Woman claims she signed pub purchase overdraft agreement under undue influence

A woman who claimed she signed an overdraft agreement in relation to the purchase of a pub with her late husband, under undue influence, is entitled to a full hearing of a fund's claim for judgment against her of around €1.4m, the High Court ruled.

Mary McCormack, from Balbriggan, Dublin, said she signed the guarantee documentation with her husband John because he was due to attend a kidney dialysis appointment that day.

He had become agitated when she questioned whether she should sign it because she had no financial interest in the deal, she said.

Her husband told a bank official and a solicitor at the meeting that they would both sign it, she said.

"He asked that I sign it and I acknowledge I felt pressurised to do so and I did so", she said.

She was conscious her husband was upset and likely to become more distressed if the meeting was not concluded.

This would "potentially have a negative impact on both his physical condition and on his capacity to undergo the dialysis treatment that was to take place immediately after the meeting", she said.

She also said that though the solicitor, who was there for the bank at the meeting, told her she should not sign until she got her own legal advice, she remained unaware as to why she was being asked to execute a guarantee on the loan. Mr McCormack died a few months later.

The case related to a loan guarantee agreement for an overdraft advanced in 2011 and 2012 by Ulster Bank to a company called White Hart Inn Ltd, owners of a pub in Balbriggan, Co Dublin, of which Ms McCormack was a director and secretary.

It was part of a 2006 agreement in which the couple agreed to pay the bank all monies at the time or in the future owed by the company for an amount not exceeding €2.9m.

Mr McCormack had been a publican since the 1960s and owned the Balrothery Inn, just outside Balbriggan. In 1999, Mr McCormack acquired a second pub, the White Hart Inn in Balbriggan.

The company, White Hart Inn Ltd, incurred substantial loan liabilities relating to that acquisition and in 2011/12 the overdraft agreement was signed in the McCormacks' kitchen with the solicitor and bank official present and their son Brendan McCormack arrived later on.

The Ulster Bank loans were later sold to Coney Investments DAC which sought repayment of €1.46m. It was not forthcoming and proceedings were then brought for judgment by Coney against her.

Mrs McCormack claimed, among other things, she was entitled to a full plenary hearing of the claim because the agreement was signed under undue influence.

Coney disputed her claim.

Mr Justice Charles Meenan said she was entitled to a plenary hearing.

There were a number of significant features of this case so entitling her including that her husband was clearly in poor health. He also became agitated during the meeting and she felt pressurised because she feared the distress would have a negative impact on his health, the judge said.

The events she alleges give rise to a defence of undue influence, he said.

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