Donegal county councillor Frank McBrearty Jnr has settled his claim with AIB after a court in Northern Ireland found in his favour.
The Raphoe-based Labour councillor said he was “more than delighted” with the outcome of an action which saw him receive full costs and compensation. Although not bound by a confidentiality agreement he said he did not wish to disclose the details of the settlement.
Mr. McBrearty and his wife Patricia had taken the action over an investment made with the bank from the €1.5 million compensation he received from the Irish State following the Morris Tribunal.
In what is seen as a landmark judgement the High Court found that AIB and its investment arm engaged in “negligent misrepresentation” of the terms of an investment product sold to the couple.
Justice McCloskey adjourned the case in February urging the sides to come to a settlement and the case was struck out last week after agreement was reached.
Speaking to the Donegal Democrat yesterday Mr McBrearty said he was very happy with the outcome. “I am very happy with my legal team and I want to thank my counsels Michael and Paul Lavery and James Sweeny of VP McMullin. I felt from the beginning that we would be successful and I am very, very happy with the judgement.
“A lot of people out there in Ireland that are looking at my judgement. When you look at banks like AIB, they are the people that we are bailing out.”
He said he had wanted to negotiate with the bank over their disagreement before it went to court. “I warned them that I would go the whole way to the High Court in Belfast. I never owed the bank any money and I paid them every penny I owed them. What they wanted to take off me was interest and I did not have to pay interest.”
Mr McBrearty and his wife Patricia, took the case against AIB Group (UK) PLC, trading as First Trust Bank and First Trust Independent Financial Advisers Limited (IFA). Both sides issued writs against each other in 2009.
The McBreartys claimed AIB was guilty of breach of contract and negligence relating to a €1 million investment and sought damages of €342,000.
AIB sought to recover loans totalling €260,000, which the bank claimed the McBreartys owed it.
The couple wanted to invest €800,000 to invest but a loan of €675,000 from the bank allowed them to increase that figure to €1 million. The bank gave an “inducement” of €80,000, bringing the fund to €1.08 million, which was invested in an offshore investment.
Some €700,000 was invested in two “guaranteed” funds in 2006 with the balance put into a “low to medium risk” fund.
In 2008 the couple complained to the IFA about the charges being levied on the investment.
In his judgement Mr Justice McCloskey ruled it “was a term of the contract” between the McBreartys and the AIB (UK) and IFA that the latter would secure a 5 per cent annual return on the couple’s investment and that this would not be overtaken by their borrowings.
He said that, viewed through this prism the terms as set out “had the character of misrepresentations, made negligently, which were plainly intended to – and did – induce the plaintiffs to enter into . . . the investment agreement”.
Mr McBrearty received €1.5 million compensation in 2005 for wrongful arrest, libel and breach of constitutional rights.