Couples secure six-month stay over €3m loan

TWO COUPLES have secured a six-month stay on a judgment for some €3.27 million obtained against them by ACC Bank over an unpaid property loan after a High Court judge said he was “sympathetic” to their fears about the bank moving immediately against their assets, including their family homes.

Mr Justice Peter Kelly also yesterday awarded the couples one third of their legal costs against the bank because of the “unusual circumstances” of the case, including ACC’s conduct of it, particularly its delay in telling them it had evidence their signatures on a loan document were forged.

The defendants had a sense of grievance about how the case was conducted, particularly because they were sued under a loan instrument they had not executed, he said. Only when the bank opened the case did it tell them that it was not relying on the instrument, but they were not told this prior to trial.

The defendants should not have been left in that situation, and were entitled to some of their costs against ACC, he said.

The judge last week referred the papers in the case to the DPP, including the document with the forged signatures, plus a P60 falsely certifying a much higher rate of pay for one of the defendants, retired garda George McGrath. Two bank officials left ACC after matters were raised with them by the bank.

ACC had sought judgment against George and Evelyn Fahey, Rakerin, Gort, Co Galway, and George and Catherine McGrath, Srah Cross, Loughrea, Co Galway over a loan of €3.27 million to them in 2006 to buy a site at Moore Street/Bride Street, Loughrea. Mr Fahey and Mr McGrath were said to have substantial property interests, and ACC advanced the loans on the basis of their being of significant net worth, assessed in January 2008 as some €25.86 million.

ACC initially sought judgment for some €4.5 million but, as that higher claim depended on the authenticity of the loan instrument with the forged signatures, it reduced its claim to €3.27 million, the actual sum loaned.

The defendants accepted they received the €3.27 million, but yesterday sought a two-year stay on the judgment order, plus costs, on grounds of ACC’s conduct.

Counsel for the defendants said they wanted the two-year stay in the hope that the property market might improve in that time and the Loughrea site value would increase. They were prepared to hand the site over to ACC, and also owned “some nice properties” which they wished to sell but could not get any buyers.

Rossa Fanning, for ACC, objected to a two-year stay. ACC was not seeking its costs against the defendants despite having secured judgment, he said, and asked for no order on costs, meaning each side pays their own.

Mr Justice Kelly said there was no basis for a two-year stay in the hope of a recovery in property. This was a “forlorn” hope.

He said he would allow a six-month stay. The six months would give time to see whether the bank and the defendants could reach agreement, whether that involved return of the site or otherwise.