The High Court has ruled that ACCBank is liable for more than €4.7m in damages to a property developer over losses suffered by him because of the bank's negligence in losing title deeds to certain properties.
The damages awarded to Jerry Beades - who is a close associate of former Taoiseach Bertie Ahern - will be offset against €6.2m in loans owed to the bank by Mr Beades and his company, Fairlee Properties Limited.
ACCBank had been pursuing Mr Beades for the return of the money the bank advanced to him. Today's decision follows a counter-claim taken against the bank for compensation for the lost documents.
Mr Beades and his company became involved with ACCBank in 2000, when ACC agreed to fund Fairlee's development of a tract of land in Fairview.
As part of the deal the bank held the title deeds for a number of properties owned by Fairlee, including the proposed development land.
The bank funded two phases of development of the site in 2000 and 2001, but when Mr Beades applied for money for the third phase, ACC refused. Fairlee's loans were in arrears since March 2003 and the relationship with Mr Beades had deteriorated.
When funding was secured from an alternative lender - Bank of Scotland Ireland - it emerged that ACC had lost the title deeds needed to secure this loan. In July 2006 ACC provided an indemnity to BOSI and in April 2006, the title deeds were found.
ACC subsequently gave an additional €3m interest-free loan to Fairlee, which the judge today said reduced the amount of damages due.
In today's reserved judgement, the High Court said ACC owed a duty of care to Mr Beades and his company to take care in the custody of the deeds. She said ACCBank had breached this duty between June 2004 and April 2006. She also found the bank must have known the defendants as property developers would be directly affected by this loss as the deeds were needed to raise development finance.
The damages figure allowed for €4.4m in 'probable profits' due to the delayed development of an apartment block on the Fairview site. It also took into account the losses of €240,000 caused by Mr Beades' having to sell three properties below market value due to cash flow difficulties caused by not having the title deeds.
She said this came within the scope of ACC's duty of care to Mr Beades. Due to ACC's negligence she cancelled any further interest owed to ACC on the loan amount outstanding.
