Appeal court upholds €3.3m judgment over unpaid home loan

Developer’s estranged wife fails in challenge over family home in Foxrock in Dublin

A developer's estranged wife has failed to set aside a bank's €3.3 million judgment against her arising out of an unpaid loan on the family home in Foxrock, Co Dublin.

The case concerned a "substantial" house – "Hillside" on Westminster Road – into which Karen Tracey had moved with her two children at the end of 2006. Her marriage to developer George Tracey broke down in 2004 and he moved to Mullingar.

The Traceys previously lived in another house in Foxrock, which they sold for about €1.8 million. This money, along with a €3.7 million loan from AIB, was used in the purchase of Hillside for €6.6 million.

The High Court, in giving summary judgment for €3.3 million to AIB in March 2013 against Mr and Mrs Tracey, said there was no doubt that Mr Tracey bought Hillside with the intention of providing secure accommodation for Mrs Tracey and the children.


Mrs Tracey had asked the Court of Appeal to set aside the High Court summary judgment order, arguing she had a bona fide defence to AIB’s claim for judgment.

She claimed the High Court erred on a number of grounds. These include that certain features of the loan distinguished it from a normal residential mortgage, including the amount of €3.7 million, and the fact it was initially repayable over an eight-year period, later changed to 20 years.

The loan was one of a number of purely commercial loans made by AIB for Mr Tracey’s property business, and liability for repaying them rested with him, it was argued.

Mr Justice Michael Peart, giving the unanimous decision of the three-judge appeal court, said the High Court judge was correct in concluding that Mrs Tracey's case did not meet the threshold for sending it to full hearing.

Accepted loan

The fact Mrs Tracey accepted that she signed the acceptance of the loan agreement was a critical factor, he said. Mrs Tracey had taken advice in relation to the sale of the previous family home and the purchase of Hillside from her own solicitor, the judge said.

For her to now assert it was always understood by her and the bank she would not be liable for the loan was inconsistent with the terms of the facility letter signed by her, he said.