Tuesday 20 February 2018

Senior court official acted outside his powers when he sought to refer €3m mortgage case to DPP, High Court rules

Master of the High Court Edmund Honohan
Master of the High Court Edmund Honohan

Tim Healy

A senior court official acted outside his powers when he sought to refer a case involving €3m worth of mortgages to the DPP, a High Court judge ruled.

Master of the High Court Edmund Honohan, who deals with procedural and other matters relating to cases on their way to a full judge of the High Court, also acted irrationally concerning his claim there was perjury in relation to a solicitor's undertakings providing security for the €3m loans, Ms Justice Iseult O'Malley said.

The judge granted AIB and AIB Mortgage Bank a declaration Mr Honohan had no power to refer statements sworn by bank officials in the solicitor case to the DPP over what he (Honohan) had alleged was perjury.

The case arose out of proceedings by AIB against former solicitor Angela Farrell, who is also bankrupt, in relation to professional undertakings she gave to the bank on behalf of members of the same family between 1999 and 2009 for mortgages on 20 properties in Dublin 4,8 and 18. 

Those undertakings - including to acquire good and marketable title to the properties and ensure the bank would get first legal charge over them - were allegedly not complied with.

The bank brought proceedings against Ms Farrell which first came before Mr Honohan in the Master's Court.

Ms Justice O'Malley said during those hearings in the Master's Court, Mr Honohan said the an affidavit sworn by AIB Financial Services official Lynn Hogan was "untruthful" because it stated one of the undertakings was in favour of AIB plc when it was in fact for AIB Mortgage Bank. 

AIB's lawyers said this was most likely inadvertence.

Mr Honahan, at a subsequent hearing, said there was no evidence that security for the loans on certain properties had not been put in place.  He then said he would be sending papers in the case to the DPP.

The bank got an injunction against Mr Honahan  preventing him from referring the matter to the DPP pending a full hearing and also sought judicial review of his decisions. 

Ms Justice O'Malley said while Ms Hogan might be accused of sloppiness, which is an all-too frequent phenomenon, it was "a very far cry" from a finding that there was "incontestable prima facie evidence of perjury" as claimed by the Master.

The judge also said when the Farrell case came before Mr Honohan again, the bank asked him to provide a copy of his referral to the DPP order so it could appeal.  Mr Honahan said he would not he was making the referral as a private citizen.

Ms Justice O'Malley said Mr Honahan also commented on once occasion that the AIB proceedings against Ms Farrell were nothing other than "an insurance claim" so the bank could sue her insurance company to reclaim the full value of the loans.

Mr Honohan also remarked the bank had been forced to do "a 180-degree turn"  and he was being asked to turn a blind eye to perjury.  He also said he would be referring the papers to the DPP as soon as the injunction against him was lifted.

Ms Justice O'Malley said the physical act of sending papers to the DPP would involve an assertion of a right to take or copy the papers in the case which "no private citizen could have".

She was satisfied the power to refer to the DPP could not be seen to be part of the Master's functions in this case.

It was also not a question of public officials turning a blind eye to evidence of criminality which are matters to be dealt with by a judge administering justice in public, she said. 

There was a suggestion in submissions on behalf of Mr Honahan that judges are too busy to consider the papers in the case properly and will permit an injustice to be done as a result.

This was not a proper suggestion for a court official to make, she said.

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