Court of Appeal dismisses appeal against summary judgment for grant repayment based on valid evidence and novation.

APPROVED NO REDACTION NEEDED

THE COURT OF APPEAL

Court of Appeal Record No.: 2024 267

High Court Record No.: 2022 334 S

Neutral Citation No.: [2025] IECA 226

Whelan J. Binchy J. Pilkington J.

BETWEEN/

INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)

PLAINTIFF/

RESPONDENT

- AND -

AVARA PHARMA SERVICES LIMITED

DEFENDANT/

APPELLANT

JUDGMENT of Mr. Justice Binchy delivered on the 14th day of November 2025

1. This judgment concerns an appeal from a judgment delivered (ex tempore) by Owens

J. in the High Court on 18th October 2024, whereby he granted the plaintiff’s/respondent’s application for summary judgment against the appellant in the sum of €1,193,634.

Background

2. In February 2012, Shannon Free Airport Development Company Limited (“Shannon Development”) entered into an agreement (the “Grant Agreement”) to advance funding of up to €1,206,548 for the purposes of research and development to an entity known as UCB Manufacturing Ireland Limited (“UCB”). As is very often the case with such grants, the Grant Agreement was subject to conditions breach of which could give rise to obligations to repay the grant, in whole or in part. For this reason the letter approving the grant to UCB required that UCB SA, a Belgian Company and the parent company of UCB, should provide a guarantee to Shannon Development in respect of any the obligations of UCB to Shannon Development under the Grant Agreement. Accordingly, on 27th February 2012, UCB SA executed under seal a Deed of Guarantee (the “Guarantee”) in respect of any liabilities that UCB might have to Shannon Development to repay grants advanced by Shannon Development to UCB.

3. Pursuant to the provisions of s. 41 of the State Airports (Shannon Group) Act 2014, the rights and obligations of Shannon Development were transferred to the respondent.

4. In 2016, the pharmaceutical manufacturing business of UCB was bought by Avara Shannon Pharmaceutical Services Limited (“Avara Shannon”). In the course of implementing this transaction, the respondent, UCB, Avara Shannon, UCB SA and the appellant all entered into a Deed of Novation dated 9th February 2017 (the “Novation Agreement”), the purpose of which was to transfer all rights and obligations under the Grant Agreement from UCB to Avara Shannon, and as a condition of which the appellant was required, by the respondent, to undertake the obligations of UCB SA pursuant to the Guarantee. Clause 4 of the Novation Agreement provided as follows: - “In consideration of the New Company [i.e. Avara Shannon] completing the project in accordance with the terms and conditions of the Principal Agreement and in consideration of the New Promoter [i.e. the appellant] accepting to be bound by the terms of the Guarantee, the IDA hereby consents to the novation of the Principal Agreement [i.e. the Grant Agreement] and the Guarantee referred to in clauses 3(a) and 3(b) respectively. With effect from the Novation Date, IDA agrees to perform the Principal Agreement and be bound by its terms in every way as if the New Company were the original party, in place of the Original Company.”

5. It was a condition of the Grant Agreement that, in the event a court should order the winding up of UCB, then Shannon Development would immediately be entitled to seek repayment of grants already paid by it to UCB. In July 2019, an order was made for the winding up of Avara Shannon, which by this time stood in the shoes of UCB pursuant to the Novation Agreement.

6. On 20th January 2020, the respondent placed the liquidator of Avara Shannon on notice of the revocation of the grant monies. At that time, the amount of grant aid that had been provided pursuant to the Grant Agreement stood at €1,193,634. The respondent was subsequently informed by the liquidator that no dividend would be payable to it in the liquidation. Accordingly, by letter dated 1st December 2020, pursuant to the terms of the Guarantee, the respondent requested payment in this amount from the appellant. The respondent sent a further request for payment on 17th June 2021.

7. On 9th July 2021, Mr. Leonard M. Levie, a majority shareholder of the appellant, sent a letter to the then CEO of IDA Ireland, Mr. Martin Shanahan, regarding the request for repayment of the grant. In this letter, Mr. Levie refers to investment by the Avara Group of €16m in Avara Shannon over a three-year period, which investment ultimately was lost owing to the failure of Avara Shannon. He then refers to the correspondence sent on behalf of the respondent demanding repayment of the grant, as follows: - “Recently, I received a very puzzling letter from your team, seeking the repayment of a grant awarded to UCB in December 2011 for a total amount of €1,193,634, payable immediately. My understanding is that the UCB Pharma Group benefited from the bulk of the referenced amount and that Avara received merely a trivial amount from this grant in 2018.” He asked Mr. Shanahan to review the matter.

