A High Court judge has refused to make a summary order requiring Brid Murphy, wife of solicitor Michael Lynn, to repay Bank of Scotland Ireland (BoSI) a €3.85 million loan advanced to the couple to buy a home in Howth. There should instead be a full trial on the issue, the court directed.

Mr Justice Peter Kelly ruled yesterday that Ms Murphy is entitled to make a case in a full hearing that the bank's practice of trusting solicitors' undertakings was "inherently risky" and that BoSI had a duty to carry out checks before issuing the Howth loan, as those checks would have established that loans given by the bank to Mr Lynn from 2004 were on foot of undertakings that had not been honoured.

He found Ms Murphy had established a triable issue on the basis of her claim that the bank's failure to run any checks in relation to several substantial sums lent to Mr Lynn from 2004 had left her exposed to summary judgment for €3.85 million.

Ms Murphy claims that had checks been run, BoSI would have established that undertakings relating to previous loans to Mr Lynn in 2004 and 2005 were not honoured and, consequently, it would never have lent the couple the €3.85 million sum in April this year.

The judge said the test Ms Murphy had to meet was to establish she had an arguable case. He believed she had made out such a case in relation to the bank's handling of the earlier loans to Mr Lynn.

She was entitled to an opportunity to call banking experts in an effort to support those claims. The court could not say at this stage whether her claims would be rejected or accepted.

An expert might say that the standard practice of banks in trusting solicitors' undertakings was "inherently risky", he said.

On that basis, he refused BoSI's application for summary judgment against Ms Murphy.

Bank of Scotland had recently secured judgment against Mr Lynn himself for €3.85 million in relation to the €3.85 million loan advanced to himself and his wife to purchase Glenlion House, Thormanby Road, Howth. The couple had intended that property as their family home but it is now up for sale.

BoSI had also secured judgment against Mr Lynn for a further €1.9 million in relation to other loans advanced. Mr Lynn had not opposed either application for judgment.

The bank argued Ms Murphy was also liable to repay the €3.85 million loan but Ms Murphy resisted that on several grounds.

In submissions yesterday, Caroline Costello, for BoSI, argued the bank does not owe any legal duty to borrowers.

She argued that the difficulties that had arisen relating to the loan were not as a result of any improper assessment of Mr Lynn's ability to meet repayments of some €14,000 monthly on the loan and could not have been foreseen prior to the collapse of the "house of cards".

In his decision, Mr Justice Kelly said that, before her marriage, Ms Murphy was a clinical nurse manager earning €46,000 a year and it took "no imagination" to conclude BoSI would not have lent her personally some €3.85 million. It was clear the loan was advanced because of the perceived financial standing of her husband, the judge said.

It was also clear Ms Murphy had no legal training and that, when the loan was agreed last April, she was undergoing medical procedures and had left financial matters to her husband.

Meanwhile, Mr Lynn will today face another application for judgment against him. Anglo Irish Bank will this morning seek orders requiring him to repay sums of €7.1 million in proceedings before the Commercial Court. Mr Lynn's practice has been closed by the Law Society. He is accused of taking out multiple mortgages on the same properties. From documents given to the Law Society by Mr Lynn, it has emerged that he has assets with an estimated value of more than €52 million.