Nolan v Dildar Ltd (1)

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice David Barniville
• Judgment Date: 22 May 2020
• Neutral Citation: [2020] IEHC 243
• Date: 22 May 2020
• Docket Number: [2017 No. 6193 P.]

BETWEEN

ANN NOLAN, ELIZABETH NOLAN, JOAN NOLAN, RICHARD NOLAN, PATRICIA NOLAN, SALLY NOLAN

AND

QUEST CAPITAL TRUSTEES LIMITED

PLAINTIFFS

AND

DILDAR LIMITED, CIARAN DESMOND

AND

COLM S. MCGUIRE

AND

DERVAL M. O'HALLORAN, FORMERLY TRADING UNDER THE STYLE AND TITLE OF MCGUIRE DESMOND SOLICITORS, A FIRM, JOHN MILLETT, PINNACLE PENSIONER TRUSTEES LIMITED, DILDAR LIMITED

AND

JOHN MILLETT INDEPENDENT FINANCIAL ADVISORS LIMITED

AND BY ORDER

DILLON KENNY

AND

DARREN KENNY

AND BY FURTHER ORDER

PAUL KENNY

DEFENDANTS

AND BY ORDER

STEPHEN DECLAN MURPHY, EDEL MURPHY, KEVIN JOSEPH MCMAHON, JOHN LYNCH, EFG BANK AG, BNP PARIBAS WEALTH MANAGEMENT, UNITED OVERSEAS BANK LIMITED

AND

ALLIED FINANCE TRUST AG

THIRD PARTIES

[2020] IEHC 243

David Barniville J.

[2017 No. 6193 P.]

[2017 No. 170 COM.]

THE HIGH COURT

COMMERCIAL

Modular trial – Disclosure – Damages – Defendants seeking an order for a modular trial – Whether the plaintiffs’ claim should be confined to a monetary claim

Facts: The plaintiffs, a number of members of the Nolan family together with a corporate trustee entity, Quest Capital Trustees Ltd (Quest), as trustees of a Nolan family pension fund, brought proceedings. The seventh defendant, Dildar Ireland, and the ninth and tenth defendants, Messrs D Kenny (the Kenny defendants), made a number of interlocutory applications to the High Court. The Kenny defendants’ applications related to a proposed modular trial and their attempt to confine the plaintiffs’ claims, insofar as the first defendant, Dildar IOM, and development lands in Cork which were formerly owned by Nemo Rangers GAA Club (the Nemo lands) were concerned, to a monetary claim. Their applications also related to the plaintiffs’ undertakings as to damages and related matters.

Held by Barniville J that the Kenny defendants’ application for a modular trial should be refused, as should their application for an order that the plaintiffs’ claim in relation to Dildar IOM and the Nemo lands be confined to a monetary claim or that they should be directed to elect as to whether to pursue a proprietary claim or a monetary claim. However, Barniville J decided to direct the plaintiffs to provide certain further particulars in relation to the maximum value of their claim in relation to Dildar IOM and the Nemo lands. Barniville J held that such further particulars should be provided within a period to be agreed or ordered by the court. He decided that the Kenny defendants’ application for disclosure orders in relation to the plaintiffs’ personal resources should refused. Barniville J similarly decided that most of the Kenny defendants’ application in relation to further disclosure concerning the assets of the Oaklands Property Trust (the OPT) should also be refused. However, Barniville J decided that it would be appropriate to direct the plaintiffs to furnish certain further information and clarifications on affidavit in relation to the information provided concerning the cash assets of the OPT which were referred to by the plaintiffs’ counsel in court and subsequently in an affidavit sworn by Mr Kavanagh, a director of Quest, on 22nd August, 2019.

Barniville J held that the Kenny defendants’ application for the plaintiffs to fortify their undertaking as to damages should be refused as the Kenny defendants had not discharged the onus of demonstrating evidentially that the plaintiffs would not be in a position to honour their undertaking as to damages, should it be necessary for them to do so. In addition, Barniville J decided that the Kenny defendants’ application for an order vacating the order made by the High Court (Gilligan J) on 26th July, 2017 should also be refused, as should their application for an order vacating the lis pendens registered by the plaintiffs in relation to the Nemo lands on foot of the proceedings as the Kenny defendants had not established any good grounds for obtaining those reliefs.

Applications refused.

JUDGMENT of Mr. Justice David Barniville delivered on the 22nd day of May, 2020

Introduction

1 This judgment deals with a number of interlocutory applications made by three of the defendants in the proceedings, namely, Dildar Ltd. (“Dildar Ireland”), the seventh defendant, and Dillon Kenny and Darren Kenny, the ninth and tenth defendants, who are members of the Kenny family. I will refer to the applicants as the “Kenny defendants.” The proceedings have been brought by the plaintiffs who are a number of members of the Nolan family together with a corporate trustee entity, as trustees of a Nolan family pension fund.

