ACC entitled to judgment of €2m over couple’s failure to repay loan

THE High Court has ruled that ACC is entitled to a judgment of almost €2 million from an estranged husband and wife over their failure to fully repay a property loan.

In his judgment, Mr Justice Frank Clarke ruled that the bank was entitled to the sum it had claimed against Ann and Frank Kelly, Highbury, Rathmullan Road, Drogheda, Co Louth.

The couple had been teachers for many years but over the last decade Mr Kelly got involved in the property business.

The Kellys built up a significant portfoilio of some 30 properties with borrowings from both ACC and Ulster Bank. In its proceedings ACC claimed it was entitled to call in a loan it had advanced to the Kellys in October 2006 after arrears started to build up. In April 2009 the bank called in that loan.

However the Kellys claimed that on the basis of the original loan terms and additional agreements, based on discussions they had with ACC, that the bank was not legally entitled to demand payment of the loan, which it was accepted was owing.

In her defence Mrs Kelly had argued that during the course of certain meetings after arrears started to build up ACC had agreed that if the Kellys took certain steps to improve the condition of the loan it would not be called in.

It was also claimed that the bank had agreed to ringfence the net proceeds of the sale of two of the Kellys properties which ACC had security. The fund was to be ring-fenced in order to cover any shortfall in interest repayments on the loan.

The defendants also argued that ACC had also wrongfully put in a receiver over the Kellys’ properties, that the receiver had acted wrongfully and contested the way in which ACC had added surcharge interest to the loans ACC contested all the Kellys’ claims. It accepted that while discussions had taken place the bank denied that it had entered into any agreements with the Kellys.

However, in his judgment, Mr Justice Clarke held that all the Kellys’ various claims against ACC’s claim “must fail”.

The judge said he was satisfied there was no evidence that any agreement was reached where ACC would not enforce its loan if certain steps, including the sale or properties, were taken.

The judge said that ACC accepted that it would go along with proposals by the Kellys to see if things could improve. He added that there was no agreement that some of the proceeds of sale would be ring-fenced as a contingency fund.