Auctioneers admit making €3.5m on land-deal profits

TWO AUCTIONEERS – one of whom resigned as a Fianna Fáil councillor last month and the second is former Co Offaly GAA football manager Richard Connor – have admitted in court to making €3.5 million secret profits from land deals in Co Offaly.

Such behaviour was “unconscionable and dishonest” and both men had admitted “dishonesty” on “a substantial scale” although those admissions had to be “wrung out of them”, Mr Justice Peter Kelly said in the High Court yesterday.

Former councillor Gerard Killally and Mr Connor, who practised as Gerard Killally Auctioneers, face applications on Monday from former partners of theirs in the land deals for judgment against them for €3.5 million.

They have also had their accounts frozen below €8 million in circumstances where they face court proceedings over other deals and for damages, including for alleged negligence, misrepresentation and unjust enrichment.

The judge said he was making the freezing order rather than accept undertakings from the men not to reduce their assets in light of expressed concerns related to assets, and because they had “to be forced to admit wrongdoing” under threat of contempt of court proceedings. The freezing orders were sought because of concerns arising from the closure of the defendants’ auctioneering offices in Portarlington, Portlaoise and Tullamore, and where Mr Killally was being pursued by “numerous creditors”, including Bank of Ireland who last December obtained judgment against him and his wife for €2.6 million, the judge noted.

The judge noted Mr Connor had made “frank admissions” of making secret profits and “did not seek to blame anyone else”, while Mr Killally had said he “got legal advice to say it was okay”, the profits did not have to be disclosed.

It would be “very interesting” to know the identity of any lawyer who gave such advice as it would be “extraordinary”, he said.

The admissions by both men made it clear they had made profits to which they were not entitled, the judge said.

However, to take into account both men had only yesterday briefed new solicitors and counsel in the case, having discharged other solicitors last Monday, the judge said he would adjourn, to Monday, the application for judgment for €3.5 million.

It was hard to see how the plaintiffs were not entitled to judgment, he added.

While the plaintiffs sought an accounts freezing order now for €10 million, he believed €8 million would address the various claims, but that could be increased or reduced.

He made the freezing order, affecting all their accounts, but they may apply on Monday to vary or discharge it. On the application of a solicitor for Naomi Killally, wife of Mr Killally, he directed she could also apply in that regard.

Counsel for both men had opposed as excessive the €8 million freezing order, and instead offered undertakings not to dispose of assets.

Last Monday, after the judge was told neither man had at that stage obeyed an order to provide sworn answers to questions put to them last December, he warned them they must answer and listed the case for yesterday when he was told they had done so and their answers contained admissions in relation to two deals.

One of those deals related to the “Daingean Road” partnership to acquire and deal in lands at Cappincur, Tullamore.

In their answers, both defendants agreed the partnership was to acquire those lands for €6.5 million from another party, but they had procured transactions under which the lands were first sold for €5 million, leaving them with secret profits of €1.5 million which they did not disclose to the other partners.