Bank of Ireland v O'Donnell

JurisdictionIreland
JudgeMr. Justice Charleton
Judgment Date26 October 2012
Neutral Citation[2012] IEHC 424
Docket Number[2012 No. 7293 P]
CourtHigh Court
Date26 October 2012

[2012] IEHC 424

THE HIGH COURT

[No. 7293P/2012]
Bank of Ireland v O'Donnell
Commercial

Between

The Governor and Company of the Bank of Ireland
Plaintiff

And

Blake O'Donnell, Bruce O'Donnell, Brian O'Donnell and Mary Patricia O'Donnell
Defendants

EEC REG 805/2004

EEC REG 44/2001 RECITAL 18

EEC REG 44/2001 ART 2

EEC REG 44/2001 ART 20

EEC REG 44/2001 ART 21(2)

EEC REG 44/2001 ART 27

EEC REG 44/2001 ART 2

EEC REG 44/2001 ART 3

EEC REG 44/2001 ART 6

EEC REG 44/2001 ART 10

EEC REG 44/2001 ART 11

EEC REG 44/2001 ART 15

EEC REG 44/2001 ART 16

EEC REG 44/2001 ART 17

EEC REG 44/2001 ART 38

EEC REG 44/2001 ART 40

GUBISCH MASCHINENFABRIK KG v PALUMBO 1987 ECR 4861

EEC REG 44/2001 ART 2(1)

EUROPEAN COMMUNITIES (CIVIL & COMMERCIAL JUDGMENT) REGS 2002 SI 152/2002 ART 11

DEUTSCHE BANK AG v MURTAGH 1995 2 IR 122

POPELY v POPELY UNREP 2006 4 IR 356

GONZALEZ v MAYER & ORS 2004 3 IR 326

EEC REG 44/2001 ART 22

COMPANIES ACT 1963 S205

Practice and procedure - Summary judgment - Jurisdiction - Enforcement uncontested debt - Resident - Bankruptcy - Hiving off assets - Centre of interest - Article 27 - Whether courts of England and Wales had jurisdiction - Whether case could be tried in Ireland - Council Regulation EC/44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters

Facts: The plaintiff bank sought to recover a large debt from the defendants and claimed that they had moved their centre of interest to London to achieve this. The bank sought pursuant to Council Regulation EC/805/2004 to impose a charge on the judgment debtors' shareholding in London. The defendants had filed for bankruptcy before the courts of England and Wales. The bank alleged that they had hived off their assets under a fraudulent scheme. The defendants made an application seeking that the High Court would decline jurisdiction in favour of a prior assumption of jurisdiction by the courts of England and Wales. The Court considered the applicability of Council Regulation EC/44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I). The Court considered whether the Regulation had any applicability to the foreign enforcement of an uncontested judgment debt.

Held by Charleton J. that the application would be dismissed. An application to enforce an uncontested judgment as not a cause of action within the meaning of the Brussels I Regulations. All of the defendants were ordinarily resident in Ireland or at least one of them indisputably. It was reasonable for the case to be tried in Ireland.

2

1.0 This is an application by the defendants that the High Court decline jurisdiction in favour of a prior assumption of jurisdiction by the courts of England and Wales. That application is misplaced.

3

1.1 The plaintiff is a bank. The defendants are a family. Mary Patricia O'Donnell and Brian O'Donnell are the mother and father. Blake O'Donnell and Bruce O'Donnell are their sons. Bruce O'Donnell is domiciled and has his main centre of interest in Ireland. That much is clear because he is a student in his late twenties and enrolled in university. Brian O'Donnell is a distinguished solicitor. He is also a property developer with interests in Ireland and England and elsewhere. He does not have a practising certificate from the Law Society of Ireland for 2012 because earlier in this year he withdrew his application to renew that entitlement. He had previously held that certificate for decades. Blake O'Donnell is also a distinguished solicitor; he continues to hold the necessary practising certificate from the Law Society of Ireland. Mary Patricia O'Donnell was, firstly, a psychiatrist and, most recently together with her husband, worked as a property developer.

4

1.2 Except for Bruce O'Donnell, studying here, the O'Donnells claim to have moved their centre of main interest from Dublin to London. Their interaction with the plaintiff bank is the origin of the issues before this Court. Over close to a decade the plaintiff bank lent Brian O'Donnell and Mary Patricia O'Donnell colossal sums of money for building projects. In the context of the national economic crisis from 2008 and the collapse in property prices in Ireland to about one third of their 2006/7 level and with the price of development land falling even more sharply, the O'Donnells found themselves financially embarrassed. The plaintiff bank issued proceedings when they could not repay on time and then obtained a judgment against them. It is from that judgment that this issue arises. A brief chronology will put the application into an appropriate context.

