Solicitor must compensate bank for €250k loan cheque

THE Supreme Court has ruled a solicitor must compensate a bank because he released to a client a €250,500 loan cheque from the bank to buy lands in breach of an undertaking to first obtain a priority charge in favour of the Bank over the property.

However, because Bank of Ireland Mortgage Bank (BOIMB) itself negligently provided loan facilities in August 2003 on the basis of an overvaluation of the lands at Banane, Meelin, Newmarket, Co Cork, the court ruled it was not appropriate to order the solicitor to repay the Bank the full €250,500 amount of the loan monies released and instead directed the case return to the High Court to assess what compensation is due.

The court had heard a bank approved valuer in autumn 2003 valued the lands, described as “a rushy field with a labourer’s cottage” in remote Co Cork, at €295,000 and they were valued in June 2006 at €140,000.