O'Donnells ask court to stop fraud proceedings

SOLICITOR BRIAN O’Donnell, his wife and two adult sons have asked the High Court to halt proceedings by Bank of Ireland alleging fraud against them over an alleged conspiracy to put in place a “blatant” scheme to put property assets in London beyond its reach.

The bank initiated the actions last July as part of its efforts to recover judgment of some €75 million granted against Mr O’Donnell and his wife, Dr Mary Pat O’Donnell, in December 2011 arising from unpaid loans provided for property investments.

The couple and their sons Blake and Bruce yesterday applied to Mr Justice Peter Charleton to stay the proceedings pending the outcome of other proceedings in Britain concerning ownership of a property, Westferry Circus, London.

The O’Donnells deny the bank’s claim that Mr and Mrs O’Donnell own that property. They also deny that a trust set up in relation to the property is “a sham”. The bank earlier this year secured a charge from the British courts over a company, Hibernia 2005, which effectively owns the property. The O’Donnells dispute its entitlement to that.

The hearing concluded yesterday and the judge said he will rule on the matter later this month.

Ross Maguire SC, for Bruce and Blake O’Donnell, Gorse Hill, Killiney, Co Dublin, sought an order setting aside service of the bank’s proceedings on them and staying the action in light of the British proceedings. He argued the British courts have jurisdiction in the matter.

Mr Maguire said his clients denied the bank’s allegations. They also contended the two properties at issue – at Columbus Courtyard, Canary Wharf, and Westferry Circus – were either “worth nothing to them” or the senior loans charged on the assets were such as to render them “not very valuable”.

Mr and Mrs O’Donnell had put the combined value of the two properties at some £200 million, the court heard previously.

Mr Maguire said Columbus Courtyard is an office building owned by Havergate Investments (previously known as Columbus Courtyard), a company registered in the British Virgin Islands, while Westferry Circus is effectively owned by Hibernia 2005.

He said Columbus Courtyard is managed by another British Virgin Islands-registered company, Kennor Advisory (previously known as 1492).

Ronan Lavery QC, for Brian and Mary Patricia O’Donnell, also urged that the bank’s case be stayed and sought to discharge an appearance entered earlier in the action on behalf of the couple.

It was highly likely the couple will be made bankrupt in Britain or in this jurisdiction in a very short period of time and they hoped that bankruptcy would occur in England, he said. They had also provided all outstanding documents required by the bank.

They were “not getting off lightly” and all the debts will be collected, counsel added. The bankruptcy was an opportunity “to draw a line” under the matter and to get on with their lives.

Opposing the application, Cian Ferriter SC, for the bank, said it would be claiming there was a fraud aimed at frustrating the judgment granted against the couple.

The bank should be allowed proceed with an action validly commenced in this jurisdiction, he argued. The bank contends the ownership of the two London properties was moved on by the defendants either through dilution of the share capital or, in Hibernia’s case, holding the shares via a trust.

It alleges the trust is a sham and wants declarations Hibernia is owned by the couple and also wants the share capital in Havergate restored.

The bank is also seeking to establish the situation related to income being earned from Columbus Courtyard and another property, Chalet Hermine, Courcheval, France.