ACC Bank seeking repayment of €7m loan made to property development company

ACC BANK is seeking a High Court order requiring repayment of loans of almost €7 million, plus interest, made to a property development company and two of its directors.

The action is against Fairlee Properties Ltd, of Richmond Road, Fairview, and its directors Jerry Beades and Niall Ring.

They are disputing the claims and are counter-claiming for some €30m for losses on property developments resulting, it is alleged, from the bank’s actions including its admitted loss of title deeds of properties.

They are also alleging that ACC overcharged them more than €300,000 in interest between 2000 and 2004 before the bank lost the deeds. They also claimed ACC repeatedly failed to give them “any intelligible statement” of the amount of principal and interest owing and how interest was calculated.

The bank told the court yesterday it was prepared to deduct the disputed €300,000 figure from the amounts sought.

While conceding it temporarily lost the deeds and located them only after a two year period, the bank has denied the loss of the deeds resulted in the adverse consequences claimed by the defendants.

The dispute arises from loans totalling some €6.7m advanced to Fairlee in 2000, 2001 and 2006 to fund a proposed development in Fairview. As part of the deal, ACC Bank also held the title deeds for a number of properties owned by Fairlee, including the proposed development land.

The defence plead the bank’s loss of the title deeds and handling of the loans adversely affected the proposed developments and caused them significant losses.

Among the claims of losses, Mr Beades claims the bank’s alleged negligence meant he was unable to obtain the finance necessary to begin construction and advance sales of apartments at the Richmond Avenue site in June 2004 and was deprived of profits of some €6.5m which he had anticipated receiving by January 2006.

The case opened yesterday before Ms Justice Mary Finlay Geoghegan and is expected to run for four weeks.

Shane Murphy, counsel for ACC, said it was seeking to recover loans made to Fairlee and secured by guarantees of both Mr Beades and Mr Ring, an accountant and director of Fairlee. The three loans were issued on dates in July 2000, June 2001 and April 2006.

Counsel said the bank calculated the total sum due and owing, with interest, is €7.48m. However, the bank was prepared to accept judgment in a lower figure of €7.18m (minus the interest charged on the loans up to the time the title deeds were lost).

The defendants have contended, if the court rules against them on liability, the figure due is lower than €7.18m because the bank had overcharged them interest up to the time it lost the deeds. They also claim the bank, having agreed to provide them with interest free loans over a two year period between 2004 and 2006, was not entitled to unilaterally resume charging interest after that.

Mr Murphy said the bank argued it was entitled to resume charging interest because there had been default by Mr Beades on an agreement of April 2006 between Mr Beades and Mr Ron Van der Velde of Rabobank International, the parent company of ACC, to provide certain information to the bank in return for ACC making an additional €3m loan to Fairlee.

The bank claimed there was consistent failure to provide meaningful and comprehensive information and, because of that, the bank had resumed charging interest.

The core issue in the case was whether ACC Bank is entitled to judgment for the loans advanced and it was contending it was so entitled, Mr Murphy said. It was also denying any liability for the damages sought in the counter-claim.

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