ALLIED IRISH Banks has told the Commercial Court it is not contending that businessman Philip Lynch and his family are liable for all of the AIB debts of developer Gerry Conlan arising from a mortgage related to a €25 million land deal in Waterford.
AIB is however claiming the Lynch family has a liability for a €25 million loan facility provided to them and Mr Conlan to buy development lands in Waterford.
Michael Collins SC, for AIB, made the clarification yesterday after earlier suggestions that a mortgage related to an €25 million AIB loan facility for the Waterford deal appeared to make the Lynch family liable for all the debts of Mr Conlan to AIB.
In evidence yesterday, Eileen Lynch, her daughters Philippa and Therese, and her son Paul all said they would not have become involved in the deal if they believed AIB had any personal recourse to them over the €25 million loan and added they did not consider they owed AIB that sum.
Paul Lynch said he had expressed concerns at a family meeting in late January 2007, before the loan facility was signed on February 8th, 2007, about getting involved in property deals because he was sceptical about the Irish property market. He said he was assured the deal involved no risk, the €25 million loan was secured on the lands only and was a case of “hand back the keys”.
Therese Lynch became distressed as she told the court her family were very prudent and her father would not do anything risky. She had never believed there was any risk associated with the Waterford deal, she said.
Evidence on behalf of the Lynch family concluded yesterday in their action aimed at preventing AIB pursuing them individually over the €25 million loan. The family claim the loan was advanced on a non-recourse basis.
The action is against AIB and solicitors LK Shields and Matheson Ormsby Prentice. The family allege negligence by the solicitor defendants in relation to alleged advice concerning the deal and are claiming indemnities. The defendants deny the claims.
After evidence for the Lynch side concluded yesterday afternoon, Michael McDowell SC, for the Lynches, said he was applying for a dismissal of AIB’s counterclaim in which the bank sought €25 million orders against the six Lynch family members. He argued that there was no evidence to support that counterclaim and to show the money was due and owing.
In not calling evidence, AIB was seeking to shield a bank official who was contacted by an agent of Mr Conlan on February 7th, 2007, and agreed to delete a special condition in the loan facility related to recourse, Mr McDowell also said.
If his application succeeded, the plaintiffs succeeded and the only issue was costs. John Gleeson SC, for LK Shields, supported Mr McDowell’s application.
Mr Justice Michael Peart will rule on Tuesday on the application to dismiss the counterclaim.
