Sunday 21 January 2018

Man who claimed charging of interest on Dublin 4 property drove him into arrears must surrender house to bank

A MAN who claimed the charging of excess interest on a €832,000 mortgage for a house in Dublin's Morehampton Road had driven him into arrears must surrender the property to the bank, the High Court ruled.

Niall Quinn claimed ACC Bank's  alleged conduct, including the charging of €116,000 in excess interest, triggered the demand for repayment of the full loan and the subsequent court proceedings.

He also claimed the house was his family home and that the bank was prevented from seeking possession until it had complied with the Central Bank's code of conduct on mortgage arrears whereby certain steps must be taken before repossession is sought.

ACC strongly disputed his claim and said he had entered into a commercial mortgage with the bank to buy the house and was not covered

by the code.   Mr Quinn bought the house in 2004 telling the bank he expected to get a €42,000 per annum rent from it, rising to €50,000 when refurbishments were complete.

Mr Justice Michael White said Mr Quinn did not challenge the loan interest rate being applied until he fell into arrears and was contacted by the bank in March 2009.

He did not find credible his evidence that he did not receive loan statements.  He accepted the omission of the interest rate from his letter of loan sanction in 2004 was a simple clerical omission.

The judge also did not accept Mr Quinn's evidence that ACC agreed  in December 2004 to convert the commercial mortgage into a residential mortgage.

If that was so, why would the bank have issued him a further commercial mortgage a month later (January 2005) of €300,000 to refurbish Morehampton Road and refinance another loan, the judge asked.

The court would have expected such a change to be reflected in writing, he said.

Mr Quinn also did not notify the bank until July 2010, in an affidavit, that he regarded it as his primary residence or that he considered the debt to be residential rather than commercial, the judge said.

He was satisfied the rights of his wife, Cathy Quinn, under the Family Home Protection Act, have been respected and do no preclude the court from granting a possession order.

Ms Quinn, who had lived in Morehampton Road since 2005, around the time when the couple got married, had her own financial commitments of two separate loans on properties in Creggs, Co Galway, and Station Road, Sutton, Dublin, the judge said.  She was unlikely to be in a position to discharge liabilities arising from her husband's borrowings, he said.

The judge noted Mr Quinn, when obtaining the original loan in 2004, undertook to the bank he was not acting as a consumer but was availing of the facility in the course of his businiess.

Mr Quinn, as well as mortgaging Morehampton Road to the bank, had also agreed to a charge being registered to ACC over an apartment in Auburn Heights, Athlone, which he owned and stayed in while studying in Athlone, the court heard.

As a result, the judge said, the order for possession applied both to Morehampton Road and the Athlone apartment.

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