A couple's family home and farm were not protected from a bank's efforts to recover nearly €5.6 million loaned to them for property and business investment, the High Court has ruled.

Ms Justice Caroline Costello said AIB was entitled to an order adjudicating Michael and Mary Hoare, Circular Road, Bushy Park, Galway, as bankrupts.

The judge rejected their claim AIB gave them the loans on the basis of an assurance their Bushy Park home, and family farm at Moylough, Galway, would not be included in efforts to recover the loans.

Between 2004 and 2010, the Hoares were advanced seven loan facilities to buy and renovate houses in Galway city for letting to students. The money was also given towards Mr Hoare’s construction firm, Dangan Homes, which built houses in Moylough, Mountbellew and the Upper Newcastle Road in Galway.

In 2012, AIB obtained High Court judgment against the couple for about €5.6 million, later confirmed on appeal by the Supreme Court. The bank registered the judgment against their family home and farm and in 2015 issued bankruptcy proceedings. In opposing the bankrupt application, the couple claimed they got assurance their home and farm was “off the table”. Enforcing the debt against the home and farm constituted a breach of promise repeatedly made by AIB, they argued.

Letters

The court was provided with letters from two senior local AIB branch officials when the loans were given, stating both officials understood the bank would not go after the farm and home. The Hoares’ former solicitor also stated AIB promised it would never pursue them for the home or farm under any circumstances.

AIB said there was no documentary record stating loan recovery would be limited to personal borrowings. As a matter of practice, AIB said, assurances of this type would be recorded in the loan facility letter or an accompanying letter.

Ms Justice Costello said the evidence of the Hoares’ local bank official and of their former solicitor was “extremely general”.