8. The court has not been shown any further correspondence between Mr. Levie and Mr. Shanahan. However, on 23rd August 2022, the respondent through its solicitors demanded repayment of the sum of €1,193,634 from Avara Shannon. Since no payment was received, by a further letter of demand dated 18th October 2022, the respondent through its solicitors demanded payment of the said sum of €1,193,634 from the appellant, pursuant to the terms of the Guarantee.

The Proceedings

9. Having obtained leave to issue and serve proceedings on the appellant outside of the jurisdiction, in the United Kingdom, the respondent issued proceedings by way of summary summons on 18th November 2022. A notice of motion seeking summary judgment in the sum of €1,193,634 was issued on 14th March 2023, grounded upon the affidavit of Mr. Andrew Reynolds who describes himself as a senior accountant of the respondent. He expressly avers that he makes the affidavit from facts within his own knowledge based upon business records held by the respondent, which records were compiled in the ordinary course of business of the respondent and were provided to Mr. Reynolds by a person or persons who had personal knowledge of the matters addressed by him in his affidavit.

10. Mr. Reynolds then proceeds to set out the history giving rise to the proceedings, which I have summarised above, and he avers that, by reason of the Guarantee, the appellant is indebted to the respondent in the sum of €1,193,634, and that the appellant appears to have no bona fide defence to the respondent’s claim.

11. Mr. Levie swore an affidavit in reply to that of Mr. Reynolds on 26th July 2023. Mr. Levie denies the transfer of any obligations under the Grant Agreement by UCB SA to the appellant. He says that any obligations under the Grant Agreement remain those of UCB.

12. Somewhat surprisingly, Mr. Levie expresses himself to be perplexed as to why a research and development grant “has migrated into an obligation to repay enforced by a lawsuit”. He says that in his experience research and development grants are not liabilities, they are incentives for investment and are not usually repayable. In any case he says, any obligation to repay is that of UCB and not the appellant.

13. Mr. Levie then proceeds to address certain matters regarding the manner in which the documentation relied upon by the respondent was executed. He claims that the Deed of Novation is “inoperative and void” because, while the copy exhibited by Mr. Reynolds is stated to have been executed under the common seal of Avara Shannon in the presence of Mr. Keith Lyon and Mr. Andrew Glanville, each of whom are described as directors, no seal was actually affixed to the Deed. Mr. Levie avers that he has not seen the original Deed.

14. I should explain at this juncture, that, on the day prior to the hearing of the summary judgment application in the High Court, the solicitors for the respondent informed the solicitors for the appellant that the original Deed was available for inspection, and brought the same to the High Court on the day of the hearing of the summary judgment application. However, the respondent declined to inspect the same. I should also explain that the reason the seal was not apparent on the copy exhibited by the respondent is that the seal in question is not one endorsed using ink, but is a seal produced by embossment, which does not lend itself to photocopying. In any case, the High Court judge, having seen the original Deed with seal endorsed, gave liberty to the respondent to correct matters by producing a further affidavit, after the hearing, confirming that the Deed of Novation bears the seal of the appellant. At the hearing of this appeal, counsel for the appellant very sensibly did not pursue the due execution of the Deed of Novation by Avara Shannon as an issue in the appeal, other than to submit that the late production of the original Deed of Novation is an issue to be taken account in relation to costs, an issue which I will address presently.

15. Mr. Levie also took issue with the execution of the Deed of Novation by the appellant. He averred that instead of the Deed of Novation being executed under the seal of the appellant, it had been executed “for and on behalf of” the appellant, also by Mr. Lyon and Mr. Glanville, with each describing themselves as a director. Mr. Levie averred that in order for the Deed of Novation to have been executed properly by the appellant, it was necessary for it to affix its company seal and that if the company seal is affixed, it must be accompanied by the signature of a director and another person, either being “an authorised person” or another director or the secretary of the appellant. Mr. Levie averred that Mr. Lyon’s tenure as a director of the appellant was terminated on 24th April 2017, very shortly after the alleged execution of the Deed of Novation, and he further averred that Mr. Glanville was never a director or secretary of the appellant, and nor was he authorised by the appellant for the purpose of signing documents to which the common seal is applied. At the hearing of this appeal, this last point was not pursued, i.e. it was accepted that both Mr. Glanville and Mr. Lyon did have authority to execute the Deed of Novation, but the appellant nonetheless contended that the Deed of Novation was not properly executed by it, for reasons I address below.

16. The final issue raised by Mr. Levie in his first replying affidavit is that of delay; he claims that the appellant is prejudiced by reason of an alleged delay on the part of the respondent in pursuing the monies claimed, because (he claims) the appellant was prevented by the delay from claiming any contribution from Avara Shannon owing to its dissolution on 10th November 2022.

