Sunday 23 October 2016

Widow liable for €1m loans taken out by herself and late husband to buy Shanghai apartments

Published 23/02/2016 | 17:28

Photo: Getty
Photo: Getty

A WIDOW who claimed she should not be liable for loans arising out of her late husband's property investments has had judgment entered against for just over €1m at the High Court on the application of a bank.

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Ethel Miley, with her husband Seamus, took out loans in 2006 from Danske Bank putting up as security their family pub, Miley's of Blessington, Co Wicklow, where they also lived. 

The loans were for property investment in Ireland and China, including two apartments in Shanghai.

Following her husband's death in 2010, Mrs Miley refinanced the borrowings in 2012 in her own name with the two Shanghai apartments to be sold to reduce the loan, along with a number of other requirements including that the pub be professionally valued at three-yearly intervals.

When she defaulted, the bank sought summary judgment against her.

She asked the court to send the matter to full trial saying she had a defence on a number of grounds.

These included that when she signed the 2012 loans, she was a consumer within the meaning of the Consumer Credit Act 1995. 

As she was acting outside her business, she claimed, the bank had breached that law by failing to provide her with a "cooling off" period during which she could have reconsidered the refinancing arrangement. 

She argued that when signing both the 2006 loan agreement with her husband, and the 2011 agreement on her own, she was engaged in a trade or profession - running the pub - and was not a property investor. 

She argued she was required to be a party to the 2006 borrowings because they were secured on their joint property and that the loans taken out were "not really" for her use but for her husband.

The bank disputed these claims.

Ms Justice Marie Baker ruled the bank was entitled to judgment for just over €1m against her as she had not made out a prima facie case she was a consumer for the purposes of the 2012 loan.

Mrs Miley had given no evidence as to whether she was the sole beneficiary of her husband's estate.

Her affidavit evidence, which the judge said was "carefully framed", did not suggest she gained no benefit from his investments.

Mrs Miley was not a stranger to business, and even if she was a stranger to her husband's property investments, she was not unfamiliar with financial transactions in general, the judge said.

She ran the family pub and it was "not credible" that she relied on her husband's expertise in relation to the 2006 loan.

The judge also rejected Mrs Miley's assertion that because she had "no option" but to accept the terms of the 2012 loan agreement, the bank had exercised duress over her. 

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