Friday 22 September 2017

O'Donnells fail in bid to have bankruptcy overturned

Brian O'Donnell and his wife Mary Patricia leaving the court of appeal in Dublin during an earlier appeal
Brian O'Donnell and his wife Mary Patricia leaving the court of appeal in Dublin during an earlier appeal

Tim Healy

Retired solicitor Brian O'Donnell and his wife Dr Mary Patricia have failed in their bid to have their bankruptcy overturned.

The High Court's Ms Justice Caroline Costello said the O'Donnells had not advanced any new evidence as a basis for an annulment of the bankruptcy obtained against them by Bank of Ireland (BOI) in 2013.

They had sought to advance arguments which they were either in a position to make, or could with reasonable diligence, have made as early as March 2011, she said.

It would be an abuse of process to allow them advance an argument now that it was Bank of Ireland Private Banking (BOIPB) rather than BOI they were dealing with. BOIPB was not a licensed bank, the O'Donnells had claimed.

The O'Donnells had to establish there was fraud or concealment of the true facts by the bank in order to succeed, she said.   There was no dispute the facility letters, security documents and statements of account in this case and the O'Donnells did not deny they had possession of those, she said.

The judge rejected Mr O'Donnell's submission the bank concealed the true identity of the lender.   She found it extremely hard to believe people borrowing substantial sums would not consider carefully all the documentation prior to entering into such a significant commitment.

They could not "escape their own failure in that regard".

Even if they had misunderstood their obligations, they were legally represented and had the benefit of legal advice when they reached an agreement in 2011 with the bank in relation to the €71m debt.

There was no explanation given by the O'Donnells as to why, during three years since that agreement, the issue of whether it was BOI or BOIPB they were dealing with.

The judge also said the reliance by the O'Donnells on 2011 judgment when they sought bankruptcy in London (where the regime was more lenient) was fatal to their claim.

Mr O'Donnell had claimed they only "twigged" in 2014 that all their dealings were with BOIPB, she said.

Whether or not BOIPB was licensed to carry on business as a bank is irrelevant, she said.   Its status was apparent from its website and cannot be said to have been concealed, much less fraudulently concealed, by the bank.

Even at this stage, they had not made identified any concealment and had many opportunities to do so, she said.  To permit them to do so now would be a gross breach of rules already laid down by case law.

There had been no fraud or abuse of process by the bank any stage during hearings here or in England, she said.

"Far from existing compelling reasons to annul the adjudications in these cases, no grounds have been advanced which, my opinion, lead to the conclusion that the ought not to have been adjudicated bankrupt", she said.

Mr O'Donnell interrupted Ms Justice O'Donnell while she was reading her judgment to say he had to be in the Supreme Court at 10.45am.   The judge agreed to adjourn further consideration of her judgment to April 30.

Before leaving, Mr O'Donnell said they would be appealing the judge's decision.

Mr O'Donnell then went directly to the Supreme Court where he is seeking to lodge an appeal against the Court of Appeal's decision on Wednesday that he and his wife vacate the former family home in Killiney, Co Dublin.

However, following a conversation with the Supreme Court registrar, Mr O'Donnell left the court.

In his bankruptcy challenge,  Mr O'Donnell argued part of their case was that the €71.5m judgment obtained against them, and which led to their bankruptcy, had been obtained by deception.

That deception involved not just officials of the bank but named staff of Arthur Cox and senior counsel who represented the bank at hearings which led to the judgment in the Commercial Court, he said.

He and his wife had been "bamboozled" into signing the agreement under which they consented to the €71.5m judgment over a lunch hour in March 2011.

It was only late last year when going through documentation they "really twigged what happened here"  and that it was the unlicensed  Bank of Ireland Private Banking (BOIBP) rather than BOI they had been dealing with all the time.

Where fraud is involved, as is what occurred here, there is no time limit on litigation.

"It is the oldest con in the book and we fell for it", he said.

Mark Sanfey Sanfey, for the bank, said accusations which Mr O'Donnell had bandied about" in relation to not just bank officials but all the lawyers involved were "without the slightest shred of corroboration or any explanation".

His claims he was bamboozled and that the judgment against him and his wife was obtained by fraudulent conduct were simply an attempt to get round "the fact that he is clearly prohibited by law" from overturning the €71m  judgment, counsel said.

To suggest he honestly believed it was BOIBP rather than BoI which loaned the money simply "stretches the matter beyond belief".

The claim that the O'Donnells were put under extraordinary pressure to sign the judgment agreement was not borne out by the facts.

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