17. Mr. Reynolds replied to Mr. Levies’ affidavit by way of further affidavit of 22nd November 2023. He expressed surprise at the averment of Mr. Levie that research and development grants are not usually repayable – Mr. Reynolds averred that it is entirely routine for the respondent to seek repayment of grants where the conditions of the same have not been complied with. Moreover, he averred, the respondent is funded primarily by public monies and has a responsibility to ensure that its resources are applied prudently, and its contractual entitlements enforced.

18. Mr. Reynolds then addresses the matters raised by Mr. Levie in regard to the execution of the Deed of Novation. He avers that even if the Deed of Novation was not properly sealed by Avara Shannon, it was not necessary for the Deed of Novation to be executed by Avara Shannon under seal, because it was supported by consideration moving from the respondent to Avara Shannon, and in this regard Mr. Reynolds notes that Mr. Levie had previously acknowledged such consideration in his letter of 9th July 2021 in which he stated (as noted above) that “Avara received merely a trivial amount from this grant in 2018.”

19. Mr. Reynolds then addresses the manner of execution of the Deed of Novation by the appellant. He avers that the reason why the appellant did not execute the Deed of Novation under seal was because its own representative had confirmed prior to its execution that there was no requirement as a matter of law for a UK incorporated company to execute a deed under seal, in light of the provisions of the UK Companies Act, 2006. In this regard Mr. Reynolds exhibited an email from a Mr. Paul Hackett of the appellant to a Ms. Michelle Ward of the respondent of 16th December 2016 in which Mr. Hackett stated that: - “As I explained there is no Company Seal required in the UK since 2006 and our UK based legal advisors are not willing to form a Legal Opinion as per clause 10 of the agreement. Can I take it that the Directors’ Signatures will be sufficient?” In the same email, Mr. Hackett stated that the Deed of Novation would be executed by Avara Shannon under seal.

20. I pause here to mention that clause 10 of the Deed of Novation had expressly provided that in the event that it was not executed under seal by the appellant, the appellant was required to procure for the respondent written confirmation from an independent lawyer practicing within the jurisdiction in which it is incorporated confirming that the agreement had been properly executed and that the appellant was acting within its powers in entering into the same. However, as is apparent from Mr. Hackett’s email, the appellant requested the respondent to dispense with the requirement in this instance. The respondent agreed, on condition that the appellant itself would provide a certificate to the same affect. The appellant agreed to do so, and in a document dated 19th January 2017, Mr. Lyon certified as follows: - “As Corporate Secretary of Avara Pharma Services Limited I certify the following:-

1. The Agreement [referring to the Deed of Novation] has been duly executed and delivered on behalf of Avara Pharma Services Limited by Keith A. Lyon who is an authorised officer of the Promotor [i.e. the appellant].

2. The execution, delivery and performance of the Agreement by Keith A. Lyon in his sole capacity, are within the Promotors [sic][i.e. the appellants’] corporate powers and has been duly authorised by all necessary corporate action.

Signed by: Keith A. Lyon

Corporate Secretary of Avara Pharma Services Limited.”

21. Although Mr. Levie did swear a further replying affidavit on 8th February 2024, he did not address in any substantive way the content of the certificate provided by Mr. Lyon.

22. In the remaining paragraphs of his affidavit of 22nd November 2023, Mr. Reynolds addresses the issue of delay and prejudice that had been raised by Mr. Levie in his previous affidavit. Mr. Reynolds avers that in reply to the respondent’s letter to the liquidator of 20th January 2020, the liquidator’s agent had responded by email of 29th October 2020 stating that there would be insufficient funds to pay a dividend to the unsecured creditors of the company. Mr. Reynolds exhibited a copy of the email received from the office of the liquidator. Mr. Reynolds also makes the observation that it is clear from Mr. Levie’s own previous correspondence that he was fully aware of the true financial circumstances of Avara Shannon and would have been aware that nothing was recoverable from the liquidation of that company.

23. In a second replying affidavit of 8th February 2024, Mr. Levie raises, for the first time, the means of knowledge of Mr. Reynolds to depose to the matters of fact to which he has deposed in his affidavits.

24. In a third affidavit sworn by Mr. Reynolds on 29th April 2024, Mr. Reynolds confirms that while he was not directly involved in the commercial engagements between the parties before the contracts which are being sued upon were concluded, the respondent’s case is advanced by reference to contractual documents, “as to the authenticity of which there is no dispute.”

25. Mr. Reynolds then proceeds to address the issue raised by Mr. Levie that the Deed of Novation was not properly executed by the appellant because it was not sealed. He exhibits an opinion obtained from a Ms. Maria Mulla, a Barrister practicing from Maitland Chambers in London. Unfortunately, however, the respondent would not agree to the admission in evidence of that opinion because it had not been placed on affidavit.

