Man says he is not liable for €3.4m loans
A young man described as “very vulnerable” after suffering two strokes by the age of 10 and being orphaned by age 17 has claimed he is not liable for loans of some €3.4 million made to him in his early 20s, mostly for contract for difference investments (CFDs).
The man, an only child, is said to have a significant medical history. He inherited several properties after his mother’s death and has sued J E Davy, trading as Davy, Bank of Ireland and Bank of Ireland Mortgage Bank.
Mr Justice Peter Kelly said the 27-year-old from Dublin, was seeking declarations that three loan agreements entered into by him when he was aged 20-22, between 2005 and 2007, are void on grounds alleging they were procured by unlawful conduct of the defendants, including breach of contract, breach of duty, negligence, misrepresentation and conspiracy.
Lyndon MacCann SC, for Davy, on consent of the other parties, yesterday secured orders transferring the case to the Commercial Court.
Due to issues including matters related to the man’s health, additional time was allocated for exchange of legal documents, including a statement of claim. Mr Justice Kelly returned the matter to May.
In an affidavit, Brian McKiernan of Davy said the case related to loans made by Bank of Ireland to the man between 2005-2007 for €600,000, €1.64 million and €1.2 million secured on four properties.
The man first opened an account with Davy in 2005 and the firm, acting on his instructions, transmitted trades to CFD providers, Mr McKiernan said.
Contracts for difference are a financial product in which the investor takes a gamble on the stock going either up or down in value.
A second account also related to CFDs, while a third account was unrelated to CFD trading. When he opened the accounts, the man had a substantial property portfolio estimated in 2006 to be worth €10 million, he said.
Mr McKiernan said the man was regularly warned by Davy of the risks associated with CFDs but demonstrated a “significant appetite for risk” which was extensively documented in Davy’s files. The man made no complaint to Davy before this case was initiated, he added.
Mr McKiernan said Davy had no liability in this matter and would “strenuously defend” the case. The man presented himself as “a wealthy investor” with previous experience in property investment who wished to make speculative investments in CFDs.
In an affidavit, Mary Lou Cronin, solicitor for the man, said his mother and father died when he was aged 12 and 17 respectively and he had no other family, except distant relatives. He suffered from developmental problems and difficulties include chronic fatigue, panic attacks and depression.
Ms Cronin said she believed the man was insecure, isolated and very vulnerable. A medical report had described him as “significantly impaired” looking after his financial affairs due to a slowness of thought and concluded he was incapable of earning a living.