Couple owed €246k after not making repayments since 1990s

A couple face losing their home after the High Court ruled that the Irish Bank Resolution Corporation is entitled to an order for possession of the property arising out of their failure to repay a loan advanced to them in 1990s.

Mr Justice John Hedigan yesterday said that IBRC was entitled to an order for the possession of Patrick and Patricia Raftery’s home at Cloonbrackna Court, Roscommon, over their failure to repay €246,000 arising from a £69,000 loan taken out to buy an investment property.

Most of the sum claimed is interest. The couple intend to appeal yesterday’s ruling to the Supreme Court.

IBRC, the state-owned bank formed after Anglo Irish Bank and Irish Nationwide Building Society were amalgamated and nationalised, sought the order arising from a bridging loan allegedly advanced to the couple by Irish Nationwide in Dec 1991.

In an indenture of mortgage agreement entered into between the parties in Nov 1992, IRBC claims the couple agreed to repay the £69,000 loan and to put up the family home as security.

In a counterclaim, the couple claimed the bank acted in breach of its fiduciary duty towards them. However, in his ruling, the judge dismissed their counterclaim.

Seeking the order, IBRC said the loan was advanced to the couple to go towards their purchase of a property known as The Hob in Charlestown, Co Mayo, incorporating a coffee shop, post office, and licenced premises. Arising from their failure to repay the loan in 1996, Irish Nationwide took possession of the Co Mayo premises and sold it for £72,500.

IBRC said an outstanding amount on the original loan, including interest, continued to accrue and was not repaid. It claimed as of July, the couple owe more than €246,000 and it was entitled to an order for possession of the house.

In separate defences, the couple denied failing to repay the loan as claimed and that loan agreements relied upon by IBRC were not valid and breached the 1976 Family Home Protection Act.

They also argued the bank sold the Mayo premises and its publican’s licence for much less than its market value which was bought in 1991 for a total £86,000.

They further claimed the bank was negligent and acted in breach of contract and of its duty towards them by failing to obtain the best market price when it sold the investment property in Co Mayo.

In his ruling, Mr Justice Hedigan held that the mortgage was valid. It was “plainly evident” that the mortgage was executed by the couple, and they had both signed the agreement with the bank, he said.

The couple, he said, were represented by a solicitor and both committed themselves to repaying the loan. The judge said that it was “remarkable” that not one repayment on the loan was ever made.

The judge said that Section 3 of the 1976 Family Protection Act did not apply in this case as both the Rafterys were parties to the loan agreement.

In rejecting their counterclaim, the judge said the couple had “manifestly failed” to show that the investment property was sold at a price “below the scale”.

At the time of sale the premises was not trading and was all but derelict, the judge noted.