Financier Dermot Desmond has said the official handling developer Seán Dunne’s bankruptcy is not correct in claiming a house on Shrewsbury Road in Dublin is beneficially owned by Mr Dunne.
Mr Desmond, in an affidavit to the Commercial Court, said the property, Walford – bought in 2005 by Mr Dunne for €58 million – was bought in December last year by Celtic Trustees Ltd (CTL) for €14.25 million.
Mr Desmond, of Plans-Mayens, Crans Montana, Switzerland, wants the court to declare CTL has acquired good title to the property which Mr Dunne has claimed he had bought in trust for his wife, Gayle Dunne, in 2005.
His case, which was admitted to the fast-track Commercial Court on Monday, on consent, is against the official assignee, Chris Lehane, who claims Mr Dunne is the beneficial owner of Walford.
Beneficial owner
Mr Lehane says the proceeds of Walford’s sale last December should go to Mr Dunne’s bankrupt estate to help pay off his debts.
Mr Desmond has brought the case in his capacity as settlor of the Merdon Trust, whose sole trustee is CTL.
Mr Desmond said the house was sold in December to CTL by a Cyprus-registered company, Yesreb Holdings.
Mr Lehane then registered a “lis pendens” on the property, a legal claim over it which may have to be resolved by the courts.
Given the existence of the lis pendens, the purchase price, less capital gains and withholding tax (totalling €12.1 million) was paid into an escrow account.
Good title
A request from CTL to Mr Lehane to vacate the lis pendens was refused, Mr Desmond said.
While Mr Lehane continues to assert CTL has not acquired good title, “he had failed to clearly articulate the legal basis for that assertion” or provided “any evidence capable of substanting that assertion”, he said.
Mr Lehane has notably also not commenced any proceedings against CTL challenging title, he added.
In his affidavit, Mr Desmond said that after Mr Dunne bought the property in 2005 it was, from 2006, held in trust by Matsack Nominees Ltd at a time when there was no dispute about Mr Dunne’s solvency.
Matsack transferred the title to Yesreb in March 2013 and “we have seen no evidence” that undermines the interest of Matsack or the validity of the transfer to Yesreb, he said.
While Mr Lehane appeared to be claiming Yesreb was beneficially owned by Seán Dunne, Mr Desmond said he did “not believe this is correct”. Even if Mr Lehane were to succeed in establishing Mr Dunne was the beneficial owner, Mr Desmond’s advice was this would not affect CTL’s title.
In light of the fact that Mr Lehane has refused to withdraw his assertions that CTL has not provided good title, Mr Desmond said CTL was left with no option but to bring these proceedings.
The case comes back to court in October.
