Former Irish rugby star and brother could face bank repossession of properties
FORMER Irish rugby star Frankie Sheahan and his brother could face a bank repossession of a number of properties following a High Court ruling on a dispute over alleged non-payment of loans.
Ms Justice Iseult O'Malley said the proceedings have a somewhat complex history but they related to borrowings by Joseph Sheahan and his brother Frank Sheahan Jnr.
Frank Sheahan Snr is a successful businessman with substantial experience in the world of property investment whose son Joseph had set up a mortgage brokerage, Mymortgages, while Frank Sheahan Jnr was a a well known professional rugby player, she said.
The brothers had challenged the validity of Bank of Ireland Mortgage Bank's appointment last year of chartered accountant Michael McAteer as receiver over certain properties.
The appointment came after Bank of Ireland demanded loans on the properties be repaid in full after the borrowers defaulted on obligations to make repayments on mortgages.
The properties were all purchased with loans from BOI Mortgage Bank before being rented out by the Sheahans and their company.
The loans were offered between 2005 and 2008 and nearly all related to buy to let investment properties with another loan relating to the purchase of a property in 2006.
The loans were called in on November 1, 2011, and a receiver was appointed over various properties between November 2011 and September 2012.
The judge said it was accepted by the Sheahans they entered into the various agreements and drew down monies on foot of them. Letters of demand in relation to various loans were issued in November 2011, she noted.
An order was sought against Joseph Sheahan for possession of a property bought in 2006 and the bank also sought an order for possession of a site at Leslie's Arch, Old Quarter, Ballincollig, Co Cork
Ms Justice O'Malley said she must conclude the bank intended to be bound only by the written terms of agreement and the borrowers knew that.
It might well have been, if the expectations on all sides as to the continued rise of the property market had been borne out, the issue would never have come to a head, she said.
The properties would either have been disposed of for a profit enabling to the loans to be paid off or the bank might have agreed to an extension of the interest only payments on he basis that its security was continuing to appreciate in value.
"The undoubted fact that neither Joseph or Frank Sheahan Jnr had, at the time of being given loans, the income to support capital repayments on all their loans supports the view everyone concerned assumed that something of this sort would happen."
However, having regard to the applicable legal principles, the court must find the contracts actually entered into were not founded on those assemptions, she held.
The judge also ruled the decision to call in the loans and to appoint a receiver in the event of non payment was made by an appropriately authorised person.
The judge also indicated that another case relating to guarantees alleged to have been given by Frank Sheahan Senior had by agreement of all sides been held over to another date.