Solicitor denies claim on secret profits

A SOLICITOR has rejected as “baseless” a claim by former Offaly Fianna Fáil councillor Gerard Killally that she had advised him it was “okay” not to disclose he had made secret profits in land deals to his partners in those deals.

Solicitor Miriam Kavanagh had rather told Mr Killally what he was doing was “wrong, immoral and constituted sharp practice”, her counsel Paul Sreenan SC said yesterday. When Ms Kavanagh sought to inform the partners who were “duped” by Mr Killally, he had invoked client confidentiality against her, it was also alleged.

Ms Kavanagh has been joined by Mr Justice Peter Kelly as a third party to proceedings by a number of former partners against Mr Killally and former Offaly GAA football manager Richard Connor over property transactions, including two deals where both men admitted making secret profits and not disclosing them to the other partners.

Among the claims by the plaintiffs – Adrian Daly, Racefield House, Cappincur, Tullamore; Declan Guing, Carrick Road, Edenderry; and Frank Lawlor, Clonmullen Lodge, Edenderry – are that both defendants procured transactions under which they first acquired lands known as the Downshire and Daingean Road lands for some €3.5 million less than ultimately paid by the partnership.

The judge yesterday ruled the former partners were entitled to judgment against Mr Killally over those two deals.

Having last week entered judgment against Mr Connor concerning the same deals, the judge fixed June 30th next for a hearing to assess the sums due to the plaintiffs and to determine their claims related to other alleged deals.

That hearing will also deal with Mr Killally’s claim of indemnity or contribution against Ms Kavanagh, practising as Miriam Kavanagh Company Solicitors, of Jamestown, Ballybrittas, Co Laois, over her alleged advice concerning the deals.

The court will next Monday hear Mr Killally’s application to vary an €8 million freezing order imposed on his and Mr Connor’s bank accounts and will also decide whether to admit to the Commercial Court separate proceedings by the plaintiffs alleging Ms Kavanagh failed in her professional duty to advise them a secret profit was being made by fellow partners.

At the outset of yesterday’s hearing, Mr Sreenan, for Ms Kavanagh, said she strongly objected to very damaging allegations being made against her last week in open court without any notice to her and when she was not a party to the case.

She “very trenchantly denied” those claims.

It was his case Mr Killally was “playing fast and loose with the facts”, counsel said. Why would Mr Killally, a county councillor, need to be advised of something that was so clearly the difference between right and wrong, he asked.

Counsel said previous solicitors for Mr Killally had written in December last to Ms Kavanagh alleging she had failed to advise Mr Killally of his obligation to disclose to the other partners that he and Mr Connor had previously purchased lands then sold on to the partnerships.

Ernest Cantillon, solicitor for Ms Kavanagh, had replied rejecting the “scurrilous allegations” and stating she had advised Mr Killally what he was doing was “wrong, immoral and constituted sharp practice”.

After hearing from counsel for the sides, Mr Justice Kelly said Mr Killally had admitted making secret profits he did not disclose. The judge said partners must behave honestly and straightforwardly in their dealings and it was alleged Mr Killally and Mr Connor had not behaved consistently with those obligations.

He granted an application by Shane Murphy SC, for Mr Lawlor and Mr Guing, for judgment against Mr Killally over the admitted secret profits related to the Daingean Road and Downshire land deals.

Noting Mr Killally was seeking indemnity against Ms Kavanagh, the judge said Mr Killally was, in that regard, “changing his story as he goes along”.

He had initially alleged she failed to advise him of the need to disclose matters to his partners, she had rejected that as audacious.

It was later alleged she had advised him it was “okay” to behave as he had but her solicitors denied that claim and said she had in fact advised him what he was doing was wrong and immoral.

The issue of what advice was provided would have to await all the evidence, the judge said.

Mr Killally had met the low standard of proof required to have Ms Kavanagh joined as a third party to the case.