Dunne [A Bankrupt] and Others v Dunne and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Conor Dignam
• Judgment Date: 05 March 2025
• Neutral Citation: [2025] IEHC 120
• Court: High Court
• Docket Number: Record No. 2021/4915

Between

Seán Dunne (A Bankrupt), Bobby Luke Dunne (Suing by His Father and Next Friend Seán Dunne), Harrison Dunne (Suing by His Father and Next Friend Seán Dunne), Ryan Emmet Dunne (Suing by His Father and Next Friend Seán Dunne), Thomas Joseph Dunne (Suing by His Father and Next Friend Seán Dunne)

Plaintiff

and

John Dunne and Gayle Killilea and Yesreb Holdings Limited

Defendant

[2025] IEHC 120

Record No. 2021/4915

THE HIGH COURT

Exclusive jurisdiction – Forum non conveniens – Res judicata – Defendants seeking an order staying the plaintiffs’ proceedings – Whether Ireland was not the natural or appropriate forum to determine the proceedings

Facts: The first plaintiff, Mr S Dunne, issued proceedings. The amended plenary summons sought various injunctive and declaratory reliefs in respect of the “Bloem Trust” and “Bloem Trust Assets”. It also sought damages under various headings including for breach of duty, deceit, subterfuge and/or abuse of position of trust, embezzlement, breach of trust and/or mismanagement and/or misuse of trust assets. The defendants, Mr J Dunne, Ms Killilea and Yesreb Holdings Ltd, sought: (i) an order staying the plaintiffs’ proceedings on the ground that Ireland was not the natural or appropriate forum to determine the proceedings (forum non conveniens); (ii) a declaration that the Irish courts did not have jurisdiction to hear and determine the plaintiffs’ claim due to an applicable exclusive jurisdiction clause; and (iii) an order dismissing the proceedings as being res judicata on the ground that the issues had already been determined by the courts of the District of Connecticut in the United States.

Held by the High Court (Dignam J) that the courts of Ireland did not have jurisdiction in light of the express terms of the choice of jurisdiction clause in the “Bloem Settlement Deed”, as contained in the Deed of Amendment of Proper Law and Change of Governing Law of Administration of 30 November 2013. Dignam J held that, on the plaintiffs’ own case, the claim was concerned with the administration of the Bloem Settlement; it was not open to the plaintiffs to plead that the defendants were in breach of duty in respect of the administration of the Trust and then, in order to argue that the exclusive jurisdiction clause did not apply, to argue that the case was not about the administration of the estate. On that basis alone, Dignam J was satisfied that the exclusive jurisdiction clause applied; it followed that the choice of jurisdiction clause in the “Yesreb Settlement” was not the governing clause. In any event, Dignam J held that the plaintiffs had no standing to enforce the Yesreb Settlement Agreement as they were not parties to it. Dignam J was satisfied that the action had the most real and substantial connection with the United States courts and those courts were clearly and distinctly a more appropriate forum for the resolution of the core issues. Dignam J was not satisfied that there were sufficient grounds for concluding that, notwithstanding that the United States courts were the more appropriate forum, justice required that the proceedings be tried in Ireland.

Dignam J was satisfied on foot of the exclusive jurisdiction clause in the Bloem Settlement that the Court did not have jurisdiction and that the proceedings must be struck out. In the alternative, Dignam J was satisfied that the proceedings should be stayed on the basis that Ireland was not the appropriate jurisdiction.

Proceedings struck out.

Judgment of Mr. Justice Conor Dignam delivered on the 5 ^th day of March 2025

INTRODUCTION

1 . The defendants seek:

• (i) An Order staying the plaintiffs' proceedings on the ground that Ireland is not the natural or appropriate forum to determine the proceedings ( forum non conveniens);

• (ii) A declaration that the Irish courts do not have jurisdiction to hear and determine the plaintiffs' claim due to an applicable exclusive jurisdiction clause;

• (iii) An Order dismissing the proceedings as being res judicata on the ground that the issues have already been determined by the courts of the District of Connecticut in the United States.

2 . It is only necessary to consider the third relief if I refuse both of the other reliefs.

3 . The first-named plaintiff has been adjudicated bankrupt in Connecticut and in Ireland. The Official Assignee supports the defendants' application.

4 . From a consideration of all of the papers, the procedural and factual background to these proceedings and to this application appears to be as follows. It is important to note that there are many issues in dispute between the parties. I am not resolving any such disputes at this stage. I propose to, insofar as possible, set out matters which are not in dispute and to identify, whilst doing so, any matters which are in dispute.