Chronology
2

2.0 The starting point is the default by Brian O'Donnell and Mary Patricia O'Donnell in their loan obligations to the plaintiff bank. In December 2010, the plaintiff bank commenced summary proceedings against them. In an action against only Brian O'Donnell and Mary Patricia O'Donnell, record number 2010 6100S, the bank sought the recovery of these loans. On 4 March 2011, a settlement agreement was concluded among these parties; this involved the preservation of their assets and the repayment of debts by instalments. A formal statement of those assets was drawn up on 18 March 2011 and furnished to the plaintiff bank. Controversy now arises in relation to two of those assets, which are situated in England.

3

2.1 Number 17 Columbus Courtyard, Canary Wharf, in London is a substantial office building which at one stage was valued at £124.5 million. The building is managed under a form of agreement by Kennor Advisory Limited, an entity registered in the British Virgin Islands. Though Brian O'Donnell and Mary Patricia O'Donnell are the apparent shareholders in the company, they claim that through a trust deed dated 15 December 2010 beneficial interest now rests with their son Blake O'Donnell. The company is in receipt of annual income of close to £0.5 million from that apparent work and the servicing of another building not material to these proceedings. The actual office building at Columbus Courtyard is owned by a company called Havergate Investments Limited; another British Virgin Islands registered entity. The plaintiff bank claims that this company owns a United Kingdom registered entity called Fourteen Ninety Two Limited through which ownership of the building is established. The relevant shares held by Brian O'Donnell and Mary Patricia O'Donnell are again apparently the subject of a trust dated 20 September 2005 in favour of their son Blake O'Donnell. The second asset is a substantial office building at 15 Westferry Circus, Canary Wharf, in London. Through a company registered in England called Hibernia 2005 Limited, a single share in which is registered to Brian O'Donnell and Mary Patricia O'Donnell, another company called Gort Limited is owned and, in turn, it apparently owns the building. Again it is claimed that there is a trust by these parties in favour of their son Blake O'Donnell, this one dated 25 May 2005. The value of this building was supposed at one stage to be £130 million.

4

2.2 These substantial real property assets, the plaintiff bank alleges, were included in the statement of assets on 18 March 2011 as being in the ownership of Brian O'Donnell and Mary Patricia O'Donnell in the context of the summary proceedings in Ireland for the repayment of debt.

5

2.3 In July 2011 the settlement broke down because instalment payments on the loans were not met. On 12 December 2011, the commercial division of this Court granted summary judgment against Brian O'Donnell and Mary Patricia O'Donnell in the sum of €71,575,991. It is to be noted that the entitlement of the plaintiff bank to that judgment was not contested.

6

2.4 In respect of one of the buildings in London, namely 15 Westferry Circus, the plaintiff bank under Council Regulation E.C./805/2004 of 21 April, 2004 creating a European Enforcement Order for uncontested claims, O.J. L 143/15 30. 4.2004 (the 'Enforcement Regulations'), sought before Chief Master Winegarten in London to impose a charge on the judgment debtors' shareholding in Hibernia 2005 Limited. On 6 February 2012, this application was granted. Meanwhile, in Ireland, a revised statement of affairs was filed by those judgment debtors in the ongoing summary proceedings in Ireland. The proceedings continued notwithstanding judgment because the plaintiff bank sought examination before the High Court in aid of enforcement. In that context, for the first time, it is claimed, an altered position on ownership was revealed whereby the beneficial interest in the relevant shares in both buildings was now alleged to be held on trust by Brian O'Donnell and Mary Patricia O'Donnell for the judgment debtors' son Blake O'Donnell. On 13 March 2012 in London, this question having been mentioned, Blake O'Donnell announced that he did not wish to be a party to the application to charge the relevant share in 15 Westferry Circus; this notwithstanding his claim of ownership. Chief Master Winegarten had now been told of the alleged trust and the Chief Master's order records that there appeared to be "an issue to be tried, namely, whether the defendants [Brian O'Donnell and Mary Patricia O'Donnell] have a beneficial interest in the one ordinary share held by them in Hibernia 2005 Limited".

7

2.5 Shortly thereafter on 27 March 2012, these defendants Brian O'Donnell and Mary Patricia O'Donnell filed for bankruptcy before the courts of England and Wales. In Ireland, the plaintiff bank over a number of days that April had the judgment debtors examined on oath before Kelly J in the High Court. On 27 April 2012, Chief Master Winegarten stayed the share charging judgment enforcement application pending the determination of the bankruptcy proceedings in England and Wales. Once...

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