Lynch loses appeal against €26m ruling

The Supreme Court has described as “understated” a finding that businessman Philip Lynch gave “hopelessly confused and unreliable” evidence concerning the circumstances leading to a €25m loan being issued to buy development lands in Waterford.

Lynch loses appeal against €26m ruling

Mr Justice Donal O’Donnell made the comment when dismissing Mr Lynch’s appeal aimed at stopping AIB Banks pursuing him to pay a €26m judgment obtained in 2011, with continuing interest, after failure to repay the loan made to him, his family and developer Gerry Conlan to buy the 86 acres at Kilbarry, valued in 2011 at less than €5m.

However, the three-judge court allowed the appeal of Mr Lynch’s wife Eileen and four adult children — Judith, Paul, Philippa and Therese — to the extent of finding they are entitled to trial of an issue whether the bank is entitled to pursue them for the €26m judgment.

All of the Lynchs previously argued enforcement of the judgment would have potentially “catastrophic” consequences.

Giving the three-judge Supreme Court judgment, Mr Justice O’Donnell said the development deal appeared very attractive in 2007 as it was estimated to quickly produce about €20m profit for the Lynchs with apparently no risk attached.

Before there could be any real risk, there would have to be a total collapse in Irish property values and a “dramatic and total destruction” of the wealth of Mr Lynch and Mr Conlan but it seemed unlikely that would occur.

“We now know better,” the judge said.

The judge said the High Court finding Mr Lynch gave “hopelessly confused and unreliable” evidence he would not have gone ahead with the deal unless the loan was non-recourse appeared “amply justified and, if anything, understated”.

Looked at realistically, the Lynchs’ claim against AIB, particularly Philip Lynch’s, always had remote prospect of success given the terms of the loan documents, he found.

The real claim of the Lynchs, if their evidence was accepted, was against those whom they alleged had failed to properly advise them, or had advised them wrongly, he said.

He disagreed with the High Court the L.K.Shields law firm owed no duty of care to the Lynchs when advising as to the nature of the €25m loan facility.

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