Bankrupt property developer Seán Dunne should be held in contempt for a third time for failing to produce emails disclosing details of his business dealings from 2010, a US judge has recommended.
Connecticut magistrate Judge Robert Spector found that Mr Dunne failed to provide emails from three Gmail accounts and two accounts connected with his Irish firm Mountbrook to his US bankruptcy trustee in a long-running US court action taken against Mr Dunne and his wife, former gossip columnist Gayle Killilea.
The judge, in a US District Court ruling on Monday, criticised Mr Dunne, who has already been the subject of two contempt orders, for his "continued dilatory actions and recalcitrant behaviour" ahead of the May 2019 trial of the action taken by trustee Rich Coan.
Judge Spector said in his 31-page ruling that he was “hard-pressed to believe, based on the history of conduct by the debtor [Mr Dunne] in this case, that the debtor will ever comply with his discovery obligations”.
Mr Coan has been seeking Mr Dunne’s emails since July 2016 as part of his US court action seeking to reverse tens of millions of euro worth of properties transferred to Ms Killilea.
Mr Dunne was first held in contempt by the US Bankruptcy Court in Connecticut in August 2017 and held in further contempt by the US District Court in January 2018 for failing to hand over his emails.
Walford
Among the emails sought are records relating to the 2013 sale of Walford, the house on Shrewsbury Road in Dublin 4 that he bought for a record €58 million eight years earlier and later transferred to Ms Killilea.
The 64-year-old Carlow businessman, one of the most prolific developers of the Celtic Tiger property boom, filed for bankruptcy in the US in 2013 with debts of about €700 million after relocating to Connecticut.
He was also adjudicated a bankrupt in Ireland later that year.
Judge Spector recommended that Mr Dunne face “an adverse inference instruction” at trial, an extreme legal remedy that reverses the standard burden of proof.
The District Court could also sanction Mr Dunne by making him pay the trustee’s legal fees and by compelling him to continuing using and paying for an IT consultant to search for emails, text messages and other electronically stored information using additional court-ordered search terms.
The court could also rule that the “privilege logs” he has filed in the case are “inadequate” to allow Mr Dunne to claim privilege over third-party communications, shielding them from disclosure in the case.
Mr Dunne has been embroiled in a long-running legal action with both his Irish and US bankruptcy officials since filing for bankruptcy six years ago.
‘Wilful and deliberate’
In October 2018, a High Court judge extended Mr Dunne's Irish bankruptcy for 12 years, until April 2028, for his "wilful and deliberate" failure to co-operate with the court official administering his Irish bankruptcy.
Ms Justice Caroline Costello described the developer in her ruling as "deeply dishonest".?
In Monday’s US court ruling, Judge Spector found that Mr Coan had established “with clear and convincing evidence” that Mr Dunne’s production of emails in the discovery in the case was “incomplete.”
The judge said Mr Dunne admitted to deleting two Google email accounts in 2013 after filing for bankruptcy while party to "these multiple limitations".
Mr Dunne retained an IT consultant to help him source the emails from the five accounts in November 2018 “after having been the subject of eight motions to compel or for contempt”.
Mr Dunne "has not explained why he cannot access these accounts that belonged to him"
In a section entitled "discovery misconduct", the judge found Mr Dunne had said that his two Mountbrook email addresses had not been used since "2011/2012" and that the server for those emails was left at an office in the Berkeley Court Hotel in Dublin in 2012 when he gave up possession of the hotel to the creditor, Ulster Bank.
The judge said, however, that the trustee had received documents from the defendants in the case showing emails sent from the Mountbrook email addresses as late as September 2013.
Mr Dunne “has not explained why he cannot access these accounts that belonged to him”, said the judge.
‘Ultimate involvement’
The ruling quotes Mr Coan’s belief that the two deleted email accounts – “seandunnebb@gmail.com” and “seandunne365@gmail.com” – will demonstrate Mr Dunne’s “ultimate involvement” in Walford.
The judge referred to the trustee’s evidence that Mr Dunne directed the agent involved in the sale of Walford to use his personal Google account rather than his work email, and then told him to create another Google account, “rrwalford@gmail.com”.
In addition, Mr Dunne’s instructed others to “delete all emails” concerning Walford. The judge includes an email sent by Mr Dunne in February 2013 asking an individual to delete all emails and to check her files for hard copies, which he promises to collect from her if she finds any.
Documents relating to Walford were specifically requested by Mr Coan in his initial July 2016 subpoena to Mr Dunne seeking the emails.
