Wednesday 20 September 2017

Blow to Sean Dunne as bid to quiz bankruptcy official fails

Sean Dunne. Photo: Collins
Sean Dunne. Photo: Collins
Shane Phelan

Shane Phelan

Bust developer Sean Dunne has failed to secure permission from the High Court to allow his lawyers cross examine his bankruptcy trustee.

The request was rejected by Ms Justice Caroline Costello, who found Mr Dunne had failed to demonstrate any conflicting information existed in affidavits filed by official assignee Christopher Lehane.

Mr Dunne had been seeking to have Mr Lehane quizzed after the bankruptcy official made a series of allegations against the one time ‘Baron of Ballsbridge’, who went bankrupt in 2013 with debts of close to €700m.

Mr Lehane is seeking to extend Mr Dunne’s period of bankruptcy while he investigates his belief the developer and his wife benefited to the tune of €12m from the recent sale to a Dermot Desmond-linked trust of Walford, a property on Dublin’s Shrewsbury Road.

The official assignee has also alleged Mr Dunne failed to cooperate in the realisation of assets for creditors and had hidden or failed to disclose income and assets.

In a written submission to the court, Mr Dunne said Mr Lehane had obtained a freezing order against the Lagoon Beach Hotel in South Africa and had issued proceedings against his wife, Gayle Killilea, and his son, John Dunne, “seeking to void bona fide transfers to me”.

Mr Dunne argued that as those proceedings were not concluded, Mr Lehane could not in fact state that he had failed to disclose income or assets.

He claimed it was “equitable and just” that his lawyers be allowed cross examine Mr Lehane given the gravity of his application to extend the bankruptcy period.

But in a ruling today, Ms Justice Costello said cross examination of Mr Lehane was not necessary for any issue which needed to be determined by the court.

“In this application it is the bankrupt’s conduct which is under scrutiny, not that of the official assignee,” she said.

She said Mr Dunne had not demonstrated the probable presence of conflict in affidavits filed by Mr Lehane.

The judge also said the court should be sparing in its exercise of powers to allow bankruptcy officials be cross examined.

Mr Lehane is himself seeking permission from the court to cross examine Mr Dunne about the sale of Walford last December.

Mr Dunne has always denied having a beneficial interest in the property, which he said was bought by his wife after he gifted her €58m for the purchase in 2005.

The property was sold to Cypriot-registered company, Yesreb Holdings, in 2013, which in turn sold it on to Mr Desmond’s Merdon Trust last December.

However, in an affidavit lodged with the High Court, Mr Lehane alleged Mr Dunne was the beneficial owner all along, up until the sale to Mr Desmond’s trust, and that the property should have been part of the bankruptcy estate.

It references an email from a Dublin accountant acting on behalf of Yesreb to a solicitor who has acted for Mr Dunne in the past.

This email stated that €12m was to be deposited with Zurich law firm Lenz & Staehlin. It also referenced a number of smaller payments which were to be made to companies linked to Yesreb.

“It is my view that it is reasonable to infer that the Dunnes or their offshore companies are in receipt of €12m,” the affidavit said.

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