AIB wins €4.2m judgment over loans

THE HIGH Court has granted AIB a judgment of €4.2 million against a Waterford businessman over the purchase of 17 acres of land and the acquisition of a business premises.

Yesterday, Mr Justice Peter Kelly made an order granting the bank judgment for €4,287,742.40 against Thomas Farrell, Greenfield House, Tramore, Co Waterford, over two loans secured from the bank in May and July of 2006.

The court heard the sums loaned to Mr Farrell were €3.74 million to facilitate the purchase of 17 acres of land at Bawnfune, Butlerstown, Co Waterford, and – separately – €235,000 to facilitate the purchase of an industrial unit at the Waterford Business Park, Cork Road, Waterford. The loan to buy the unit was to be repaid in monthly instalments of €1,421 over 20 years.

In relation to the loan for €3.74 million, it was agreed between the parties that there was to be a capital moratorium for five years from the date of drawdown, with interest repayments of €168,000 per annum.

Counsel for AIB, Bill Shipsey SC, told the court Mr Farrell had not repaid a cent of either loan, and had no “bona fide” defence to the bank’s claim. Counsel for Mr Farrell, Marie Baker SC, argued that because of the moratorium on the loan for €3.74 million, the bank was not entitled to seek judgment for that amount.

She said that the agreement in relation to what was a fixed loan lasted until 2011.

In a counterclaim for damages against AIB, aimed at securing a stay on any judgment, Mr Farrell alleged that during a routine audit of his accounts at the AIB in the early 1990s, accounts came to light including 15 that were bogus non-resident. As a result, he became liable to the Revenue for additional sums and penalties which he said forced him to remortgage his business. He said the bank was seeking judgment because of his claims against them. The bank denied Mr Farrell’s claims.

Mr Justice Kelly dismissed the defence’s argument that the AIB was not entitled to judgment of the €3.74 million because of the moratorium.

The bank, he said, was entitled to make a demand for the full sum.

The judge said the defendant had not repaid a cent on the interest of that loan, and therefore Mr Farrell’s “line of defence did not stand up”.