Judgment of the High Court

26. The Judge formed the view that: “This is a really clear case, there’s absolutely no defence that could possibly conceivably succeed in relation to it… .”

27. In relation to the Deed of Novation, the first observation that he made was that it discloses consideration on its face. He noted that the effect of it was to release some people from obligations and to insert others into the same obligations, and that accordingly, consideration “moved every way”. For that reason, there is no requirement in law that it should be executed by any of the parties under seal. If therefore it had been the case that the seal of Avara Shannon had not been affixed to the Deed of Novation, this would have made no difference because it had been signed on behalf of Avara Shannon by both Mr. Lyon and Mr. Glanville. So, therefore, even if it hadn’t been executed as a deed, it would still have been a binding agreement upon Avara Shannon.

28. The Judge then addressed the argument made that the Deed of Novation had not been properly executed by the appellant, because it had not been executed under seal. He noted that while Mr. Levie had exhibited the articles of association of the appellant, which provide that “if the Company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature”, there was no evidence that the appellant had a seal at all. In this instance the Deed of Novation had not been executed with the purported use of a seal, it had been signed for and on behalf of the appellant by Mr. Glanville and Mr. Lyon. The Judge noted that there was no suggestion that Mr. Lyon did not have authority to execute the Deed. There was no basis, in the view of the Judge, for reaching the conclusion that the Deed of Novation had not been properly executed by the appellant.

29. The Judge also observed that there had been no effort on the part of the appellant to engage with the certificate provided by Mr. Lyon in relation to the execution of the Deed of Novation by the appellant. Insofar as clause 10 of the Deed of Novation entitled the respondent to insist upon the provision of a legal opinion in this regard, that was a matter which the respondent was entitled in its own discretion to insist upon or to waive, and could not affect the validity of a document that is in any case validly executed.

30. The Judge rejected the arguments made on behalf of the appellant that there was any deficiency of proof in relation to the amount owed. He held that Mr. Reynolds was entitled to consult the books and records of the respondent, and he noted that Mr. Reynolds was not being required to verify a series of transactions or a statement of accounts, by which I infer that he did not consider that Mr. Reynolds needed to have any personal familiarity with the transactions in order to identify the debt claimed to be due. The Judge noted that all that was involved here was to identify the grants advanced by the respondent, and there was no dispute that the grant monies had in fact been paid.

31. The Judge observed that in circumstances where a contract is concluded between persons in different countries, it is formally valid if it satisfies the formal requirements of the laws of one of those countries. In so holding, the Judge placed some reliance on article 9(2) of the 1980 Rome Convention on the Law Applicable to Contractual Obligations, which provides that: - “A contract concluded between persons who are in different countries is formally valid if it satisfies the formal requirements of the law which governs it under this Convention or the law of one of those countries”. The 1980 Rome Convention has since been superseded by Regulation (EC) No. 593/2008 on the law applicable to contractual obligations (Rome I). However, article 11(2) thereof is, so far as is material in these proceedings, identical to article 9(2) of the 1980 Rome Convention.

32. In this case, so far as concerns a Deed of Novation, it is sufficient under Irish law if it is made in writing. The Judge added that a valid agreement to novate a contract could, under the laws of the State be made orally, although that would obviously not be the case in relation to a guarantee.

33. Finally, so far as the validity of the Deed of Novation is concerned, the Judge also referred to and placed some reliance upon the rule in Turquand’s case, i.e. The Royal British Bank v. Turquand (1855) 119 E.R. 474, also known as the “indoor management rule”, which holds that persons transacting business with companies are entitled to assume that internal company rules are complied with, even if they are not. Applying that principle to the facts of this case, the judge held that in circumstances where there was no denial that the documents had been executed on behalf of the companies, the appellant was not entitled to “get into the mechanics of the internal management of companies” i.e., the relevant procedures applicable to the due execution of documents by the appellant.

34. For all of the foregoing reasons, the Judge held that the respondent was entitled to succeed and to recover judgment as against the appellant in the sum of €1,193,634. He also ordered that the appellant should pay the respondent the costs of the proceedings, save for the sum of €1,000. This deduction he considered was appropriate in circumstances where the Judge considered that the respondent had contributed to the confusion as to whether or not the Deed of Novation had been sealed by Avara Shannon.

Notice of Appeal

35. There are eighteen grounds of appeal, the principal grounds of which are as follows:

(1) The Judge erred in refusing to remit the proceedings to plenary hearing in circumstances where the appellant had raised arguable grounds of defence to the respondent’s claim.

(2) The Judge erred in permitting the respondent to rely on matters that were not proven in evidence and by permitting the respondent to swear and file an affidavit following upon the hearing in the High Court.

