A judge is among 45 “white collar investors” behind the Laurels apartment development in Dundrum, Co Dublin, which has defects that have rendered it “uninhabitable”, the High Court was told yesterday.
"It is a sort of Priory Hall-type scenario," a barrister for Bank of Scotland said in a case where the bank is seeking a €7.5 million judgment against Wexford accountant and property developer Alan Hynes and his wife, Noreen. The money was granted in relation to developments in Dublin and Wexford.
Mr Justice Brian McGovern ruled in favour of the bank when it said a counterclaim from the couple should not include matters concerning two other Bank of Scotland loans – for €40.7 million and €7.6 million respectively – with which the couple are connected.
Partnership
This is because the €40.7 million loan, which was for the Laurels development in Dundrum, involved
Noreen Hynes
and 44 other members of a partnership, and the €7.6 million loan, which was for a development on Castlepark Road, Dalkey, involved Ms Hynes and three other investors.
Joining these loans to the case would hugely delay and extend the size of the proceedings against Mr and Mrs Hynes, said Declan McGrath SC, for the bank. In the case of the Dalkey loan, it had been sold to Deutche Bank, which would further complicate matters. Also, examining the claims being made in relation to the Laurels being a “fire hazard” would open up “a huge new area of controversy”.
Mr Justice McGovern said it was “inconceivable” that the court could consider the Dundrum and Dalkey loans without allowing the other parties involved the right to be heard.
Mr Hynes, who was representing himself in court, said that, in relation to the Dundrum development, the bank was taking proceedings against 39 of the investors but not his wife. He said the people concerned were “white collar investors”, such as dentists, accountants and solicitors. “There’s one judge as well.” Mr Hynes said there were “reasons” why the bank was not pursuing his wife.
He said it would be prejudicial to him and his wife if the Dundrum and Dalkey loans were not part of the case as the property for which the €7.5 million loan was issued featured in statements of net wealth given to the bank when the other two loans were being taken out.
Separate loans
Mr Justice McGovern said Mr Hynes was not a borrower in the case of the Dundrum and Dalkey loans. He said they were separate loans involving separate properties.
Mr McGrath said the bank had personal guarantees from the members of the partnership involved in the Dundrum loan, limited to an amount of €215,000 each, in relation to the principal issued. However, the investors were also jointly and severally liable, without limit, for the interest on the loan.
Mr Hynes said it was part of his and his wife’s counterclaim that they were seeking damages from the bank for the losses they incurred on their overall property portfolio, arising from the way the bank had conducted its dealings with them. The couple are denying the bank’s claim that they owe it €7.5 million.
The bank had initially sought a summary judgment for €7.5 million but after a review it was put down for a hearing. The hearing is expected to take place later this year.
