The High Court has allowed KBC Bank Ireland plc to amend its claim against solicitor John Henchion over a 2007 mortgage undertaking, but removed an allegation that a borrower was under her husband’s undue influence.
The ruling concerns the scope of the bank’s claim, not whether the solicitor is liable or what compensation may be due. Mr Justice McDermott said the amended case should proceed to a trial, where disputed facts can be tested through oral evidence.
The bank says it advanced €290,000 to Eugene and Bernadette Lynch to remortgage their home at 67 Laurel Avenue, Ballea, Carrigaline, on the basis that its loan would be secured by a first legal charge. It alleges that the earlier Bank of Ireland Mortgage Bank mortgage was not fully redeemed, leaving the bank’s charge behind it in priority.
In affidavits, Mr Henchion accepted that he had undertaken to secure a first charge. He said he paid €38,921.47 towards the earlier mortgage after reading a redemption figure, but mistakenly missed information about a second account with an outstanding balance of about €100,000. He said the borrowers had signed the mortgage documents and that his firm lodged the documents for registration. The court noted his acknowledgments concerning the undertaking, registration and discharge of sums due.
The bank’s proposed amendment followed allegations raised by Mrs Lynch in 2014 that she had not been advised about the documents or their implications for the family home. The bank argued that, if its security proved unenforceable for that reason, the solicitor’s alleged failure to ensure effective security could support a claim for the entire outstanding loan balance. It also said that without such a defence, its claim would concern the loss caused by delay in complying with the undertaking.
Mr Henchion disputed the allegations, saying he fully advised Mrs Lynch and that she understood and willingly entered the transaction. The judge said the new advice-related allegations fell within the existing cause of action and had been set out in an additional affidavit. He found no suggestion that the solicitor would be prejudiced in defending them.
However, the judge said the proposed pleading gave no particulars or factual basis for the allegation that Mr Lynch exerted undue influence, or for how that would relate to the solicitor’s undertaking. He therefore ordered that the words referring to undue influence be deleted from the proposed amendment.
The amendment was allowed in that limited form. The court said the case should proceed to a conclusion with reasonable speed and that the pleadings could be completed with a view to an early trial date. The judgment did not determine the truth of Mrs Lynch’s allegations, the enforceability of the mortgage, the amount of any loss or the bank’s entitlement to compensation.