(3) The Judge erred in making his determination based upon matters that were not proven in evidence.

(4) The Judge erred in determining that there was no legal requirement for the Deed of Novation to be executed by any of the parties under seal, and in holding that such a deed only requires to be in writing.

(5) The Judge erred in concluding that there was no evidence that it was a requirement for the appellant to affix its company seal to the Deed of Novation.

(6) The Judge erred in concluding that the Deed of Novation was supported by consideration and/or that “consideration moved every way”.

(7) The Judge erred in concluding that Mr. Glanville did not have authority to execute the Deed of Novation – this ground was withdrawn at the hearing of the appeal.

(8) The Judge erred in failing to consider the defence raised by the appellant that there was no credible evidence and/or that Mr. Reynolds’ evidence was insufficient to establish that the Deed of Novation was executed and/or to ground the claim.

Discussion

36. At the outset, it should be made clear that there was no dispute between the parties as to the principles applicable to applications for summary judgment, which have been very well settled for a considerable time. The issue for determination in this appeal is whether or not the High Court judge erred in concluding that the appellant had failed to establish an arguable defence to the proceedings.

37. At the time that it was approached for its consent to the Deed of Novation, the respondent had the benefit of both the Grant Agreement and the Guarantee by which UCB SA had guaranteed the obligations of UCB under the Grant Agreement. From a commercial perspective therefore, it is hardly surprising that when its consent was sought to the novation of the Grant Agreement, it required a guarantor for the obligations being assumed by Avara Shannon. Clause 4 of the Deed of Novation makes it very clear that it is giving its consent to the Novation of the Grant Agreement and the Guarantee in consideration of Avara Shannon assuming the obligations of UCB under the Grant Agreement, and of the appellant assuming the obligations of UCB SA under the Guarantee.

38. In considering the issues raised in this appeal, it is instructive to recall some of the basic principles applicable to the execution and enforceability of guarantees, and specifically those concerning consideration. In Breslin and Corcoran, Banking Law (4th ed., Round Hall 2019) at para. 14-43, the learned authors state: - “A contract of suretyship must be supported by a consideration if it is not executed under seal. Nominal consideration is adequate; in accordance with established principles, the court will not inquire into the sufficiency of consideration. The burden of proving that consideration is valid is on the person seeking to enforce the guarantee…”

Later in the same text, the authors state, at para. 14-54: -

“Where a guarantee indicates that it is “signed, sealed and delivered” but does not appear to have a seal affixed, the guarantee will still be affective if supported by valid consideration and the guarantor may be estopped from denying that it was so executed.” As authority for the latter proposition, the authors refer to TCB Limited v. Gray [1986] Ch. 621, [1986] 2 W.L.R. 517, [1986] 1 All E.R. 587.

Execution of the Deed of Novation by Avara Shannon

39. In this appeal, the appellant has pursued three principal grounds of appeal. Firstly, it is said, as far as Avara Shannon is concerned, that the appellant came to court to meet an argument that the Deed of Novation was binding upon Avara Shannon not as a deed executed under seal, but rather as an agreement supported by a consideration that did not require a seal. The appellant maintains that for this reason the trial judge erred in holding against Avara Shannon on the basis that the agreement was executed by it under seal, and further erred in looking at the original instrument at the hearing, and in affording the respondent the opportunity to verify, by an affidavit to be delivered after the hearing, that the Deed of Novation had been executed by Avara Shannon under seal.

40. Counsel for the appellant acknowledged during the course of the hearing before this Court that while there is now no dispute that the Deed of Novation was executed by Avara Shannon under seal – and so therefore a plenary hearing to determine whether or not Avara Shannon is bound by the Deed of Novation is obviously not required – the result of the change in the case made by the respondent was that the appellant had incurred costs in defending the application on a basis that was different to that which was ultimately pursued by the respondent. That being so, the appellant submitted that the costs order made by the Judge whereby he allowed a deduction of just €1,000 in the costs awarded to the respondent was an insufficient reflection of the costs unnecessarily incurred by the appellant by reason of the conduct of the respondent. When asked by the court what might have been a more appropriate costs order in the circumstances, counsel suggested that a reduction of the order of 30-33% would have been more appropriate since this was one of three main points of defence raised by the appellant in the High Court.

41. So, therefore, it is apparent that this ground of appeal has evolved and is now concerned only with the order for costs made by the Judge, and specifically with the adequacy of the abatement allowed by the Judge in favour of the appellant. In considering this issue, I must bear in mind the principles around the permissible scope of appellate review so far as concerns costs orders made by a court of first instance. It is well established that an appellate court should not interfere with a costs order where it was one reasonably within the margin of discretion of the trial judge, even if the appellate court itself might have made a different order. (See, for example, the judgment of Noonan J. in this Court in Minihane v. Skellig Fish Ltd. [2022] IECA 68, at para. 25).

