Doctor must provide legal charge over 8,500 sq ft house, court rules

A bank is entitled to an order requiring a retired doctor to provide a legal charge over the "palladian style" 11-bedroom home of himself and his wife arising from a €400,000 bridging loan made to them, the High Court has ruled.

Dr Gerald Stephens and his wife Mary Anne Stephens built Thornhill Manor, Hollymount, Co Mayo, in 1995.

The property extends over 8,500 sq ft, has a 2,000 sq ft three-bed apartment attached to it and sits on a large parcel of land.

€400,000 loan

Mr Justice Paul Gilligan ruled ACC is entitled to an order requiring Dr Stephens to specifically perform an undertaking that Thornhill would be put up as security for a €400,000 loan given to the couple when they decided to sell the house and build another home on adjacent land they had acquired.

Mr Justice Gilligan, in his judgment, said the couple had received an offer of €1.7 million for Thornhill. To build their new home, they got the €400,000 bridging loan from ACC Loan Management Ltd, formerly ACC Bank.

The judge said Dr Stephens initially indicated he would execute a deed of charge over Thornhill after they got the loan.

Did not agree

Subsequently, the Stephens indicated they were not going to sign that deed unless the bank increased the loan to 65 per cent of the value of Thornhill, the judge said. The bank did not agree to this.

In 2008, ACC brought proceedings against the couple and, in July 2012, the High Court ordered ACC could recover about €775,000 from the couple.

There were further proceedings by Dr Stephens against this order, including an appeal which is pending.

In the meantime, the bank pursued its case for specific performance of the contract whereby the couple agreed to give first legal charge over Thornhill.

Dr Stephens argued the bank did not move with expedition in prosecuting its case against him and his wife and maintained the case had already been dealt with under the 2012 judgment proceedings.

Suffered no prejudice

The bank said it did move expeditiously and argued the couple suffered no prejudice or economic injury due to any delay. It also denied the matter at issue had already been dealt with by the courts.

Mr Justice Gilligan found the issue of specific performance in this case had not been previously decided.

The question whether there had been a delay in prosecuting the case by ACC had been dealt with in a previous case in which another judge deemed the reasons put forward by the bank for the delay to be good, he also said.

He also rejected Dr Stephens’s claim the defence of “no transaction” applied to the facts of this case.