Two insurance companies have secured court orders that effectively mean they will not have to pay out multi-million euro claims on foot of many insurance policies taken out by missing solicitor Michael Lynn and his property company because of alleged fraudulent misrepresentation and non-disclosure of material facts.
More than 250 claims against the policies have been made to date by banks and others owed vast sums by Mr Lynn, who has estimated liabilities of some Eu 80 million.
In making the orders against Mr Lynn and his company, Mr Justice Peter Kelly noted the court has yet to determine whether Fiona McAleenan, a solicitor in Mr Lynn’s firm, is entitled to insurance cover relating to any undertakings she signed while working in the practice.
In claiming they were entitled to refuse to pay out on foot of the policies, both companies argued the vast majority of claims related to alleged breach of residential mortgage solicitors undertakings.
They claimed their investigations suggested a practice in Mr Lynn’s firm from at least 2003 of providing mutliple undertakings relating to the same property but this practice was not disclosed to them.
The companies also claimed the defendants must have been aware they would not be able to comply with undertakings given on foot of the policies. They alleged they were entitled to have declared void two particular policies taken out with them for alleged non-disclosure of material fact by the defendants and also said the policies should be declared void for fraudulent misrepresentation on the proposal form.
Chubb Insurance Company of Europe SA and WR Berkley Insurance Europe Ltd had taken the Commercial Court proceedings against Michael Lynn and Fiona McAleenan, whom the companies described as practising as Michael Lynn & Company, and Overseas Legal and Tax Services Ltd trading as Overseas Property Law.
Yesterday, Paul Sreenan SC, for the companies, applied for orders against Mr Lynn and Overseas declaring the policies void on grounds of failure by Mr Lynn and Overseas to enter any defence in the case. The proceedings against Ms McAleenan, of Betaghstown, Co Meath, will be heard at a later stage.
Mr Sreenan stressed his application was without prejudice to the claims made by Ms McAleenan. He said Ms McAleenan was defending the case on the basis she was not a partner in the firm and the insurance policy was a composite policy, not a joint policy.
In making the orders against Mr Lynn and Overseas, Mr Justice Kelly said the companies were entitled to have the policies declared void ab initio (from the beginning) because of non-disclosure of material facts and fraudulent misrepresentation on the part of Mr Lynn and Overseas.
