A FORMER client of struck-off solicitor Thomas Byrne is liable for a €1.33 million bank loan although he was a victim of fraud and deception by the lawyer, the High Court ruled yesterday.
Mr Justice Brian McGovern ruled car dealer John Madden is liable to National Irish Bank (NIB) for the loan given by it to Mr Madden, secured on legal undertakings by Mr Byrne, and he made orders for judgment in that amount against Mr Madden.
The judge said he was satisfied Mr Madden was a victim of fraud by his former solicitor Mr Byrne “and I think it is well known he is not the only person who was such victim”.
However, Mr Madden, Tandy’s Lane, Lucan, Dublin and principal of John Madden Car Sales, was bound by his signature on the loan documents and there were no special circumstances to make it otherwise, the judge ruled.
While Mr Madden claimed he did not read these documents because he had relied on Mr Byrne, he could not “simply repudiate” them by saying he had not read them, the judge said. If the courts were to permit that, it would “lead to chaos in the day-to-day workings of commercial life”.
NIB claimed Mr Madden obtained the loan for the purpose of investing in further property acquisitions. The judge accepted NIB’s claim that security for the loan was to be provided on a property at Coldwater Lakes, Citywest, Saggart, Dublin. Mr Madden claimed Coldwater was in fact owned by Mr Byrne and the loan was to allow him to buy it from the solicitor as compensation for losses suffered as a result of Mr Byrne not completing another property deal in which both were involved.
He claimed NIB failed to carry out the necessary checks to ascertain the actual position regarding ownership of the property and also alleged he was a victim of undue influence of Mr Byrne.
In getting the Coldwater loan in December 2005, Mr Byrne gave a solicitor’s undertaking and Mr Madden signed a statutory declaration it was not a family home, Mr Justice McGovern noted.
The loan was paid to Mr Byrne, at Mr Madden’s request, but it was never passed on to Mr Madden and Mr Byrne actually retained it for his own benefit.
Mr Madden took up occupation of the property and six months later decided to sell but Mr Byrne had recommended remortgaging it with Irish Nationwide Building Society (INBS) for a sum of €1.4 million. Mr Madden made repayments to INBS but then started getting reminders from NIB over missed payments on the original loan. Mr Byrne had promised to sort the matter out but never did.
Mr Justice McGovern said he was surprised Mr Madden had never explained to NIB he believed the NIB loan had been paid off.
While there was evidence of fraud by Mr Byrne, the judge could not accept Mr Madden was a victim of undue influence when he signed the loan agreement.