Anglo Irish Bank Corporation yesterday began High Court proceedings claiming a Cork couple owe it £145,305 with interest at the bank's prime rate, plus 4 per cent. The couple claim the bank has incorrectly calculated interest.
Mr Denis Joseph O'Brien and his wife, Ms Maeve O'Brien, of Ballyharoon House, Glanmire, Co Cork, deny the claims being made on behalf of Anglo Irish and the Ulster Bank Trust Company.
Mr Ian Finlay SC, for the banks, told Ms Justice Macken the O'Briens entered into a mortgage on April 21st, 1981, with Ulster Bank Trust Company for £30,000, secured on their home. When that advance was not repaid the Ulster Bank got a possession order for the O'Brien home in September 1990.
A year earlier the O'Briens had become customers of Anglo Irish Bank and got £165,000 for a development project involving the acquisition of 40 acres of land at Edenfell, Carrigaline, Co Cork, counsel said. The rate of interest was the bank's prime rate plus 4.5 per cent.
On March 22nd, 1991, the debt owed to the Ulster Bank was £63,473, Mr Finlay said. The sheriff arrived at the O'Briens' home. Mr O'Brien telephoned Anglo Irish in Limerick asking if it would resolve their difficulty with Ulster Bank.
Mr O'Brien said his brother-in-law, Mr Patrick O'Sullivan, would be prepared to go guarantor and provide securities if Anglo Irish was prepared to discharge the Ulster Bank debt.
Mr O'Sullivan's securities were accepted, and Ulster Bank was paid. Mr Finlay said Anglo Irish then had the benefit of Ulster Bank's security.
On March 27th, 1991, the O'Briens signed a formal "facility letter" which stated the rate of interest would be the bank's prime rate plus 4 per cent.
In 1992 the bank's 1989 facility to the O'Briens was discharged in full, but the March 1991 facility was not discharged. Anglo Irish made a demand for payment.
Mr Finlay read a letter from Mr O'Brien, dated June 22nd, 1995, to Mr John McDonnell, of Anglo Irish. The letter stated that Mr O'Brien's brother-in-law was seriously ill and was under serious stress because certain bonds given to the bank were "tied up".
Mr O'Brien asked the bank to hold off taking any further steps as far as Mr O'Sullivan's bonds were concerned.
Mr O'Brien claimed Mr O'Sullivan contended (as did the O'Briens) that the original intention of the agreement with Anglo Irish was that the bonds would be cashed within a month of their being handed to the bank and that some £64,000 due by the O'Briens would be taken from the proceeds and the remainder passed to Mr O'Sullivan.
Mr O'Brien said the bank decided not to cash the bonds but instead advanced £64,000 to Ulster Bank, and kept the bonds which, at the time, were worth more than the payment made.
The hearing continues today.