A firm of solicitors is being sued by AIB over its alleged failure to honour an undertaking to ensure the bank had first security over a €3 million property loan made by the bank to a couple who were clients of the firm.
AIB claims Seamus Maguire & Company Solicitors must now return to the bank €3 million paid out to the couple, Alan and Noreeen Hynes, or alternatively comply with an undertaking to provide the bank with a first legal charge or mortgage over property at Moongate, Clonard, Co Wexford.
The bank claims the solicitors had given an undertaking in June 2007, on behalf of the couple, to provide a first legal mortgage over the Clonard property in favour of the bank on foot of which the bank paid out €3 million to the solicitors.
It claims the solicitors had then paid out the money to the Alan and Noreen Hynes, with an address at Tuskar House, John's Gate Street, Wexford, without having first ensured the couple had title to the property. The bank claims it later transpired there was a prior security in favour of Anglo Irish bank over the property and the solicitors should have ascertained that.
The bank claims the couple have defaulted on the loan and, due to the solicitors' failure to perform their undertaking, the solicitors must return the monies paid out.
The bank contends the solicitors' undertaking required them to register the bank's charge over the property and that the bank relied on the firm to examine and disclose any difficulties in relation to title. It claims it had transpired no transfer of title to the borrowers had occurred and the pre-existing security was never paid off.
The proceedings are against Charles James Maguire, Noel McDonald, Richard Clinch and Tommy Gibbons, practising as Seamus Maguire & Co. Solicitors, Main Street, Blanchardstown, Dublin.
When the proceedings were admitted by Mr Justice Peter Kelly to the Commercial Court today, he was told by Paul Gardiner SC, for the solicitors, the issue was wehether his side could secure a position where the undertaking is complied with and his side hoped to be able to comply. The bank may seek damages in any event, counsel added.
Paul Fogarty, for AIB, said his case was the monies should never have been released by the solicitors to their clients in the first place. There had been a huge depreciation in property prices, counsel added.
The judge made directions in the case and listed it again on April 30th.
