ACCBANK IS suing its former solicitor for a potential €12 million damages over his alleged failure to put in place necessary securities for commercial loans made by the bank to a man over a five-year period for property and other investments.
The bank is suing Brian Johnston, practising as Brian Johnston Co Solicitors, Park Street, Dundalk, Co Louth, for alleged negligence related to his alleged failure to put in place securities for loans advanced to Francis Tiernan, Longfield Road, Forkhill, Newry, Co Down.
Loans of €12 million made to Mr Tiernan from 2004 remain unpaid and the bank has taken separate proceedings against Mr Tiernan for repayment. The loans were advanced by ACC’s branch at Park Street, Dundalk, Co Louth, and include a €7.6 million loan of July 2006 to buy lands at Naas.
Mr Justice Peter Kelly yesterday admitted the separate proceedings by the bank against Mr Johnston and Mr Tiernan to the Commercial Court list.
Bernard Donleavy, for ACC, said the action against Mr Johnston was a solicitor’s negligence claim for a very significant sum.
The delay in bringing the case was due to the bank having initially tried to pursue the matter with the Law Society, he added.
Mr Johnston is facing a potential claim for damages of €12 million if the bank is unsuccessful in its action against Mr Tiernan, Mr Justice Kelly observed. He also noted a letter from the bank to the Law Society of November 13th, 2008, had not yet been replied to.
Counsel for Mr Johnston said she might apply to join a third party to the action.
The bank claims it appointed Mr Johnston in late July 2006 to act for it relating to various dealings with Mr Tiernan.
It claims the defendant had subsequently confirmed on various dates in 2006 and 2007 that various security requirements were in place in relation to loan facilities which the bank advanced to Mr Tiernan. Among the claims is that Mr Johnston had confirmed on August 15th, 2006, that there was confirmation from Mr Tiernan’s solicitor of three signed unconditional and irrevocable third-party contracts for sale duly executed between Mr Tiernan and a company relating to various lands, the defendant had certified copies of the contracts for sale and was satisfied with those.
The bank claims the defendant also confirmed that various legal mortgages and charges over lands in Co Louth and at Naas had been fully investigated and there was good marketable title to those properties.
ACC claims it later wrote to Mr Johnston in August 2007 seeking confirmation its security was in place concerning the various loans. In September 2007, Mr Johnston replied the files were being checked. After further letters from the bank, he stated he had met Mr Tiernan’s solicitor and expressed concern certain matters were outstanding.
ACC claims that despite later requests for a “comprehensive” reply from the defendant about its security, no such reply was provided. Mr Johnston had notified it he had reported another solicitor to the Law Society due to that solicitor’s alleged failure to comply with an undertaking to the defendant.
Because it simply did not know what security it had, ACC said it had no option but to itself make a complaint to the Law Society. It appeared Mr Johnson later appeared before the society’s complaints committee and told it he had lodged charges for registration against various lands.
From its own searches, the bank said it appeared no documents had been lodged by Mr Johnston and he had failed to put the necessary securities in place. Mr Tiernan had defaulted on the loans and the bank was left unsecured in relation to his borrowings, ACC said.
