Tuesday 20 February 2018

Property developer Sean Dunne's wife Gayle must disclose certain documents, court hears

Gayle Killilea Dunne and Sean Dunne
Gayle Killilea Dunne and Sean Dunne

Aodhan O'Faolain

Gayle Dunne, wife of property developer Sean Dunne, must disclose certain documents related to alleged transfers by her husband to her of assets valued about €100m, the High Court ruled.

The documents include Mrs Dunne's tax returns from 2005 to 2014 insofar as they relate to those assets.

Chris Lehane, the official administering Sean Dunne's Irish bankruptcy, sought the documents for his proceedings against Mrs Dunne disputing two alleged asset transfer agreements between Sean Dunne and his wife in 2005 and 2008.

Those concerned assets including the Lagoon Beach Hotel, Cape Town, South Africa and interests in assets including properties in Co Dublin and Co Wicklow, including a property at Shrewsbury Road, Dublin.

Mr Dunne filed for bankruptcy in March 2013 in the US state of Connecticut, where he was based. Some months later, in July 2013, he was adjudicated bankrupt by the High Court in Ireland. He later failed to have that adjudication set aside.

Mrs Dunne, with addresses at Greenwich, Connecticut, and London, claims the disputed transfers were entered into as compensation, when she and Mr Dunne started a family, for her foregoing her career as a journalist and her prospective career as a lawyer.

She claims agreements were reached between herself and Mr Dunne in March 2005 and in 2008 and a formal share transfer took place in October 2008. 

She denies Mr Lehane's claim the alleged agreements have no legal status and their intended purpose was to put assets beyond the reach of Mr Dunne's creditors.

Mrs Dunne had argued the application for discovery of the documents was "speculative" and would impose an oppressive burden on her.

If she was incorrect in that, she agreed to make discovery in some categories and proposed certain alternative categories. 

She objected to discovery under two categories, her tax returns and documents relating to transfer of any interest in the Lagoon Beach Hotel (Proprietary) Ltd and any loan obligation by Mavior (formerly Mr Dunne's company Mountbrook Homes) to Castorena Ltd and by Castorena to Volcren Management Ltd. She also objected to discovery evidencing her ownership of shares in Enia Investments Ltd.

On November 25, Ms Justice Caroline Costello rejected arguments the discovery application was speculative and said she was satisfied the documents sought were relevant and necessary for the court's objective assessment of the transactions.

The judge said Mr Lehane was entitled to the discovery of several categories, including all documents relating to the alleged 2005 and 2008 agreements, to include documents concerning the reasons for entering those agreements and related to the transfer of the Shrewsbury Road property to entities controlled by Mrs Dunne.

She dismissed the objections by Mrs Dunne concerning the Lagoon Beach category of documents and to the category involving her tax returns from 2005 to the date these proceedings issued in 2014.

The returns were sought in the context of claims by Mr Lehane that Mrs Dunne would be obliged to make a tax return in relation to any asset received for her husband on a particular date, the judge noted.

Mrs Dunne must also discover documents evidencing any involvement by Sean Dunne in management or control of property allegedly transferred to her under the 2005 transaction and relating to assignment to her of loans, allegedly worth €1.95m in 2008 and €4m in 2005, due to Mr Dunne from Mavior and associated companies.

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