Bank takes case against Lynn clients

A couple who were clients of missing solicitor Michael Lynn are facing proceedings by a third bank over loans issued to them to buy properties in relation to which Mr Lynn allegedly gave multiple undertakings. The couple have to date been ordered to repay more than €3.6 million in loans to two other banks.

Last March, Aer Corps officer John Mulkearns and his wife Lorna, of Iona Road, Glasnevin, Dublin,were ordered by Mr Justice Peter Kelly at the Commercial Court to repay €1.6 million loaned to them by IIB Homeloans Ltd to buy six properties in relation to which Mr Lynn is claimed to have given multiple undertakings.

That order followed proceedings in January in which Bank of Ireland Mortgage Bank secured judgment for more than €2 million against them in relation to other loans secured on the same properties.

In the latest proceedings, admitted to the list of the Commercial Court today by Mr Justice Peter Kelly, Permanent TSB is seeking orders against Mr Mulkearns requiring repayment of a loan of €1.2 million.

In separate but related proceedings, it secured judgment yesterday for a sum of €260,000 against both Mr and Ms Mulkearns, who did not contest the application.

The bank claims it advanced a €1.2 million sum to Mr Mulkearns to invest in properties on his undertaking to provide security in the form of the house at Iona Road, Glasnevin, Dublin. It claims Mr Mulkearns failed to put in place the required security over the property and also failed to diclose that he was not the sole owner of the property but that it was in the name of himself and his wife.

The bank wants orders requiring Mr Mulkearns to execute a first legal charge in its favour over Iona Road. Ms Suzanne Boylan, for Mr Mulkearns, indicated in court today that Mr Mulkearns would contend that what is involved in the case is a mortgage on a family home, Iona Road, which is in arrears.

The bank has brought a number of proceedings. One set of proceedings is against Mr Mulkearns himself, a second set is jointly against Mr and Mrs Mulkearns, who are separately represented and a third set is against the couple, Ms Fiona McAleenan, a solicitor in Mr Lynn’s firm with an address in Bettystown, Co Meath, and Mr Lynn himself.

In its claim against Ms McAleenan, the bank claims that she, acting in her capacity as Mr Mulkearns’ solicitor, had failed to honour undertakings that she would not negotiate the loan cheque unless Mr Mulkearns had good marketable title to the property and had executed a charge over it in favour of the bank. It claims Mr Lynn is vicariously liable for the alleged acts and omissions of Ms McAleenan and it is seeking compensation and damages from both Ms McAleenan and Mr Lynn

The judge said he would deal with the bank’s application for judgment against Mr Mulkearns for €1.2 million on June 9th next and he adjourned the proceedings against the couple, Ms McAleenan and Mr Lynn for directions in July.

In the third set of proceedings, the judge ordered the couple to repay to the bank a sum of €260,000, plus interest, loaned in September 2005 and secured on a property at Hillcrest Park, Lucan, Co Dublin. The bank claimed the security was not put in place as agreed and that the couple had offered the same property as part-security to three other credit institutions.

Mr Lynn had acted as the couple’s solicitor in relation to that transaction and had breached his solicitors’ undertakings in relation to their borrowings, the bank alleged. This had led to a situation where the Hillcrest Park property was the subject of multiple loans all secured on solicitors’ undertakings, it claimed.