A HIGH Court judge has expressed sympathy for “unfortunate” house buyers whose title to their homes on a Co Roscommon development is now in doubt.
Bank of Ireland has secured charging orders over the property to try to recover a €1.78 million judgment against the developer.
Mr Justice Peter Kelly was told the bank had a charge over the lands at Tarmonbarry, on which 15 houses have been built, arising from loans made by it to developer Michael Macken.
Nine of those houses have been sold but, it is alleged, the purchasers do not have title because a legal firm acting for Mr Macken, Bruce St John Blake Co, failed to honour an undertaking to pay Bank of Ireland the house purchase monies of some €1.78 million so as to release the bank’s charge over the properties.
Instead, it is claimed, the solicitors paid those monies to Mr Macken. The solicitors have said they do not have the funds and are not expected to defend legal proceedings against them later this month over alleged breach of the undertakings, Maurice Collins SC, for the bank, said.
Mr Justice Kelly yesterday ruled the bank was entitled to charging orders against Mr Macken and his wife Patricia Watson over the lands at Tarmonbarry.
Because of the situation of the affected home owners, whom he described as in “a miserable position”, the judge said the bank acknowledged it was inappropriate at this stage to also seek the usual orders consequential on charging orders, including orders allowing the bank take possession of the property with a view to selling it to discharge its debt.
He noted the bank was prepared to have the matter adjourned to July 27th to be heard along with the proceedings against the solicitors on foot of an undertaking any monies secured in those proceedings would be used to discharge the developer’s debt.
The judge said he had sympathy for these unfortunate home owners who had bought the houses in good faith and paid the sums due to the solicitors acting for the defendants, accepting the solicitors’ undertaking to lodge the monies to Bank of Ireland so as to obtain release of the bank’s charge over the properties.
It seemed clear the monies were not paid to the bank but to the defendants, the judge said.
Neither Mr Macken nor Ms Watson, Sorrento, Creagh, Belanamulla, Athlone, Co Westmeath, were in court yesterday and they were not represented.
Bank of Ireland last month brought the action seeking orders that the €1.7 million sum owed to it stood “well-charged” against the Tarmonbarry property. Of the nine houses sold, one was bought by the defendants themselves.
The bank said it was unaware throughout previous High Court proceedings, which culminated in the bank getting judgment of some €1.3 million on July 28th 2008, that any sales within the development had been completed.
The bank said payments totalling some €1.78 million arising from those sales were made to Bruce St John Blake Co, between April 2006 and February 2007. It was of “considerable concern” that the sale of nine units appeared to have been substantially completed between April 2006 and February 2007 and that the solicitors’ firm had confirmed they did not hold any funds related to the development.
The bank claims some €1.7 million is now due to it both under the judgment and other alleged liabilities of the defendants related to loan facilities granted to two limited liability companies, Elaborate Homes Ltd and Pharma Plaz Ltd, both with registered offices at Main Street, Athlone.
Several people who entered into contracts to buy were notified of the bank’s claim and were represented in court. Peter Bland, for the owners, did not oppose the charging order but asked that no consequential orders be made pending other proceedings.
Permanent TSB, which financed the purchase of some of the houses, has also said it is bringing a legal action.
