Couple accept they should have declared luxury Spanish villa
A couple’s secret ownership of a luxury Spanish property when they successfully applied to have millions of euro in debt written off “beggars belief”, their mortgage lender has told the High Court.
A judge is now considering whether to terminate the personal insolvency arrangements (PIAs) granted to convicted thief Tom Colton (46) – better known as “the psychic swindler” – and his wife Linda (46) over their failure to disclose their ownership of the villa in Lanzarote.
Mr Justice Alexander Owens said he would give a decision at a later date after hearing an application from personal insolvency practitioner (PIP) Eugene McDarby for the termination of the PIAs.
Mr McDarby’s counsel Keith Farry said Mr Colton had come up with “the Fr Ted excuse” of “the money was merely resting in my account” in trying to convince the court he and his wife were not the beneficial owners of the property.
The couple has claimed their failure to disclose the villa was down to a “misunderstanding” on their part.
But their mortgage lender, Mars Capital Finance, told the court none of their explanations were convincing.
Mr and Mrs Colton, who run a company which provides celebrants for “spiritual” wedding ceremonies, will lose protection from creditors and could potentially face bankruptcy if the PIAs are terminated.
The husband and wife secured debt write-offs of €2.7m and €2m respectively last February when arrangements devised on their behalf by Mr McDarby were approved by the court.
However, an Irish Independent investigation, published in April, revealed the Coltons were the registered owners of a plush holiday home with a private swimming pool and hot tub in Playa Blanca.
The villa was bought in their names last September, just a fortnight before they both filed sworn prescribed financial statements of their assets and liabilities which made no mention of the property. It was subsequently extensively renovated and is now said to be worth over €400,000.
Following the publication of the story, Mr McDarby filed papers seeking the termination of the PIAs on grounds of “material inaccuracy” in the financial statements provided by the couple and their failure to fully disclose all assets, income and liabilities to him.
It is the first time such an application has been made in the High Court.
The PIP’s counsel, Mr Farry, yesterday told the court that faith in the personal insolvency system was at stake.
The termination application was supported by Mars, which has described the couple’s behaviour as “unacceptable”.
The mortgage holder had voted in favour of the PIAs, agreeing to restructure the couple’s €680,000 mortgage debt so they could save their family home in Celbridge, Co Kildare. Under the deal, around €40,000 of what they owed to Mars was written off and the couple were given a new 22-year term with an attractive tracker rate to repay the remaining €640,000.
But Niall Ó hUiginn, counsel for Mars, said the fund only supported the PIAs on the basis the information in them was true and accurate.
In an affidavit, Joe Carter, head of recoveries at Mars, said: “The integrity of the personal insolvency system depends on the accuracy of information supplied by debtors to their personal insolvency practitioners.
“Frankly, it beggars belief that the debtors swore prescribed financial statements which omitted to mention a significant foreign property transaction which had completed only two weeks earlier.”
Mr Colton was jailed in 2015 and restricted as a company director for stealing €320,000 from an elderly couple while working as their accountant. He now claims to be a medium who can communicate with the dead. In recent years the couple has run their wedding business through Grá Agus Solus, a company in which Mrs Colton owns all the shares.
In affidavits, the Coltons said they took “full responsibility” for the non-disclosure of the villa but claimed this was “caused solely by a misunderstanding” on their behalf and they had not consciously decided to hide the purchase.
They claimed that due to pandemic restrictions on wedding ceremonies the company lost €158,573 during 2020.
The couple decided to purchase a foreign property which could be rented out to generate revenue for the business.
They said they were advised it would be more difficult for one to be purchased directly by the business, so they instead decided to buy it in their own names. Both said the beneficial owner of the villa was the company and that they were merely acting as trustees.
“They have put their hands up and accepted the fact there are omissions and the fact information should have been given to Mr McDarby,” said Michael O’Sullivan, counsel for the Coltons. He urged the judge not to terminate the PIAs but to instead order Mr McDarby to prepare a proposal to vary the arrangements.
Mr Justice Owens said he would have to think about what decision to make as there would be implications for future cases.
“It is not exactly very helpful that a man who has already committed a crime of dishonesty and gone to jail for it is engaging in all of this,” the judge said.
Until recently, Mr Colton was a prominent administrator and match official with Leinster Rugby, taking charge of under-age and lower level adult games in Dublin.
However, last month Leinster Rugby Branch said he had “stepped away from all refereeing duties until such time as his personal matters are concluded”.