ACC case of firm’s breach ruled ‘trivial’ by High Court

ACC Bank abused the courts process by bringing a "trivial" case over a technical breach by a law firm in relation to its duty to register a mortgage on a property, a High Court judge has found.

The bank brought the case against the law firm “as some form of leverage” as a means of making good the loss in value of the property involved due to a downturn in the market, Mr Justice Brian McGovern said.

ACC had also complained to the Law Society, accusing certain solicitors in the firm of Barry & Company, Athlone, of misconduct but the society "did not see fit" to take any steps against the lawyers, he added.

The courts had limited time and resources and should be used for resolution of “genuine disputes” and not for enforcement of “trivial and technical” breaches of solicitors’ undertakings which had not caused any appreciable loss to ACC, Mr Justice McGovern said.

Development site

In 2005, the bank loaned €660,000 to developer Brian Doyle, Kenagh, Longford, for development of sites at Glack, Longford. That loan was paid off from the sale of those Glack sites and later, in 2006, the bank loaned Mr Doyle another €589,000 for another development site at Newtownforbes.

Another €150,000 from the sale of the Glack sites was used to pay down the Newtownforbes loan.

Barry & Co Solicitors acted for Mr Doyle and around the time of the first loan, in December 2005, the firm’s principal, Anthony Barry, sold it to two of his partners, Orla Cummins and Julie Shanley.

ACC initially brought proceedings against all three solicitors but it was later agreed the case should not proceed against Ms Shanley.

ACC sought an order claiming the other two solicitors were guilty of misconduct by failing to comply with undertakings in relation to the loans on the properties.

In his judgment, Mr Justice McGovern said insofar as there were any defects in undertakings given by the firm, or in providing a report to the bank on the certificate of title to the property as soon as practicable, those seemed to be issues “of a purely technical nature” which had not prejudiced ACC.

ACC’s “real problem” was the reduction in the value of its security, not the want of security, he said.