Bank's bid for €2.6m summary judgement against South Dublin couple referred to full hearing

By Ann O'Loughlin

An application by AIB for summary judgement of over €2.6m against a South Dublin couple has been dismissed by the High Court.

Mr Justice Donald Binchy ruled Kevin and Gillian O'Brien of Clonfadda Wood, Mount Merrion Avenue, Blackrock, Co Dublin had raised an arguable defence against the bank's claim, and the matter should now go for a full hearing.

AIB Mortgage Bank and AIB PLC claimed it advanced monies to the couple, which the court found were used for purposes including the €2.5m purchase of a property located beside their former home.

The bank claims the couple allegedly breached the terms of loan facilities offered in 2010.

While some monies had been repaid AIB claimed €2.6m remains outstanding.

The O'Briens said they have an arguable defence to the claims, which should go to a plenary hearing of the court.

Mr O'Brien, represented by Venetia Taylor BL, argued the monies at the centre of the dispute were advanced in 2006 and in 2008, and funds were not drawn down from the bank in 2010.

On that basis, the loan agreements are void due to a want of consideration.

Mr O'Brien who is a solicitor, also argued AIB failed to honour an oral agreement to advance him additional funds so Mr O'Brien could build an extension to the property he moved into and his ability to sell his former home was delayed.

That delay, he claimed, meant he was forced to sell at the very bottom of the property market. He also claims the bank failed to comply with the code of conduct of mortgage arrears.

The property was acquired because unlike their former home it was suitable for an extension. The couple moved into their new home in late 2007, and as agreed with the bank, their former home was put up for sale.

Due to the financial crash, there was a delay in selling their former home, which was sold in 2012 for €760,000.

Mr O'Brien said that during that period his former home was rented, and that money was paid to the bank to reduce his arrears.

He also claims that in 2008 he wanted to sell the house for €1m, but the bank refused to allow him to accept that bid because it was a "vulture price."

Mrs O'Brien's lawyers sought to have the case remitted on grounds including that she was subjected to undue influence in relation to the loan negotiations.

AIB rejected the couple's claims that they had raised an arguable defence to its claim for summary judgment.

The bank said that as part of internal bank exercise the loans advanced to the couple were categorised as being subject to agreements in 2010.

In his decision, Mr Justice Binchy in dismissing the bank's application said that monies were advanced to the couple in 2006.

The judge said that the exercise that the parties engaged in 2010 was a very common practice in the years following the financial crisis.

In this case, the reasons were not put forward by the plaintiffs, and in these proceedings, the transactions were characterised by the defendants in the manner described above, i.e. that the provision of the 2010 facilities by the plaintiffs amounted to no more than an internal bank exercise.

While the bank said this amounted no more than an internal exercise, and can point to credits and debits on paper the Judge said the fact was no new funds were advanced or drawn down by the couple in 2010.

The judge said that was some substance to the defence there was an absence of consideration in connection with the 2010 facilities.

On that basis, the judge said it was appropriate that the case go forward for plenary hearing.

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