Bank of Ireland is suing a Galway-based solicitor’s firm for allegedly failing to put in place the necessary charges to ensure that the bank had security for loans advanced for several property deals.
The action has been taken against Donal Downes, practising as O’Dea and Company solicitors, Hardiman House, Eyre Square, Galway. The bank claims that it advanced loans of €2.8 million and $900,000 (€663,000 ) on the basis of it having a first legal charge over various properties. However, the bank later learnt that other financial institutions had prior securities over properties in Galway while there was no security at all in place for a development of 14 apartments in Co Sligo.
The case, which was transferred to the Commercial Court earlier this week, relates to alleged agreements of the defendant firm to act for the bank in connection with taking securities arising from the purchase of a property at Bramley, Maree Road, Oranmore, Co Galway; a property at Lakeview, Claregalway; 14 apartments at Ballymote Road, Tubbercurry, Co Sligo; and a property at Fearran Ri, Doughiska, Galway.
Bank of Ireland claims it advanced a loan of some $875,000 dollars to Stephen Harris in May 2007 to assist in the purchase of an apartment at Rockefeller Plaza, Manhattan, New York, to be secured by a first legal charge over the Claregalway property. In November 2007, it claims it advanced a €1.4 million loan to Mr Harris to assist in the purchase of the Oranmore property upon the security of a first legal charge over that property. The bank then advanced loans to Mr Harris and Bernard McKeon to finance the purchase of the Tubbercurry apartments which loans were to be secured on those apartments and on the Doughiska property.
It is claimed Mr Harris mortgaged and charged the Claregalway and Oranmore properties in favour of the bank while Mr Harris and Mr McKeon charged the Doughiska property in favour of the bank.
The Bank of Ireland claims the defendants had agreed to act as solicitors for the bank in connection with the taking of security over the various properties but had not to date procured the registration of the securities over any of those properties. In January last, the bank said solicitors for Mr Harris and Mr McKeon had informed it the Claregalway property was subject to a prior charge in favour of Bank of Ireland while the Doughiska property was subject to a prior charge in favour of KBC Bank. Because of the alleged acts and omissions of the defendants, the bank claims it had and continues to suffer loss and damage and is unable to deal with the properties.
The Bank of Ireland is seeking orders from the court requiring that the securities be put in place or damages are awarded.
