Shut legal firm now, Law Society urges High Court
THE Law Society's regulation of practice committee is strongly opposed to a solicitors' firm with a deficit of more than €6.3m being allowed to continue to trade, the High Court heard yesterday.
High Court President Mr Justice Nicholas Kearns was told an independent accountant's report revealed that a proposal to repay the money owed, including €1.5m left in a will to the Archbishop of Dublin, by legal firm Sean O Ceallaigh & Co was not viable.
As a result of that report, conducted by David Rowe, and the other circumstances in the case, the Law Society's committee believes the firm should be shut down and its files distributed to new solicitors.
Last month, the court suspended the practising certificate of one the firm's partner solicitors Ruairi O Ceallaigh after he admitted losing millions on the stock exchange and property deals.
His brother and partner Cormac O Ceallaigh, who has done nothing wrong or dishonest in the running of the firm set up by their father Sean, is making efforts to repay the money.
When the matter came before the court yesterday, Mr Justice Kearns agreed to adjourn what he described as a matter of the "utmost gravity and seriousness" for four weeks to allow Cormac time to come up with an arrangement, deemed acceptable to all parties, that would allow him to continue to run the practice.
The adjournment was granted after Seamus O Tuathail, for Cormac, said that while Mr Rowe was not happy with the proposal, it was possible to come up with an alternative scheme of arrangement between the parties.
The judge said that while he was prepared to give Cormac O Ceallaigh time, he was not prepared to allow the matter to drag on. There were no objections to the matter's being adjourned.
Paul Anthony McDermott for the Law Society said after considering Mr Rowe's report, the committee concluded that based on the current proposal to repay the debts the firm does not have a viable future.
He said the liability was quite significant and he did not believe proposals put forward by the firm would enable it to cover what was owed. In addition to the deficit, both brothers have built up a large property portfolio and between them have liabilities of €40m.
Counsel said that the society is aware of liabilities of €6.3m owed by the firm. That is made up of a deficit in the client account of €2.4m, amounts subject to a double mortgage of €1.5m, an existing balance sheet deficit of €735,000 and claims against the firm amounting to approximately €1m. The remainder of the deficit consists of money owed to Permanent TSB and for stamp duty and penalties.
In an affidavit, Noreen MacCarthy, a chartered accountant with the Law Society's regulation department, said the society had not found anything inconsistent with the explanation that the deficit was due to the wrongful actions of Ruairi O Ceallaigh.
The society had not received any affidavit from the firm as to where where the missing funds had gone.
Ms McCarthy said serious issues arise concerning Cormac because a large deficit was allowed to build up in the firm in which he was an equal partner with his brother.