AIB awarded 4.3m against businessman in loans dispute

THE High Court has granted AIB judgment of 4.3m against a Waterford businessman over the purchase of 17 acres of land and the acquisition of a business premises.

Mr Justice Peter Kelly made an order granting the bank judgment for 4,287,742.40 against Thomas Farrell, Greenfield House Monvoy, Tramore, Co Waterford over two loans secured from the bank in May and July of 2006.

The court heard that the sums loaned to Mr Farrell, were 3.7m to facilitate the purchase of 17 acres of land at Bawnfune, Buttlerstown, Co Waterford, and separately 235,000 was sanctioned to facilitate the purchase of an industrial unit at the Waterford Business Park, Cork Road Waterford.

The loan to buy the industrial unit was to be repaid in monthly instalments of 1,421 over the next 20 years.

In relation to the loan for 3.74m it was agreed between the parties that there was to be a capital moratorium for five years from the date of drawdown, with interest repayments of 168,000 per annum.

Counsel for AIB, Bill Shipsey SC told the court that Mr Farrell had not repaid a single cent of either loan, and had no 'bona fida' defence to the bank's claim.

Counsel for Mr Farrell, Marie Baker SC, argued that because of the moratorium on the loan for 3.74m, the bank was not entitled to seek judgment for that amount. She said that the agreement in relation to what was a fixed loan lasted until 2011.

In a counterclaim for damages against AIB, aimed at securing a stay on any judgment, Mr Farrell alleged that during a routine audit of his accounts at the AIB in the early 1990s, 15 accounts came to light including 15 bogus non-resident accounts.

He said he had no knowledge of these accounts, and that there were no lodgement, transfer of withdrawal slips signed by either him or his wife in relation to these accounts, nor had the bank ever been mandated to operate these accounts.

Mr Farrell also claimed that further investigations showed that regular sums of money were transferred from these accounts to Allied Irish Financing and Leasing in the UK.

He added that no explanation has ever been give, despite requesting the identity of those who authorised those transactions.

He further claimed that in 1987 his account was debited to the amount of IR300,000 which was re-credited two days later, and that he was overcharged interest and fees by the bank.

As a result of the audit he became liable to Revenue for additional sums and penalties, which he said forced him to re-mortage his business. He said that the bank was seeking judgment because of his claims against them.

The bank denied Mr Farrell's claims.

In his judgement Mr Justice Peter Kelly dismissed the defence's argument that the AIB was not entitled to judgment of the 3.74m because of the five year moratorium.


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