5 . The first-named plaintiff and the second-named defendant were a married couple.

6 . In July 2005, the first-named plaintiff purchased a property on Shrewsbury Road in Dublin known as “Walford”. He claimed that he bought this for the second-named defendant, that she was the sole beneficial owner from the date of purchase and that he held it in trust for her subject to a declaration of trust. He subsequently claimed that it was held on trust for his children. He was replaced as trustee by Matsack Nominees Limited in 2006. This dispute about whether the first-named plaintiff bought and held the property in his own right or on behalf of others is a hotly contested issue.

7 . It appears that on the 23 ^rd December 2010, a trust known as “the Bloem Trust” or, more properly, “the Bloem Settlement” was established, under which a Trust Fund was to be held for the benefit of ‘the children and remoter issue of the first-named plaintiff, the second-named defendant, and any persons added to the class of beneficiaries’ under a power in the trust instrument. It originally included a choice of jurisdiction clause and a choice of law clause which identified Gibraltar and the laws of Gibraltar as the governing jurisdiction and laws respectively. These were changed to Cyprus and the laws of Cyprus and then, by deed of the 23 ^rd November 2013, the British Virgin Islands and their laws were designated as the relevant jurisdiction and law in place of those of Cyprus.

8 . On the 12 ^th February 2013, Ulster Bank Ireland presented a petition to the High Court to have the first-named plaintiff adjudicated bankrupt in Ireland.

9 . However, on the 29 ^th March 2013, the first-named plaintiff filed for bankruptcy in Connecticut. He was made bankrupt in Connecticut and a Mr. Richard Coan was appointed his trustee (“the US trustee”). That Order included a worldwide stay on creditors action against the first-named plaintiff.

10 . On the 29 ^th March 2013, the same day as the first-named plaintiff filed for bankruptcy in Connecticut, a deed of conveyance in respect of Walford was completed conveying Walford to the third-named defendant (“Yesreb”). The deed of conveyance was signed by the first-named plaintiff as the “original trustee” and by the second-named defendant as the “beneficial owner”. It appears that no money changed hands in this transaction and that the property was sold to Yesreb for €14,000,000 by way of a loan note which provided that the second-named defendant would be paid back if and when Yesreb subsequently sold the property. Yesreb is a Cypriot company. There is a dispute about the beneficial ownership of this company. The owner of the shares is the first-named defendant. He has claimed in U.S. Court filings that he owned them on behalf of the second-named defendant as an accommodation for her for tax purposes. It has also been claimed by the first-named plaintiff that the first-named defendant held the shares on behalf of three of his minor children (three of the minor plaintiffs). However, the first-named plaintiff also says at paragraph 14 of his grounding affidavit that the second-named defendant was at one stage the sole beneficial owner of the shares.

11 . On the 4 ^th June 2013, the Connecticut court varied the stay on creditors' actions to, inter alia, permit Ulster Bank to proceed with its bankruptcy petition in Ireland.

12 . The first-named plaintiff was adjudicated bankrupt in this jurisdiction on foot of that petition on the 29 ^th July 2013. The first-named plaintiff brought an application to show cause and on the 6 ^th December 2013, the High Court dismissed that application. The first-named plaintiff appealed to the Supreme Court and, on the 15 ^th May 2015, the Supreme Court dismissed the appeal and affirmed the order of adjudication. Since then the bankruptcies in Connecticut and this jurisdiction have both proceeded. The role of the Irish bankruptcy has been described by Laffoy J as “ an ad colligenda bona function, that is to say, a function to collect and preserve the assets of B.A.” ( AA v BA [2017] 3 IR 498).

13 . As far as I understand it, the first-named plaintiff claims that in 2015 Yesreb borrowed several million euros from the Bloem Settlement and used it to pay off part of the loan which the second-named defendant had given Yesreb to purchase Walford. The Bloem Settlement is noted in Yesreb's financial statements to be a related undertaking. In any event, the first-named plaintiff claims that Yesreb is encumbered in favour of the Bloem Trust.

14 . In 2016, steps were being taken to sell Walford. It seems the first-named plaintiff was heavily involved in this process. When this became known to the Official Assignee (and that the first-named plaintiff was involved) he instituted proceedings entitled “ Christopher Lehane as Official Assignee in Bankruptcy in the Estate of Seán Dunne v Yesreb Holdings Ltd Record No. 2016 10991P”. A lis pendens was registered in respect of Walford on the 9 ^th December 2016.

15 . On the 5 ^th January 2017, a solicitor acting on behalf of an entity known...