BoI deny turning ‘blind eye’ to security on loans

Brian O’Donnell provided family’s home as security for loans taken out by himself and his wife

 Gorse Hill, Killiney: owned by a company, Vico Ltd, which in turn was wholly owned by a trust set up for the benefit of the couple’s four children.   Photograph: Cyril Byrne /The Irish Times

Gorse Hill, Killiney: owned by a company, Vico Ltd, which in turn was wholly owned by a trust set up for the benefit of the couple’s four children. Photograph: Cyril Byrne /The Irish Times

Wed, May 7, 2014, 22:40

Bank of Ireland has denied claims it “turned a blind eye” when solicitor Brian O’Donnell provided the family’s luxury home in Co Dublin as security for loans

taken out by himself and his wife although that property was not owned by them.

The property at Gorse Hill, Vico Road, was owned by a company, Vico Ltd, which in turn was wholly owned by a trust set up for the benefit of the couple’s four children and from which their parents were excluded, Ross Maguire SC, for the children, told the Supreme Court yesterday. Bank of Ireland knew of the existence of the trust from at least 2000 and should have made inquiries in 2006 when Vico Ltd guaranteed Gorse Hill as security for the loans, counsel said. That guarantee amounted to a “fundamental breach of trust” and, had the bank looked, it would have found the parents were not beneficiaries of the trust.

Mr Maguire was continuing his arguments on behalf of the children – Blaise, Blake, Bruce and Alexandra O’Donnell – in their appeal against a July 2013 High Court finding the bank was entitled to possession of Gorse Hill. The bank wants possession as part of its efforts to enforce a €70 million judgment obtained in December 2011 against Brian and Mary Patricia O’Donnell arising from unpaid loans. The house and land is worth €6-7 million.

Opposing the appeal, Cian Ferriter SC, for the bank, said there was evidence to support the High Court’s findings Vico Ltd acquired full legal and beneficial title to Gorse Hill in 2006 and that, while the children were entitled to a beneficial interest in shares of Vico Ltd, the trust held shares, not any interest, in Gorse Hill.

There was no evidence to support the claims the bank knew, when it obtained the guarantee over Gorse Hill, the security amounted to a breach of trust, he said. The appeal continues before the five-judge court.