AIB v Rostaff Property Development Ltd

The recent decision of Barrett J in AIB v Rostaff Property Development Ltd (High Court, 7 September, 2017) once again highlights the difficult area of undue influence in the context of guarantees given by an individual who is a spouse or "romantic partner" of the debtor. The issue can also arise where the debtor is a company owned or controlled by the guarantor's spouse or "romantic partner". The doctrine of undue influence provides a defence to a guarantor who is in an obvious vulnerable position and on whom unfair pressure was exerted to sign the guarantee. In practice such pressure can range from emotional blackmail to physical violence.

In Rostaff the bank lent money to a company. The principal director's (then) romantic partner guaranteed repayment of the debt. The company defaulted. The bank obtained judgment against the company and the principal director, and then sued his former romantic partner on her guarantee. She disputed liability claiming (amongst other