Struck-off solicitor Thomas Byrne broke down crying in court today as he told how his mother’s family home had been used as collateral in some of his multi-million euro dealings.
Mr Byrne, who owes more than €40 million to banks, was giving evidence relating to the circumstances of the sale of his parents' home at Walkinstown Drive, Dublin.
Property developer John Kelly, of Hunter's Moon, Kilquade, Co Wicklow, a former client and alleged business partner of Mr Byrne, claims he is the rightful owner of the house while Mr Byrne's mother, who is a ward of court, is seeking a declaration the house belongs to her and the proceeds of its sale are needed to fund her care in a nursing home.
Proceedings have been brought on behalf of Mrs Byrne against Mr Kelly who claims he paid for the Byrne home as part of a "basket of properties" which he bought.
In court today, Mr Kelly accepted none of the proceeds of the family home sale went to the Byrne family and also agreed, from what he had heard in court, the deed of sale was now void.
The President of the High Court, Mr Justice Richard Johnson, said he would give his decision on Monday if the sides had not reached agreement.
Mr Byrne had been ordered to attend court to be cross-examined by lawyers for Mr Kelly and Mrs Byrne in relation to his role in the sale of the house.
Under questioning from Mrs Byrne's counsel, he said Mr Kelly had become his biggest and "difficult" client and eventually "my practice became his private bank". He said he became very frightened of Mr Kelly especially when he "indicated he had friends in the INLA".
Mr Byrne said Mr Kelly would be regularly on the phone to him looking for money and it got to the stage Mr Kelly had said he needed to raise money with AIB and "was going to use my parents house as security". He said Mr Kelly told him it would be a short-term matter and in due course they could redeem the money from this transaction.
Asked by the judge if he himself had executed the deed of sale in relation to the house, Mr Byrne said he could not answer such questions "on the basis of legal advice that I might incriminate myself".
When asked by counsel for Mrs Byrne if he derived anything personally from the sale, he again said he could not answer on legal advice. Asked who was the rightful owner of the family home, he began to cry and said: "My mother, Philomena Byrne."
Questioned by counsel for Mr Kelly, Mr Byrne denied he was lying about what had happened. He said Mr Kelly had instructed him to draw up a contract for the sale of the house because Mr Kelly had pledged it as security and was coming under pressure from banks he owed money to.
Mr Byrne also denied he was saying such things because he himself was under pressure over running a deficit in his client account.
"It was solely because of my relationship with John Kelly because he would be ringing me every day to transfer money into his accounts due to an insatiable appetite to fund his extravagant lifestyle," Mr Byrne said.
He said Mr Kelly got a loan of €533,000 from the EBS on the strength of the Byrne parents' home and most of this was used to pay off Mr Kelly's debts.
In his evidence, Mr Kelly said his dealings in relation to the Byrne parents home happened because "Thomas Byrne was my friend and he asked me to do something and I did it." The dealings were also on the advice of Mr Byrne as his solicitor.
He said he used the Byrne home as equity as part of "a basket of properties" he used as security for loans and rejected Mr Byrne's assertion he was involved in multiple pledges (of security) on that property.
After the court heard the sides may be able to agree the nature of declarations relating to the house, the judge adjourned the matter to Monday. All banks who have charges over the property, except Ulster Bank, have agreed to abide by the decision of the court.