42. Bearing this in mind, I will now consider the argument advanced by the appellant as to why the allowance made by the Judge under this heading was inadequate. The appellant argued that it had been led to believe by the respondent that it accepted that the Deed of Novation had not been executed under seal by Avara Shannon, and it was for that reason that the respondent was making the case that the Deed of Novation was an agreement that was enforceable as a written agreement for consideration, executed by hand, rather than on the basis of an agreement executed under seal. On that basis, the appellant had intended to argue that there were both legal and factual issues that required resolution, and these issues could only have been resolved by a plenary hearing. It was not therefore, as the Judge found, inevitable that the respondent would have succeeded on this basis.

43. In making the argument that the appellant had been led to believe that the respondent had accepted that the Deed of Novation had not been executed under seal by Avara Shannon, reliance was placed by the appellant on an averment of Mr. Levie, at para. 6 of his affidavit of 8th February 2024 (sworn in reply to the affidavit of Mr. Reynolds of 22nd November 2023) wherein Mr. Levie deposed inter alia: - “In any event, Mr. Reynold’s [sic] concession at paragraphs 7 to 10 of Reynolds 2 that the Novation Agreement was not executed under seal is welcomed and will be addressed in the Defendant’s legal submissions in due course.” While Mr. Reynolds swore a further replying affidavit, he did not address or contradict the foregoing averment of Mr. Levie.

44. While this may have given rise to a certain misunderstanding about what the respondent was or was not saying about the manner of execution of the Deed of Novation by Avara Shannon, that misunderstanding cannot be laid at the door of the respondent alone. One only has to look at Mr. Levie’s own averment just quoted above. He refers to Mr. Reynolds’ concession that “[t]he Novation Agreement was not executed under seal” but in so stating he does not give any indication as to whether he is referring to the execution of the Deed of Novation by Avara Shannon or by the appellant. What Mr. Reynolds had in fact averred to in his previous affidavit is to be found at para. 10, in the first sentence of which he states: - “The reason why the Defendant [my emphasis] herein did not execute the Novation Agreement under seal was because its own representative confirmed prior to the execution of the Novation Agreement that there was no requirement as a matter of law for a UK-incorporated company to execute a deed under seal, in light of the provisions of the UK Companies Act 2006.” It could not have been more clear that in making this averment, Mr. Reynolds was referring to the execution of the Deed of Novation by the appellant, and not by Avara Shannon. In these circumstances it is difficult to understand why the respondent should be held any more responsible for whatever misunderstanding there may have been about this issue, and if anything, it would appear to be a misconstruction of the document on the part of the appellant that gave rise to the misunderstanding, rather than anything that was said by the respondent.

45. Absent an express statement that the respondent was not relying upon a sealed deed of novation, the parties were in no different a position to any other parties to proceedings in which a plaintiff seeks summary judgment against a defendant. It is only ever the case that copy documentation is exhibited by the plaintiff, and it is very common that company seals are not visible in photocopies of the original document. It is also not uncommon for defendants in such proceedings to seek production of the original document during the course of exchange of affidavits in the summary judgment procedure. No such request was made by the appellant in this case, and moreover the appellant declined to look at the original Deed the day before the hearing (when expressly informed that it had been sealed by Avara Shannon) or on the date of the hearing itself.

46. I turn now to the argument that the Judge erred in concluding that there was an enforceable agreement entered into between the parties on the basis of a written agreement, reciting consideration. In its written submissions to this Court, the appellant relied on statements both in the pleadings and in correspondence that the total amount claimed had been advanced by the respondent to UCB, and not to Avara Shannon. However, the appellant submits that in the High Court the respondent claimed that there was consideration moving directly from the respondent to Avara Shannon because a small portion of the grant monies were advanced directly to the latter and not to UCB.

47. While the appellant is correct is submitting that there were statements in letters and in the pleadings that the funds claimed by the respondent had been advanced to UCB, those statements were made in the general context of describing the advances made by the respondent under the Grant Agreement. In the context in which those statements were made there was no need to breakdown the disbursement of the funds as between the appellant and Avara Shannon, not least having regard to the reliance placed by the respondent on the Deed of Novation.

