High Court judge rules woman can pursue damages case against bank

By Ann O'Loughlin

A High Court judge has refused a bank's bid to halt an action by a woman alleging a bank manager obtained false income details to support a property investment loan application.

Maureen Coyne, a mother of four, claims a National Irish Bank manager sought a letter from the financial director of her husband Raymond's employer in 2006 to support a €235,000 loan application by the couple.

The letter suggested her husband, a construction worker employed as a foreman in his brother’s firm, had an annual pay package of €65,000 when his annual income was €26,000, she alleges.

She claims Declan Cox, then manager of NIB’s Mullingar branch, and her husband both knew that was false but she knew nothing about the letter.

In her action, she wants damages against the bank, which previously got a judgment against the couple after they could not repay the loan due to the property collapse.

Today, Mr Justice Seamus Noonan ruled Ms Coyne is entitled to proceed with her action against Danske Bank - which took over NIB - and granted her application to join her husband as a co-defendant.

Ms Coyne claims she and her husband were customers of anther bank in 2006 when her husband’s brother introduced them to Mr Cox to discuss finance for a property investment. They were interested in acquiring a house on a large site with planning permission for a second house and intended to get finance to buy the property, build the second house and sell both at a substantial profit.

She claims they got a loan of €235,000 and an outstanding mortgage of €50,000 on their home was also cleared as part of their arrangement with NIB.

They bought the property and built the second house but were unable, as a result of the collapse in the property market, to sell the properties and repay the debt to NIB. Danske later got summary judgment in 2015 against them for the €137,150 sum outstanding on the loan after the bank sold both houses.

The Court of Appeal dismissed their appeal against that judgment order in April 2016.

Some months earlier, they had initiated proceedings over the circumstances in which the 2006 loan was allegedly advanced but the bank sought to halt their case on grounds including it amounted to a claim of reckless lending, not an offence under Irish law, and was bound to fail.

Mr Coyne discontinued the action but Mrs Coyne opposed the bank’s bid to halt it.

In his judgment, Mr Justice Noonan said this claim went “considerably further” than a mere allegation of reckless lending.

The main claim is Mr Cox, the bank’s servant or agent, knew Mr Coyne’s financial profile would not have enabled him to qualify for the loan but, despite that knowledge, Mr Cox not only recommended to the bank the loan be advanced but put forward evidence in support of the loan application which he knew to be false, the judge said.

Mrs Coyne claimed Mr Cox contacted Manus Sweeney, the financial director of the firm employing her husband, to ask Mr Sweeney to forward him a letter showing Mr Coyne was getting bonus payments suggesting his actual income was about €65,000, the judge said. Mr Sweeney had sworn an affidavit stating he was contacted by Mr Cox asking him to provide a letter showing Mr Coyne’s income at that level.

Mrs Coyne says she knew nothing about this and the allegations have yet to be proved, the judge added.

The fact Mrs Coyne did not raise this issue in her defence to the bank’s judgment claim did not prevent her raising it now, he ruled. The claim was not a collateral attack on the earlier judgment, he also held.

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