Property developer fears family home may be repossessed

A property investor fears an attempt by receivers to take possession of three houses in south Dubin owned by himself and his wife will lead on to moves to repossess their family home, the Commercial Court heard.

Shay O'Donoghue and his wife Paula, Coach House, Nerando Road, Dalkey, had obtained €6.8 million loans from the former Anglo Irish Bank between 2007 and 2010 to buy two houses on Castlepark Road, Sandycove, and a third at Cunningham Road, Dalkey.

Their combined value today is around €4 million, according to LSREF III Stone Investments, a fund that bought the loans from Anglo’s successor, IBRC.

Security for the loans was from the three properties and from the couple’s family home at Nerano Road.

Stone Investments claims Mr O’Donoghue now owes €8 million arising out of failure to repay the loans.

Declan Taite and Sharon Barrett were appointed receivers over the three properties, which are rented out, as part of efforts to recover the debt.

In proceedings against Stone and the receivers, Mr O’Donoghue challenged the validity of the appointment of the receivers. His application for an injunction was adjourned after the receivers undertook not to take steps to sell the properties pending further order.

Mr O’Donoghue says the family home forms part of the security over the loans and he claims Stone has failed to comply with the Central Bank’s code of conduct on mortgage arrears. The code requires lenders to take certain steps to deal with arrears before taking legal action.

Stone says Mr O’Donoghue’s claim is entirely misconceived because the receivers have not been appointed over the family home.

Stone and the receivers had applied to have the case admitted to the High Court’s fast-track commercial list.

Stephen Dowling BL, for Stone and the receivers, disagreed with a suggestion by Gary McCarthy SC, for Mr O’Donoghue, the matter should go to mediation.

Mr Dowling said there had already been substantial engagement with Mr O’Donoghue which had not proved “fruitful” and his side wanted the case dealt with by the Commercial Court as soon as possible.

Mr Justice Brian McGovern admitted the case to the Commercial Court and returned it to the end of next month.