Monday 5 December 2016

Dunne loses Supreme Court bid to annul bankruptcy

Judge says developer’s appeal raised ‘fundamental question’ on Irish law

Published 16/05/2015 | 02:30

Mr Dunne had argued Irish bankruptcy laws do not allow for a double or dual bankruptcy findings in different jurisdictions
Mr Dunne had argued Irish bankruptcy laws do not allow for a double or dual bankruptcy findings in different jurisdictions

Developer Sean Dunne has lost his Supreme Court bid to set aside his Irish bankruptcy.

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Mr Dunne, who sought to enter Chapter Seven bankruptcy in the United States weeks after Ulster Bank petitioned to have him made a bankrupt in Ireland, was not present in the Supreme Court yesterday as the three-judge court refused to annul his bankruptcy.

Ulster Bank petitioned to bankrupt the Carlow-born property developer, once dubbed "The Baron of Ballsbridge", on February 12, 2013, on foot of a €164.5m debt. Mr Dunne applied for bankruptcy in Connecticut in March of that year when he claimed to have debts of $1bn and assets of $55m.

The Supreme Court rejected claims by the now US-based developer that his July 2013 adjudication of bankruptcy by the Irish High Court cannot stand.

Mr Dunne had argued Irish bankruptcy laws do not allow for a double or dual bankruptcy findings in different jurisdictions.

Ulster Bank and Nama, Mr Dunne's largest creditor, both opposed his appeal and argued the Irish adjudication should remain undisturbed.

In July 2013, he was adjudicated bankrupt in Ireland. When the High Court refused in December 2013 to set aside that adjudication, Mr Dunne appealed to the Supreme Court.

But in a unanimous judgment on behalf of the Supreme Court yesterday, Miss Justice Mary Laffoy dismissed the appeal.

Judge Laffoy said the appeal raised "a fundamental question" in relation to the operation of Irish law on bankruptcy, meaning personal insolvency as distinct from corporate insolvency.

It was very surprising there was no record of the principal issue raised by Mr Dunne in this appeal having been previously addressed by the Irish courts, she added.

The judge rejected a number of the claims - including that the High Court had no jurisdiction to make the bankruptcy adjudication order, in the context of Mr Dunne having initiated bankruptcy proceedings in the US beforehand.

The High Court had jurisdiction when it heard Ulster Bank's petition on July 29, 2013, to make its order notwithstanding the pre-existence of the Chapter Seven proceedings in the US bankruptcy court, the judge said.

She also dismissed Mr Dunne's claim that the Irish bankruptcy adjudication order was obtained in breach of his procedural rights under the rules of the superior courts here, particularly his right to notice of the proceedings.

Mr Dunne's failure to appeal the High Court findings concerning whether there was compliance with certain requirements of the 1988 Bankruptcy Act meant the issue whether or not he was domiciled here when the bank's petition was presented in February 2013 meant that issue was "moot" or pointless, she found.

The requirements the relevant statutory provision had overall been complied with, she said. However, if it was necessary for the Supreme Court to determine the domicile issue, it would not be possible for the court to conclude Mr Dunne had proven he was not domiciled in the State on February 12, 2013, when the bank presented its petition to the High Court, she said.

Mr Dunne's own evidence, in an affidavit of September 2013, was that his then-status was of an "E2 non-Immigrant visa holder", the judge said.

Mr Dunne also said his eligibility for that "investor visa" arose from his wife Gayle having made an investment in "her US business Mountbrook LLC, which is a development company".

As well as that evidence, several other factors demonstrated "a continuing connection" between Mr Dunne and Ireland, the judge said.

This was "such as to lead to the conclusion that he has not established he has abandoned his domicile of origin permanently and indefinitely," she said.

Irish Independent

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