A High Court judge has ruled solicitor Gerald Kean was not entitled to give Permanent TSB the title deeds to two properties of a woman in Co Waterford over which the EBS has a first legal charge.

Mr Kean should not have given the deeds to PTSB in the "teeth" of advice from a solicitor in his office, Mr Justice Michael Twomey found. Mr Kean also should not have made a "false" statement in a 2014 letter to PTSB that his law firm had issued proceedings against EBS.

While EBS had asked the court to declare the failure to return the deeds to it amounted to professional misconduct, the judge said he has no jurisdiction to do so because such matters are, at first instance, for the Solicitors Disciplinary Tribunal.

EBS is entitled to orders directing Mr Kean to inform PTSB he was not entitled to give it the title deeds and directing him to retrieve those deeds and return them to EBS, he ruled.

Richard Kean SC, for Mr Kean, said his instructions were to “vigorously appeal”.

The judge told Mr Kean and Andrew Fitzpatrick SC, for EBS, he would address costs of the ten day case and other issues on May 26th.

‘Systems failures’

Mr Kean was sued on foot of his accountable trust receipt (ATR) undertaking given to EBS in 2008 concerning deeds over properties owned by his client, Dolores Corcoran, and mortgaged to EBS as security for loans made to her.

Mr Kean gave the undertaking to get the deeds for Ms Corcoran’s planned refinancing of her EBS loans with PTSB. An ATR means a solicitor undertakes to return title deeds to the bank on demand or clear all loans secured by the deeds.

In its action against Mr Kean, EBS alleged he has failed to return to the Society the deeds for two properties of Ms Corcoran at Hunter's Way, Williamstown, and Portnahully, Carrigeen.

Mr Kean alleged “systems failures” within EBS lead to the problem. It was claimed a letter from EBS’ indicating that its security for another loan of Ms Corcoran’s included a charge on the two properties was received by the Kean firm after the loans concerning those properties were redeemed.

Waterford properties

Ms Corcoran owned three properties, the two at Hunter’s Way and Portnahully, and another at Henrietta Street, Waterford, and had four EBS loans secured on them. Because one of her loans was not re-financed with PTSB, and was secured on all three properties, EBS since late 2008 sought return of the title deeds for Hunter’s Way and Portnahully from Mr Kean.

Mr Justice Twomey said the initial problem in this case arose from a “simple human error” by a solicitor in Mr Kean’s office.

That error lead to Mr Kean being bound by “double” undertakings — to give PTSB a first charge over Hunter’s Way and Portnaully and at the same time return to EBS the deeds of those two properties because one of the loans secured on them was not redeemed and EBS had a first legal charge over them.

The cause of the undertakings was the firm’s failure to appreciate the significance of searches concerning the properties and warnings in three letters sent by EBS concerning discharge of its loans in light of Kean’s knowledge Ms Corcoran had a fourth EBS loan that was not discharged under her refinancing arrangement with PTSB, he found.

That mistake lead to the fourth loan not being discharged which was necessary for Keans to be able to give PTSB the title deeds and a first charge over the properties.

A fourth letter from EBS of June 2008 which related to the fourth loan had not arrived late in Kean’s and, even if it had, was not the cause of the double undertakings, he held.

Error ‘exacerbated’

The firm’s internal error was “exacerbated” by Mr Kean’s reaction to it and that reaction was why the case became one about Mr Kean’s alleged misconduct and not just about a conveyancing error within his office, he said.

Keans were asked from December 2008 to return the title deeds and that request was repeated, with “increasing urgency” over the next five years. Mr Kean “ignored” those requests and instead handed over what was effectively EBS property to PTSB without informing EBS he had done so.

A letter from him to PTSB of November 2013, which stated the firm was pursuing EBS for the vacated mortgage deed, exacerbated the mistake and meant EBS needed a court order to ensure PTSB would hand back the deeds. A title certificate attached to that letter gave PTSB an undertaking it would get a first charge over the two properties when Mr Kean knew EBS had a first charge over them and had sought return of the deeds.

After five years of a “stand-off” with EBS, it was difficult to know why Mr Kean handed the deeds to PTSB in the teeth of advice given to him in 2009 from another solicitor in his office.

Mr Kean had not given evidence but wrote to Ms Corcoran in December 2008 stating he did not wish to be personally exposed in the dispute with EBS, the judge noted. Giving the deeds to PTSB might reduce that personal exposure by giving PTSB some security for its loans as EBS had some security concerning her third property.

While EBS will suffer no loss if Ms Corcoran pays off the relevant loan, EBS has suffered the loss of being deprived of the tite deeds which, if the need arose, were necessary to enforce its security.