Gayle Dunne may not cross-examine bankruptcy official
Seán Dunne was declared bankrupt in 2013 over default on €164m in loans to Ulster Bank
Gayle Dunne, who legally separated from her husband Seán Dunne in May, disputes claims by Chris Lehane, the official assignee in bankruptcy
Ms Justice Caroline Costello ruled she had failed to establish exceptional circumstances as to why cross-examination should be permitted for the purpose of her challenge to a worldwide injunction preventing her from reducing her assets below €50 million.
Ms Dunne, who the court heard in May had legally separated from Mr Dunne, disputes claims by Chris Lehane, the official assignee in bankruptcy, that she and Mr Dunne are involved in a scheme to put certain assets beyond the reach of creditors. Mr Dunne was declared bankrupt here in 2013 over default on some €164 million in loans to Ulster Bank.
Of particular issue, Mr Lehane says, is the ownership of a house called Walford, on Shrewsbury Road, Dublin 4, which Mr Dunne bought in 2005 for €58 million, making it the most expensive home in Ireland at the time.
It was later held in a trust by Mr Dunne for the benefit of Ms Dunne before being transferred to a Cypriot company called Yesreb Holdings and then sold on for €14 million last year to Celtic Trustees, a family trust whose settler is financier Dermot Desmond.
Ms Dunne, in affidavits, said she was not the beneficiary of any sale, but that the ultimate beneficial owner was her stepson, John Dunne, who holds Yesreb for the benefit of himself (John) and of three children from her marriage to Seán Dunne.
She said, contrary to assertions by Mr Lehane, neither she nor Seán had had an interest in Walford since 2013. She claimed statements by Mr Lehane in that regard were false or overstatements to a culpable degree.
Ms Justice Costello said it was noteworthy Ms Dunne had revealed that Yesreb was “not a third party Cypriot company with which she had no connection”. Ms Dunne had loaned the money to Yesreb to enable it to buy it from her in 2013, the judge said.
It seemed to the judge it would be difficult to conclude, on the basis of the evidence presented, that Mr Lehane’s statements were false or overstated.
While Mr Lehane did not have a clear picture of the events, it seemed to him there was some connection between the Dunnes and Yesreb even though it (Yesreb) had initially been portrayed as a third party Cypriot company, she said.
In light of the emerging picture in relation to Yesreb, and the fact Mr Lehane had to “piece together information as best he could”, and the fact that Ms Dunne had now disclosed Yesreb was held in trust by her stepson, Mr Lehane’s mis-statement of the situation was explicable, she said.
It was also redeemed by Mr Lehane’s full account of the facts upon which he based his conclusion. This was a matter that any judge hearing the challenge to the €50 million freezing injunction may assess without any need for cross-examination of Mr Lehane, she said.
The court ultimately was not misled by Mr Lehane’s characterisation of Ms Dunne’s evidence as the basis for his conclusions, overstated as they were before the court, she said.
It may be that a judge hearing the challenge may conclude that the statements by Mr Lehane were incorrect and possibly unwarranted. However, the entirety of the evidence on which Mr Lehane based his conclusions was before the court and was relatively easy to read and digest, she said.
It was not a matter that required cross-examination of Mr Lehane in order to assess his alleged culpability in making these statements as had been argued on Ms Dunne’s behalf, she said.
The judge also saw no merit in Ms Dunne’s application to exclude from the case transcripts of evidence given by two lawyers who had acted for Seán Dunne in relation to the acquisition and later sale of Walford.