Kelly not opposing orders for $5.8m against him

PROPERTY DEVELOPER Paddy Kelly is not opposing summary judgment orders for $5.77 million (€4 million) being entered against him in favour of Bussoleno Ltd, a British Virgin Islands company, following a judgment granted by a Florida court, a High Court judge noted yesterday.

Two other businessmen – John McCabe and John Walsh – are opposing summary judgment being entered against them for that sum.

They claim a mediated settlement of August 2008, on foot of which the Florida judgment was granted in April 2009, was obtained by a fraud of Bussoleno.

Ms Justice Mary Finlay Geoghegan ruled yesterday that Mr McCabe and Mr Walsh had made out an arguable defence on the fraud ground entitling them to a full plenary hearing. In those circumstances, she refused Bussoleno’s summary judgment application against them.

Noting Mr Kelly had not opposed summary judgment, she said she would hear counsel next week on the order to be made against him.

Bussoleno had brought summary judgment proceedings against Mr Kelly, Clonmore, Shrewsbury Road, Dublin; Mr McCabe, The Rath stud farm, Ashbourne, Co Meath; and Mr Walsh, Tinnahinch, Plunkett Avenue, Westminster, Foxrock, Dublin.

Bussoleno brought proceedings in Florida to enforce rights under five promissory notes held by it and guaranteed by each of the three defendants.

Four of the promissory notes were given by Irish American Management Services Ltd I LP (IAMSI) and one was given by Irish American Management Services LP (IAMS).

The defendants joined a René Gareau to that action and, in August 2008, all parties to the Florida action reached a mediated settlement under which the defendants agreed to pay Bussoleno a total sum of $3.75 million in instalments over eight years.

If there was any default, Bussoleno would be entitled to judgment for US$6 million against the defendants, jointly and severally, less any payments already made.

Bussoleno claimed payments of $225,000 were made, but after the defendants failed to make a payment due on March 14th, 2009, of €112,500, it sought final judgment for $6 million, less the $225,000 paid.

The motion for final judgment was granted by a Florida court in April 2009.

Bussoleno then brought its summary judgment proceedings here, but they were adjourned pending an application by Mr McCabe to the Florida courts to set aside the April 2009 judgment order. Mr McCabe’s application was refused, after which the Bussoleno case was re-entered here.

In opposing summary judgment, Mr McCabe and Mr Walsh outlined four possible defences, but Ms Justice Finlay Geoghegan ruled that only one of those amounted to an arguable defence. That defence was the claim the mediated settlement was procured by fraud of Bussoleno.

This involved alleged non-disclosure of the relationship between Bussoleno and Mr Gareau, and that Bussoleno was beneficially owned by Mr Gareau, she said.

The judge concluded both men had an arguable claim Bussoleno owed them a fiduciary duty, and was obliged to disclose its relationship with Mr Gareau at the time of the mediated settlement.

This issue required a full hearing.