any MKI banking facilities with AIB were extended under the 2010 facility letter.

��������� I agree. There was no point in time at which MKI ceased to owe AIB� the borrowings secured by the 2003 guarantee. Even if there had been a momentary satisfaction of all liabilities of MKI as a result of roll-over of AIB loan facilities to MKI at the end of 2010, this matter was covered by clause 2 of the 2003 guarantee which provides as follows: