Gayle Killilea must face questions over ‘fraud’
Court ruling against wife of bankrupt Seán Dunne
GAYLE Killilea, the wife of bankrupt developer Seán Dunne, has been told by the High Court she must face questioning over an allegedly fraudulent transfer of property.
The ruling comes a day after Mr Dunne saw his bankruptcy period extended by a further 12 years, as a judge described him as ‘deeply dishonest’.
Judge Brian McGovern has now ruled against Ms Killilea’s attempt to dismiss court proceedings brought by Chris Lehane, the courtappointed bankruptcy official.
Mr Lehane is investigating allegations that director’s loans and shares controlled by Mr Dunne in a company called Mavior were fraudulently transferred to Ms Killilea in an effort to defeat Mr Dunne’s creditors.
Mavior had owned some of the fixtures and fittings of the Jury’s and Berkeley Court Hotels in Dublin, among other assets.
Mr Dunne paid €275million for Jury’s Hotel and €125million for the Berkeley Court in Ballsbridge in 2005, but lost them to Ulster Bank and a syndicate of lenders after the financial collapse. Mavior gave up possession of the fixtures and fittings.
Ms Killilea also faces questions about the transfer of the Lagoon Beach Hotel in Cape Town, South Africa, and any other assets transferred to her by Mr Dunne under a February 2008 agreement.
She has denied all the claims. She indicated that she believed these issues should be dealt with in the US, where her husband has also been declared bankrupt. She had also claimed it was an ‘abuse of process’ for Mr Lehane to be investigating the transfers.
But Judge McGovern said the fraudulent transfer claims had already been dismissed or discontinued in the US, so as to enable Mr Lehane to maintain an action against Ms Killilea in Ireland.
He added: ‘It is quite clear that if the proceedings were to take place in the US, they would involve questions of Irish law, and evidence of Irish law would have to be ruled on by a jury.’
He said this supported Mr Lehane’s argument that the US was not a convenient forum for such procedures. The judge added that the expert witnesses would be Irish accountants, and that all of the assets claimed were Irish with the exception of the Lagoon Beach in South Africa, which was held through an Irish company.
‘The transfer culminated in an Irish share transfer and the assignment of the Irish loans, which were payable by Irish companies,’ Judge McGovern said.
‘None of the assets, loans, transactions, share transfers or assignments, which are the subject matter of these proceedings, have any connection with the United States, and this has been recognised by the US courts.’
He concluded: ‘As the issues are subject to Irish law and the issues connected with Ireland, and furthermore have no obvious connection with the United States, I would dismiss the defendant’s [Ms Killilea’s] motion.’
In a separate action on Tuesday, High Court judge Caroline Costello called Mr Dunne a ‘deeply dishonest’ witness who lied about his knowledge of the ownership of a seven-bedroom mansion on Dublin’s Shrewsbury Road purchased in 2005 for €58million.
Mr Dunne had claimed in court that the house, the most expensive in Ireland at the time, was purchased in trust for his wife.
Judge Costello ruled he was engaged in ‘wholesale non-compliance’ with Mr Lehane and showed an ‘incredible’ attitude.
‘I find it difficult to conceive of a bankrupt who could be more obstructive and less co-operative with the bankruptcy process,’ she said. His breaches of the Bankruptcy Act were ‘extremely grave, serious, persistent and deliberate’, she said, adding she had ‘no hesitation’ in concluding he had failed to co-operate with Mr Lehane.
In a statement afterwards, Mr Dunne, who must now stay in bankruptcy until 2028, described the ruling as ‘extraordinary’ and said he would appeal.
She has denied all the claims