Thursday 14 December 2017

Bank and lawyers sued after elderly woman left with €2m debt and without home

Tim Healy

A BANK and a firm of solicitors are being sued for alleged breach of duty over a series of transactions which the Commercial Court heard left a elderly woman without a home and a debt of nearly €2m.

Elizabeth Ryan (88), who was made a ward of court last December because she suffers from dementia and is living in a nursing home, is suing AIB and the firm of Joynt and Crawford Solicitors, Anglesea Street, Dublin, claiming they failed in their duty of care to her over the transactions in which her family home was sold in an effort to provide for her future accommodation and care.


Her only child Jonathan Ryan, and his wife Paula, are suing the same solicitors for breach of professional duty claiming they failed to properly advise them when the transactions involving Mrs Ryan senior's assets were being carried out.


The claims are denied.


The court heard todday that in 2006 Jonathan decided to secure his mother's future, after she first started showing signs of dementia, by selling off her home and his own family home which were on adjoining sites at Castlepark Road/Breffni Lane, Sandycove, Dublin.


The plan was to use €1m from the sale proceeds to provide for her nursing home care and to buy another house for Jonathan and his family.   It was decided the new house should be bought in the mother's name to minimise Jonathan's inheritance/gift tax liability.


In August 2006, shortly after Mrs Ryan senior went into the nursing home and where she has been since, Jonathan and his wife found a house they wanted to buy, Khyber Lodge, Nerano Road, Dalkey which they bought for €3.5m.


Johnathan had joint power of attorney over his mother's assets at this stage and in September 2006 a total of €4.11m, including a bridging loan, was borrowed from AIB in Mrs Ryan senior's name to pay for the new property on which €300,000 was spent on improvements.


However, the other two houses had not yet sold and when they did sell, in 2007 and 2010, they fetched a total of around €2.8m.   The proceeds

were used towards the €4.1m debt but, taking into account the mortgage on the property previously owned by Jonathan and his wife, around €2m was still owed to AIB which in July 2011 demanded full repayment from Mrs Ryan senior.


Jonathan and Paula, who herself works for AIB, then brought proceedings against the bank while Mrs Ryan senior's court-appointed ward took an action on her behalf.


Mrs Ryan senior is seeking a declaration that the loan agreement entered into with AIB is void and that she does not owe anything to AIB.  She also wants a declaration that she is entitled to judgment against the bank for €1.34m, representing the net proceeds of the sale of her former family home, "Park Lodge" in Sandycove which had been mortgage free when it was sold.


She and her son and daughter-in-law are seeking damages against Joynt and Crawford solicitors for professional negligence.


Opening the case on behalf of Mrs Ryan senior, as a ward of court, Robert Barron SC said AIB knew in 2006 that  the then 82-year-old woman was suffering from dementia but had not ensured, as it was required to, that she had the benefit of independent legal advice.


These transactions "took the risk of divesting her of all her wealth and that was what happened - but she should not have been exposed to a risk of this magnitude", he said.


Opening Jonathan and Paula's case, Michael McDowell SC said Mrs Ryan senior's son was a decent caring individual who had taken steps to try to ensure his mother's future in the knowledge, that as her only child, he would eventually inherit all her assets.


The couple were doing their best for Mrs Ryan senior and had acted reasonably and responsibly and sought advice from professionals who owed them a duty of care, he said.


The couple were now living in a house in Dalkey which AIB claims to be the owner of and the "consequences for him (Jonathan) have been absolutely horrific as a result of these transactions,"  counsel said.


Mr McDowell also said AIB had made "wholly misconceived and wildly irresponsible" claims that Jonathan had acted fraudulently and dishonestly in this matter and had still not apologised for this.


The case before Mr Justice Michael Peart continues.

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