Solicitor Brian O'Donnell misrepresented that he owned the family's luxury home in Killiney in order to get credit from Bank of Ireland, when the real position was that his four children owned the property via a trust, counsel for the children has argued before the Supreme Court.
Ross Maguire SC said the property at Gorse Hill, Vico Road, which the children want the court to stop the bank repossessing, was given a value of €30 million in a statement of net worth of Mr O'Donnell and his wife given to Bank of Ireland in 2005.
The property was included in other such statements, although the bank was aware that Gorse Hill was owned by Vico Ltd, which, in turn, was owned by a trust, and not by the parents, Mr Maguire argued. The court heard the house contents were given a value of €7 million in one statement of net worth, but a valuation carried out for the bank in 2012 valued them at €120,000. Mr Maguire agreed there was a “huge” difference between those amounts.
The children felt compelled to sign untrue declarations in 2011 stating they had no interest in Gorse Hill in an effort to save their parents from financial ruin, Mr Maguire said. The declarations were obtained under undue influence of Mr O’Donnell, he added. The bank demanded those declarations as part of a settlement of legal proceedings against the parents, he said. When that settlement later broke down, the bank in late 2011 obtained a €71 million judgment against the parents which it wants to enforce via repossession of Gorse Hill.
Mr Maguire agreed with Mr Justice Adrian Hardiman that the children were all aged 18 when they signed the declarations and that one of them, Blake O’Donnell,was a qualified solicitor. One of the children, Alexandra O’Donnell, was just 14 in 2006 when Vico guaranteed to mortgage the property as security for loans provided by Bank of Ireland to their parents, Mr Maguire said. All four children were dependants of their parents, he added. The bank, he said, was aware that the guarantee was a breach of trust and it should not in equity be entitled to repossession.
In exchanges with the judges, he agreed that the children had not joined their parents as parties to their proceedings aimed at preventing the bank’s repossession of Gorse Hill. When Mr Maguire said he was not representing the parents but that they were fully aware of the proceedings, Mr Justice John Murray said the Director of Public Prosecutions “perhaps should also be aware”.
The five-judge court is hearing an appeal by the four children – Blake, Blaise, Bruce and Alexandra O’Donnell – against a High Court order decision made in July 2013 that the bank was entitled to possession of Gorse Hill.
The house and 3½ acres at Gorse Hill are owned by Vico Ltd, an Isle of Man company, and the shareholding of Vico Ltd is owned by a discretionary trust set up by the O’Donnell parents in favour of their children.
The legal dispute centres on whether Gorse Hill was an asset of the trust legally and beneficially owned by the children.
The bank claims entitlement to the property, now said to be worth between €6 million and €7 million under securities obtained by it in 2006 concerning the property when it advanced various loans to Brian and Mary Patricia O’Donnell.
In his July 2013 High Court judgment, Mr Justice Brian McGovern found the children were entitled to a beneficial interest in the shares of Vico Ltd but said it was clear that the trust held shares, rather than any interest, in Gorse Hill. Having found that Gorse Hill was not held by the trust, there was no proprietary claim open to the children as beneficiaries of the trust, the judge ruled. He also dismissed claims that Bank of Ireland had knowledge, actual or constructive, of any breach of duty or breach of trust by the directors of Vico Ltd or the trustees.
The appeal continues.