Michael Collins SC, for AIB, said neither Mr Lynch nor his family ever asked AIB for a loan facility that involved the bank having no recourse to them for the €25m sum advanced to buy development lands at Kilbarry in Waterford.
Counsel said various versions of the loan facility documents, issued from December 2006, all involved recourse and there was no dispute that the final version of the loan, signed by the Lynches on February 8, 2007, was a full-recourse facility.
While the Lynches had claimed they were induced to sign that final document as a result of negligent misrepresentation by AIB and two firms of solicitors, counsel said there was no evidence that AIB misrepresented the nature of the loan.
Within two hours of releasing the final loan letter, at about 4pm on February 7, 2007, AIB realised an error had been made, in that the inclusion of a special condition providing for recourse to Mr Lynch and Mr Conlan did not reflect the bank’s position.
On the advice of AIB’s solicitors, A&L Goodbody, AIB had that special condition removed from the final loan document so as to have recourse to all the borrowers — Mr Lynch, his wife and children and Mr Conlan.
That change was effected because there was an inconsistency in specifying two borrowers out of six and AIB’s concern was to ensure recourse to all borrowers.
An AIB official made the nature of the final loan facility document clear to law firm Matheson Ormsby Prentice (MOP).
On January 15, 2007, it was indicated Mr Lynch wanted to add his children as borrowers and it was clear that, if the children were added to the loan, it would be on the same terms and conditions.
Counsel was making closing submissions in the action brought by Mr Lynch, his wife Eileen and four children in an effort to avoid AIB pursuing them over the €25m loan.
The family allege AIB and two law firms — LK Shields and MOP — were negligent in to how they dealt with the loan, and contend they are entitled to be indemnified against any claim by AIB against them for repayment.
The defendants deny the claims. AIB contends the loan was full-recourse to all borrowers and is counterclaiming for €25m judgement orders against the Lynches’ and, in separate proceedings, against Mr Conlan.