48. In the specific context of consideration, the respondent made its case very clearly, in the second affidavit of Mr. Reynolds at para. 8 wherein he averred: - “While this is more properly a matter for legal argument, I am advised by the Plaintiff's solicitors and counsel that the Novation Agreement did not have to be executed under seal in order to be enforceable. As set out on the face of the Novation Agreement, it was supported by consideration moving from the Plaintiff to Avara Shannon, as Avara Shannon was given the benefit of the Grant Agreement going forward. Mr Levie has in fact acknowledged in writing in the past that Avara Shannon had the benefit of grant monies following the execution of the Novation Agreement. In a letter dated 9 July 2021 he stated “[m]y understanding is that the UCB Pharma Group benefited from the bulk of the referenced amount and that Avara received merely a trivial amount from this grant in 2018” (emphasis added). I do not understand how Mr Levie can maintain that the benefit of the Grant Agreement never transferred to Avara Shannon, when he acknowledges that it received monies thereunder. I beg to refer to a copy of the letter dated 9 July 2021 upon which marked with the letters and number “2AR1” I have signed my name prior to the swearing hereof.”

49. This averment on the part of Mr. Reynolds could not have made it more clear that the respondent intended to assert at the hearing that the Deed of Novation was enforceable as an agreement founded not just on monetary consideration advanced directly to Avara Shannon by the respondent, but also on the basis of the non-monetary consideration whereby the respondent was agreeing to Avara Shannon having the benefit of the Grant Agreement going forward in place of UCB. Significantly, Mr. Levie made no reply to this averment in his further replying affidavit. Nor, it must be emphasized, did the appellant challenge the authority of either Mr. Lyon or Mr. Glanville to enter into such an agreement on behalf of the appellant.

50. So therefore, even if the Deed of Novation had not been executed under seal by Avara Shannon, the Court had before it evidence of an agreement in writing signed on behalf of Avara Shannon by two persons with authority to do so, pursuant to which the respondent, for the consideration referred to therein, consented to the novation of the Grant Agreement by which the appellant assumed the obligations of UCB SA under the Guarantee. I do not agree that there were any legal or factual issues remaining to be determined, as has been submitted by the appellant, or that there was any unfairness to the appellant in the manner in which the Judge arrived at this conclusion.

51. In all of these circumstances, I consider that the costs order that was made by the Judge in relation to this issue was comfortably within the margin of his discretion and should not be interfered with by this Court.

Execution of the Deed of Novation by the Appellant

52. The second principal ground of appeal relates to the execution of the Deed of Novation by the appellant. The High Court judge held against the appellant in relation to this issue for several reasons. Firstly, he noted that looking at the Deed of Novation itself, it does not purport to have been executed on behalf of the appellant under seal. It was signed for and on behalf of the appellant by Mr. Glanville and Mr. Lyon. The Judge noted that there was no challenge to the authority of Mr. Lyon to execute the document on behalf of the appellant, and of course at the hearing of this appeal any argument that Mr. Glanville did not have authority to do so was abandoned.

53. The Judge also noted that while it had been argued that, as a matter of law, it was necessary for the appellant to affix its company seal to the Deed of Novation, there was absolutely no evidence to support that submission. In making this observation I am assuming that the Judge was referring to English law, which would have to be proven as a matter of fact in this jurisdiction. The Judge noted the submission that the constitution of the appellant required that, where the company seal of the appellant is affixed to a deed it must be signed by a director and by another authorised person, but, he observed, there was no evidence that the appellant had a company seal.

54. The Judge also placed reliance upon the certificate signed by Mr. Lyon in relation, amongst other things, to the due execution of the Deed of Novation by the appellant. He observed that there had been no attempt by the appellant to engage with the certificate. He also held that it was entirely a matter for the respondent to decide whether or not it wished to insist upon production of the opinion referred to in clause 10 of the Deed of Novation.

55. The Judge said that where a contract has been concluded between persons in different countries, it is formally valid if it satisfies the formal requirements of the laws of one of those countries. In this case he was satisfied that at the very most, the only requirements in Irish law in relation to the execution of a Deed of Novation is that it should be in writing, and that requirement was satisfied in this case. He also placed reliance on the rule in Turquand’s case and that there had been no denial that the Deed of Novation had in fact been executed on behalf of “the companies” i.e., both Avara Shannon and the appellant. The rule in Turquand’s case has been preserved by s. 40(11) of the Companies Act, 2014.

56. At the hearing of this appeal, counsel placed significant reliance upon clause 10 of the Deed of Novation, but in my view there cannot be any doubt at all but that this was a clause in the Deed of Novation which was for the benefit of the respondent and which it was entitled to waive. Moreover, it only waived its entitlement under the clause when expressly requested by the appellant to do so, and to accept instead the certificate of its company secretary. The Judge was correct in his observation that the appellant did not engage in any way with the certificate or dispute the accuracy of the contents of the same. In written submissions to this Court on this issue, counsel for the appellant argued that the Judge erred in relying on the certificate provided by Mr. Lyon partly on the basis that he himself did not profess to be a lawyer, but this does not engage with the substance of the certificate provided by Mr. Lyon.

