The four adult children of solicitor Brian O'Donnell have lost their court action aimed at preventing Bank of Ireland getting possession of their luxury home in Killiney, Co Dublin.
The bank is prepared to allow the children to remain in the house at Gorse Hill, Vico Road, until the end of September before exercising its right to possession of the property, Cian Ferriter SC, for the bank, told Mr Justice Brian McGovern after the judge dismissed the children’s case.
The bank considered this a reasonable time given the children had been in unlawful occupation of the property for some time, counsel said. The bank would also be pursuing a claim for damages.
It is understood lawyers for the children will seek to appeal Mr Justice McGovern’s rejection of their case to the Supreme Court. None of the children was in court yesterday.
The bank, which is seeking to enforce a €71 million judgment against Brian O’Donnell and his wife Dr Mary Patricia O’Donnell, had argued that it was entitled to possession of the property on foot of securities provided over loans made to the couple. The property, a house with three-and-a-half acres of land, is said to be worth €6-7 million although it was valued at €30 million in 2006.
The bank secured judgment against the O’Donnell parents at the Commercial Court in December 2011 over unpaid loans after a settlement reached between the sides broke down.
Beneficial owners
In their action, Blake, Blaise, Bruce and Alexandra O'Donnell alleged they are the legal and beneficial owners of Gorse Hill, the bank has no valid claim to it and the court should discharge Tom Kavanagh as the receiver appointed by the bank over the property. They also sought damages.
The house and land 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 in 1997 by the O’Donnell parents in favour of their children.
The dispute centred on whether Gorse Hill was an asset of the trust legally and beneficially owned by the children.
In his detailed judgment, Mr Justice McGovern found Vico Ltd acquired the beneficial interest in Gorse Hill by way of transactions based on a power of attorney scheme in 1998 and 2000. In 2006, full legal and beneficial title was transferred to Vico Ltd and duly registered, he found.
The expectation at that time was the borrowings of the parents would lead to their ultimately increasing the family estate which would ultimately benefit the children, he said.
While the children were entitled to a beneficial interest in the shares of Vico Ltd, it was clear the trust held shares, rather than any interest, in Gorse Hill, he said.
Having found Gorse Hill was not held by the trust, there was no proprietary claim open to the children as beneficiaries of the trust, he ruled.
The judge 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. He was satisfied the bank had approached security transactions related to the property with appropriate caution and diligence and had no reason to suspect a breach of trust.
