Bank seeks orders requiring developer to repay €5.2m loans

IIB BANK plc is seeking court orders requiring a property developer to repay loans of some €5.2 million, plus interest, and to deliver up possession of a property in Rathmines, Dublin, used as a grocery store.

The action is against John Kelly, of Hunter’s Moon, Kilquade, Co Wicklow, and Mady Ltd, a company with registered offices at the property at 167 Upper Rathmines Road, Dublin. Mady’s directors include Mary O’Connor, Mr Kelly’s partner.

The defendants plead IIB is not entitled to possession of the premises because, they claim, the bank was aware at all times of Mr Kelly’s intention to fit out the premises as a self-service grocery store and of Mady’s intention to lease it to another party.

They claim the bank acquiesced in that 25-year lease or failed to object to it and the bank is legally prevented from denying the right of Mady to continued peaceful occupation of the premises on foot of the lease dated November 1st 2005.

They also claim the actions of the bank have caused them loss and damage.

Outlining the bank’s case yesterday, Paul Gardiner SC argued that it was incomprehensible his client would have acquiesced in such a lease arrangement as the lease provided for rental income of just €135,000 a year, which sum could not service the €5.9 million loans to Mr Kelly, granted in August and September 2005.

The bank was never told of nor shown the lease until October 2007 and it was the bank’s position the lease was void, counsel said.

The loan monies were drawn down prior to the creation of the lease and, while struck off-solicitor Thomas Byrne who had acted for Mr Kelly in relation to the loan “may be a very bad solicitor”, Mr Kelly and Mady were bound by what was agreed.

The case is expected to run for several days before Mr Justice Frank Clarke.