57. The core of the appellant’s submission under this heading is that the Deed of Novation was not executed properly or at all by the appellant. However, the respondent has placed reliance upon the certificate given by Mr. Lyon that the Deed of Novation was duly executed and delivered on behalf of the appellant, and other than to observe that Mr. Lyon is not a legally qualified person, the appellant has made no submission in relation to this certificate nor has it is adduced any evidence in regard thereto. While Mr. Levie has exhibited the articles of association of the appellant to demonstrate that “any common seal” may only be used with the authority of the directors and that “if the company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature”, the problem for the appellant is that it has never even been suggested that the appellant actually has a company seal.

58. When asked about this by a member of this Court, counsel for the appellant replied that she had made inquiries as to whether or not the appellant had a seal, but she had not received any instructions in reply. In effect, the appellant is placing reliance on a seal the existence of which it has not addressed at all in evidence.

59. In any case, all of this is academic in circumstances where it is apparent from the face of the Deed of Novation itself that it was not purported to be executed under seal, with the words “present when the common seal of” scratched out and replaced with the words “signed for and on behalf of”. While some attempt had been made to challenge the authority of Mr. Glanville to sign the Deed of Novation on behalf of the appellant, that was not pursued at the hearing of this appeal. Thus, the Court is left with a Deed that (a) does not require to be executed under seal (b) which recites consideration on its face and (c) has been signed on behalf of the appellant by two authorised officers.

60. While the appellant has sought to argue that the High Court judge erred in taking account of the opinion of an English barrister tendered by the respondent, on the basis that it had it not been provided by way of affidavit, it is manifest from the decision of the High Court judge that he expressly excluded that evidence and decided this issue on the other grounds to which I have referred above. It is plain beyond any doubt from all of the foregoing that the appellant can have no defence to these proceedings based upon the manner of execution the Deed of Novation.

The Hearsay Argument

61. Finally, the appellant contended that the trial judge erred in deciding the application for summary judgment on the grounds that the evidence of Mr. Reynolds was hearsay and should not have been admitted or accepted by the court. This argument must also be rejected.

Mr. Reynolds expressly averred that he is relying on certain business records held by the respondent, and that all such records were compiled in the ordinary course of the business of the respondent and were supplied to him by a person or persons who had personal knowledge of the matters dealt with therein.

62. It was submitted on behalf of the appellant that since Mr. Reynolds had no direct involvement with the matters in these proceedings, and is not a director of the respondent, he lacks the requisite knowledge as to the circumstances surrounding the agreements and therefore his evidence is not sufficient to establish a claim to the amount due.

63. The claim in these proceedings is a simple one. The respondent advanced a grant to UCB, and now seeks repayment of it on the grounds of a breach of the Grant Agreement pursuant to which it was advanced to UCB, and on the basis of the Deed of Novation pursuant to which Avara Shannon and the appellant assumed the obligations of UCB and UCB SA respectively. In order to be able to adduce evidence as to the liability of the appellant in these circumstances, Mr. Reyolds only has to be familiar with the records that demonstrate the advance of the loan and the existence of the agreements themselves. In his first letter of demand, which he personally sent to the appellant on 1st December 2020, Mr. Reynolds provided details of the grant approved, the amount paid and the unpaid balance of the grant, payment of which Mr. Reynolds said had been cancelled.

64. In these circumstances, it is difficult to understand how it can seriously by asserted that the respondent, in order to succeed with its claim, must adduce evidence from a person who was involved in the original transaction or alternatively from an officer of the respondent. The appellant has not even put in issue the advancement of the funds to UCB (and could hardly do so not least having regard to Mr. Levie’s letter of 9th July 2021). No issues at all have been raised in relation to the terms of the Grant Agreement, and to suggest (if it is suggested) that Mr. Reynolds is prevented by the hearsay rule from exhibiting that agreement would be absurd. Any arguments grounded upon the admissibility of the Deed of Novation have already been addressed above. I would therefore reject this ground of appeal also.

Conclusion

65. For all of the foregoing grounds I would reject this appeal in its entirety. Since the respondent has been entirely successful in this appeal, my provisional view is that it is entitled to an order requiring the appellant to discharge the costs of this appeal in full, the same to be determined by adjudication in default of agreement. If the appellant wishes to contend for a different order, it may do so by making submissions not to exceed 1,500 words within two weeks from the date of delivery of this judgment, and the respondent shall have liberty to reply by submissions also limited to 1,500 words within a further period of 14 days after delivery of such submissions as may be made by the appellant.

66. Since this judgment is being delivered electronically, Whelan J. and Pilkington J. have authorised me to indicate their agreement with it.