In 1989 Mr Hogan wished to sell two of the properties the title deeds to which had been lodged by him with the Bank by way of security, namely, number 69 and 77 Roebuck Downs. Mr and Mrs Hogan contended that the sum claimed by the Bank was not a loan to Mr Hogan but was part of, and related to, the finances made available to the Company and that the Bank negligently and were in breach of their fiduciary duty so acted in relation to the Company as to render it incapable of carrying on business. It was part of the defence of Mr and Mrs Hogan that the Bank was at all times in a fiduciary position in relation to them and also exercised a position of dominance over them. Ultimately the Bank called in their loans to the Company and, payment not being forthcoming, appointed a receiver under the powers in that behalf contained in the mortgage debenture which they held over the assets and undertaking of the Company. The Company was advanced substantial sums from time to time by the Bank. Mr Hogan was also, a controlling shareholder of a company called Drefflane Associates Limited ("the Company"). It is common case that the advance in January 1987 was made to Mr Hogan to enable him to purchase as an investment the two properties, namely, 77 Roebuck Downs and 32 Brookevale Downs. On that date, by agreement between the Bank and Mr Hogan, the then existing facility was converted into a term loan from the Bank to Mr Hogan in the sum of £190,000 which was to be repaid with interest in five equal annual instalments, the first instalment to be paid one year from the date of the agreement. The sum was duly advanced and on the 28th of January 1988 the amount due by Mr Hogan on foot of the advance to the Bank including interest, was £189,285.79. As security for that advance Mr Hogan made an equitable deposit with the Bank of the title deeds to three residential properties which he owned, ie., numbers 69 and 77 Roebuck Downs, Goatstown Road, Dublin 14, and 32 Brookevale Downs, Rathfarnham, Dublin 14. On the 23rd of January 1987, the Plaintiffs (the Bank) agreed to advance the sum of £150,000 to the first named Defendant (Mr Hogan). The background against which that issue fell to be considered may be summarised by reference to the judgment of the learned trial judge in the following terms. "If the second named Defendant did give any such security (which is denied) which was valid (which is denied) same was obtained from her improperly or unconscionably and by reason of the inequality of bargaining power which existed between herself and the Plaintiffs and by reason of their undue influence over her and ought to be declared void on that account and by reason of the fact that the Plaintiffs by their servants or agents represented and agreed that as a condition of and in return for a deposit of title deeds by her they would advance the sum of£75,000 to the first named Defendant or to Drefflane Associates Limited if he so directed, which advance the Plaintiffs failed or refused to make." Having averred that Mrs Hogan did not give any security to the Plaintiff/ Respondents the pleadings went on to allege as follows:. The particular issue which Mr Justice Keane tried on oral evidence evolved from a pleading contained in paragraph 7 of the Defence filed by the Defendants herein on the 25th day of October 1991.
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