Couples get stay on €3m ACC judgment

TWO couples have secured a six-month stay on a judgment for €3.27 million obtained against them by ACC Bank over an unpaid property loan after a High Court judge said he was “sympathetic” to their fears.

Those concerns relate to the bank moving immediately against the couples’ assets, including their family homes.

Mr Justice Peter Kelly also awarded the couples one third of their legal costs against the bank because of the “unusual circumstances” of the case, including ACC’s conduct of it, particularly its delay telling them it had evidence their signatures on a particular loan document were forged.

The defendants had a sense of grievance about how the case was conducted, particularly because they were sued under a loan instrument they had not executed, he said. It was only when the bank opened the case it told them it was not relying on that instrument but they were not told that prior to trial.

The defendants should not have been left in that situation and were entitled to some of their costs against ACC, he said.

The judge last week referred the papers in the case to the DPP, including the document with the forged signatures, plus a P60 falsely certifying a much higher rate of pay for one of the defendants, retired Garda George McGrath. Two bank officials had left ACC after these and other matters were raised with them by the bank.

ACC had sought judgment against George and Evelyn Fahey, Rakerin, Gort, Co Galway, and George and Catherine Mc Grath, Srah Cross, Loughrea, Co Galway, over a loan of €3.27m to them in 2006 to buy a site at Moore St/Bride St, Loughrea. Mr Fahey and Mr McGrath were said to have substantial property interests and ACC advanced the loans on the basis of their being of significant net worth, assessed in January 2008 as some €25.86m.

ACC initially sought judgment for some €4.5m, but, as that higher claim depended on the authenticity of the loan instrument with the forged signatures, it reduced its claim to €3.27m, the actual sum loaned.

The defendants accepted they received the €3.27m but yesterday sought a two-year stay on the judgment order, plus their costs, on grounds of ACC’s conduct.

Counsel for the defendants said they wanted the two year stay in the hope the property market might improve in that time and the Loughrea site value would increase. They were prepared to hand that site over to ACC and also owned “some nice properties” which they wished to sell but could not get any buyers.

Rossa Fanning, for ACC, objected to a two year stay. ACC was not seeking its costs against the defendants despite having secured judgment, he said, and asked for no order on costs, meaning each side pays their own.

Mr Justice Kelly said the defendants had argued cogently for a stay but there was no basis for a two year stay in the hope of a recovery in the property market. Given his experience in the Commercial Court, he said that t was a “forlorn” hope.

It had been hoped to sell on this site but that had not happened and the property market was “effectively dead“, he added.

However, the judge said, he would allow a six month stay because he was sympathetic to the defendants’ argument ACC should not be allowed move immediately against their assets, including their family homes. The six months would give time to see if the bank and the defendants could reach agreement.

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