PROPERTY DEVELOPER John Kelly has denied he instructed his solicitor Thomas Byrne not to pay off some €8 million loans owed to the Educational Building Society as part of an agreement with IIB Bank to grant Mr Kelly loans of some €9 million.

Mr Kelly, described as the single biggest client of Mr Byrne’s practice, denied suggestions by Sean Ó Siothcain, for Mr Byrne, he would not clear off loans but instead roll them over to buy other properties.

Mr Ó Siothcain said Mr Byrne would say certain borrowings were made to finance Mr Kelly’s “extravagant” lifestyle and that some €1.8 million was paid out to Mr Kelly and his partner over a five-month period in 2006.

Mr Kelly said he had difficulties with Mr Byrne, saying he had an extravagant lifestyle. He agreed with counsel he had a helicopter, a yacht in Marbella, a Bentley and Aston Martin cars, but said some of these were bought on lease.

Mr Justice Frank Clarke yesterday began hearing proceedings in which Mr Kelly is seeking judgment for some €6.1 million against Mr Byrne over the handling of a property deal in Co Wexford.

Mr Byrne, whose practice at Walkinstown Road, Dublin, has been closed by the Law Society and who has been struck off the roll of solicitors, was in court. He has denied claims of converting to his own use loan money of Mr Kelly’s and has counter-claimed for a beneficial interest in the Co Wexford property as well as other properties in Dublin and Greenwich, England.

Mr Kelly, of Hunters Moon, Kilquade, Co Wicklow, alleges he in September 2006 bought for €3 million a 16-acre site with development potential near Oilgate, Co Wexford.

He said he secured a €9 million loan facility from IIB Bank on conditions, including his discharging an outstanding loan to EBS Building Society over properties held by him at James Street, Dublin, and putting in place a first legal charge over those properties in favour of IIB.

He said he instructed Mr Byrne about the financing arrangement and authorised him to carry out all the necessary transactions. He said the €9 million loan money was paid over by IIB to Mr Byrne, who then failed to secure the registration of Mr Kelly’s interest in the Oilgate property and also failed to take steps to discharge the loans from EBS to him or to discharge EBS’ security over the properties at James Street, Dublin.

He said he believed Mr Byrne had paid off the EBS and did not notice direct debit payments continued to be made from his accounts to the EBS.

In opposing the case, Mr Byrne contends there was a partnership arrangement from about 1998.

He also claims he never received any of the profits, that Mr Kelly used profits on one occasion to buy an Aston Martin car and service bank debts, and that, over a period of 10 years, a course of events involved his becoming the victim of Mr Kelly’s “vampire-like demands for capital”.

The case continues.