AN ESTRANGED husband and wife who allege “arrogant and unjust” behaviour by ACC Bank in demanding immediate and full payment of property loans have made out an arguable defence to the bank’s claim for €1.8 million summary judgment against them, a High Court judge has ruled.
On that basis, Mr Justice Peter Kelly yesterday directed the action by ACC against Ann and Frank Kelly, Highbury, Rathmullan Road, Drogheda, Co Louth, should go to a full plenary hearing.
Earlier, Ann Kelly, represented by Ross Gorman, claimed that although she and her husband honoured an agreement with ACC to sell two houses in very difficult circumstances in May 2009 to clear arrears in repayments, the bank took the €400,000-plus proceeds of that sale and then demanded full repayment of the entire loan.
Ms Kelly said in an affidavit she had worked full-time as a teacher, and her only involvement with ACC was in December 2006 when she was asked to sign a letter of loan sanction without an opportunity to read it or to get independent legal advice about it. In August 2008, she discovered the loan, while for a term of 25 years, was a commercial loan and an “on demand” facility.
She and her husband had in 2008 a portfolio of some 34 residential investment properties, and one of the reasons for the deterioration of their relationship was her husband’s failure to manage properly that portfolio. He had used rents from tenants to meet costs of maintaining the properties and consequently failed to make mortgage repayments, resulting in a significant building up of arrears, she said.
She and her son then took a more active role in managing the properties, and ACC had in August 2008, she alleged, said it would not call in the full loan if the arrears were cleared.
On that basis they tried to sell units, but the property market continued to deteriorate in 2008 and 2009. In May 2009, they sold two units for €414,055, of which €130,000 was to be used to clear arrears, with the rest to be “dipped” into by ACC to meet any arrears on repayments. However, ACC had simply applied the entire sale proceeds to reduce the loan account balance and eight days later issued a letter of demand for the balance, some €1.8 million.
Frank Kelly, separately representing himself, said he had made complaints about the conduct of ACC to the Financial Regulator and the Competition Authority. He also alleged the bank had overcharged him and his wife for loans.
Mr Kelly, in a letter to ACC in July 2009, said the defendants’ understanding was the loan was offered for a 25-year period. The properties involved were a long-term investment and “not a get-rich-quick scheme for either ourselves or Rabobank”.
Ciaran Lewis, for ACC, argued the complaints by the Kellys did not amount to a defence that could succeed at trial. He denied claims that the bank had reached the alleged agreement with the Kellys for sale of two properties, and claimed they had decided to address the loans as they saw fit.
Mr Justice Kelly said he was satisfied, on the basis of Ms Kelly’s affidavit, an arguable defence had been raised. While there was no documentary evidence of the alleged agreement about the house sale, the fact remained the two houses were sold, he said.
