ACC gets €6.2m in case against developer

ACCBANK HAS secured a summary judgment order for some €6.2 million against developer Larry O’Mahony over non-repayment of a commercial development loan issued four years ago.

The bank’s application for a similar summary judgment order against developer Thomas McFeely, Ailesbury Road, Ballsbridge, Dublin, will be heard on Friday.

The orders were sought by ACC against both developers yesterday but Mr Justice Peter Kelly, while stating he was “unimpressed” by Mr McFeely’s approach to the litigation to date, said he would allow him until tomorrow to file a replying affidavit and would hear the application against him on Friday.

The loan was issued in April 2005 to repay a €4 million loan to Ulster Bank and to make some €1.89 million available for further development.

It was secured on an apartment development at Blakestown Road, Mulhuddart, Co Dublin; 38 acres owned by Mr O’Mahony at Dunboyne, Co Meath; an assignment of rental income from the Mulhuddart apartments and €500,000 in a deposit account.

The bank moved last March to call in the loan after repayment arrears of more than €600,000 accumulated on it.

Yesterday, Mark Dunne, for Mr O’Mahony, Shrewsbury Road, Ballsbridge, Dublin, resisted the summary judgment application, arguing that his client had made out an arguable defence in an affidavit.

In that affidavit, Mr O’Mahony argued that the loan was a 20-year facility. He also argued that at meetings with ACC representatives, they were told the arrears would be tackled through insurance monies due following a fire at the Mulhuddart premises.

Mr O’Mahony said it was also intended to put the apartments up for sale after they were fully refurbished but that was not possible now due to the state of the property market.

He said he and Mr McFeely had managed to find a new tenant for the apartment block and a letting agreement for his lands in Dunboyne would expire in 2011.

However, the bank had appointed a receiver over the lands and apartments on June 12th last.

Mr O’Mahony also said the bank had given no indication at meetings with the defendants that it was preparing to call in the loan.

Mr Justice Kelly noted a rental agreement for the apartments with a Frank Brady and Pauline Gibson, which yielded €480,000 rental income, had been later assigned to the Department of Justice.

However, following a fire at the apartment complex in 2007, the Minister had terminated the letting agreement until remedial works were carried out. The defendant had said it was hoped to recover some €350,000 under that and put that towards the loan arrears.

The judge said he was satisfied no arguable defence had been made to the bank’s claim and he would enter judgment in the sum sought, plus continuing interest at the Courts Act rate and costs.