A bank has brought a legal action seeking an order requiring an Air Corps officer and his wife to repay loans of more than €2 million secured on properties allegedly the subject of multiple undertakings by missing solicitor Michael Lynn. The couple were clients of Mr Lynn.
Bank of Ireland Mortgage Bank claims they were told the loans were to clear several existing mortgages with other banks, to repay Mr Lynn €200,000 and to buy five properties in Bulgaria from Mr Lynn's company, Kendar Holdings Ltd.
The bank's proceedings against John Mulkearns and Lorna Farrell, of Iona Road, Glasnvein, were admitted by Mr Justice Peter Kelly yesterday to the list of the Commercial Court. Counsel for the defendants, who were separately represented, said they needed time to put in replying affidavits and to examine Law Society files in the proceedings against Mr Lynn.
The judge made directions for the exchange of legal documents and adjourned the case to January 21st.
The bank claims it made a loan offer to the couple in February 2006 of some €2 million and that the couple drew down the money in March 2006.
According to the bank, the couple said the loan was to clear mortgages of €382,500 to Bank of Scotland over a property at 15 Weston Crescent, Lucan, Co Dublin; €380,000 to clear an Irish Nationwide Building Society mortgage over a property at 1 Hillcrest Park, Lucan; €260,000 to clear a Permanent TSB mortgage over a property at 1A Hillcrest Park, Lucan; and €300,000 to clear ACC mortgages over two properties, Nos 8 and 13, Cluain Bui, Liscara, Carrick on Shannon, Co Leitrim.
The couple also said the loan was to repay some €200,000 owed to Mr Lynn and €493,5000 to be invested in five apartments in Bulgaria through Kendar Holdings Ltd.
The bank said the mortgage loan offer was conditional on a first legal charge being executed by the couple over six properties, the five already listed and a further property at 12 Griffith Drive, Glasnevin north, Dublin.
However, after seeing on November 15th last a schedule of properties in proceedings brought by the Law Society against Mr Lynn, the bank had learned that, "wrongly and in breach of the mortgage loan agreement between the parties", the defendants had failed to execute a first legal charge in favour of the bank over the properties.
In light of that alleged failure, the bank claims the defendants are in breach of the mortgage loan agreement, have also failed to meet the agreed instalment repayments and are now indebted to the bank for some €2,047,208, including interest.
The bank had demaded repayment of that sum on November 23rd but it had not been repaid.
In an affidavit, Lynda Carragher, head of credit and risk management with the bank, said it had sought a "meaningful explanation" from the couple as to how it had come about that multiple undertakings, representing multiple loans, had been secured on the properties for which the bank had advanced money.
Ms Carragher said she had obtained information about the various properties in the context of proceedings by the Law Society against Mr Lynn, who had acted as solicitor for the couple.
Given that a similar model of multiple borrowings over individual properties appeared to have been followed in this case as in other proceedings against Mr Lynn, Ms Carragher said she feared the couple would be unable to continue to make the repayments due. There had been no response to the bank's letters of demand, she added.