2 It is quite difficult adequately to convey the extraordinary nature of the proceedings and of the claims and counterclaims being made by the various protagonists, which include allegations of fraud, deception and wrongdoing made by the plaintiffs against their legal and financial advisors and similar allegations by their legal advisors against a range of individuals, banks and other entities around the world, as well as allegations of wrongdoing of various kinds made as between the Nolan and Kenny families. At the centre of the various aspects of the proceedings is a money trail extending to jurisdictions including Panama, the British Virgin Islands (BVI), Hong Kong, Singapore, the United Arab Emirates (UAE), Germany, France, Switzerland and the Isle of Man, as well as this jurisdiction.

Summary of the Proceedings

3 It is not easy to briefly summarise the plaintiffs’ case in this introduction so this summary is necessarily lengthy. The plaintiffs’ case is that they entrusted a sum of in excess €6.96 million, representing a portion of the pension funds of thirteen members of the Nolan family, which were held in a unit trust entity called the Oaklands Property Trust (the “OPT”), to their solicitor, Ciaran Desmond (the second defendant)(“Mr. Desmond”), who at the relevant time was in practice in a firm of solicitors with the third and fourth defendants, and their pensions and financial advisor, John Millett (the fifth defendant) and companies operated by him as part of his business (the sixth and eighth defendants)(together, “Mr. Millett”).

4 The plaintiffs contend that, in a series of complex transactions, their funds were initially invested with an entity called Middle East Continental Development Limited (“MECD”) in the UAE (Dubai or Abu Dhabi) before being transferred to an account in a bank in Zurich called EFG Bank AG (“EFG Bank”), the fifth third party, in the name of a Panamanian company called Clear Vision Solutions SA (“CVSSA”) (referred to in the pleadings as the “Clear Vision account”). The plaintiffs allege that Mr. Desmond controlled CVSSA and that Mr. Millett controlled MECD. Mr. Millett denies that he ever controlled MECD, which he claims was established and controlled by Allied Finance Trust AG (“Allied Finance”), the eighth third party. Mr. Desmond disputes that he was in control of CVSSA, but admits that he was the sole nominee shareholder of that company on behalf of the seventh plaintiff, Quest Capital Trustees Limited (“Quest”), that the accounts of CVSSA in EFG Bank were controlled by Allied Finance and that the monies transferred into those accounts were transferred at the direction of Mr. Millett and by MECD, which he says was controlled and governed by Allied Finance.

5 Difficult as it may be to believe, the complexities multiply from that point on. The plaintiffs claim that, without their knowledge, Mr. Desmond, with the knowledge of Mr. Millett, procured CVSSA to pledge the cash deposits in the Clear Vision account as collateral for obtaining finance to purchase investment products to be issued by a number of the third parties in Singapore. Mr. Desmond disputes all of this and makes various allegations against the third parties in relation to the use of the funds contained in the Clear Vision account. It will be necessary to consider in greater detail what is alleged to have occurred later in the judgment when dealing with the application for the modular trial.

6 Critically for the purposes of the present applications, the plaintiffs also claim that in September, 2013, without their knowledge or consent, Mr. Desmond and Mr. Millett used approximately €2.828 million of the plaintiffs’ funds, which were in the Clear Vision account, to finance the purchase by an Isle of Man company, Dildar Limited (“Dildar IOM”), the first defendant, of development lands in Cork which were formerly owned by Nemo Rangers GAA Club (the “Nemo lands”), which were purchased by Dildar IOM that month for €3.017 million. As well as claiming damages and other reliefs against Mr. Desmond and Mr. Millett arising out of the alleged misappropriation of their funds, the plaintiffs also claim beneficial ownership of Dildar IOM and of the Nemo lands which they claim were purchased substantially with their funds. They rely on representations allegedly made by Mr. Millett to a corporate services company in the Isle of Man called Mann Made Corporate Services Limited (“Mann Made”), to the effect that the origin of the funds for the purchase of the Nemo lands was the OPT and that the beneficial owners were members of the Nolan family. They also allege that Mr. Millett represented to Mann Made that the Nolan family were the beneficial owners of Dildar IOM. The plaintiffs make a series of allegations against Paul Kenny and allege that he conspired with and also acted in concert with Mr. Millett in his dealings with Mann Made.

7 The plaintiffs’ claim of beneficial ownership of Dildar IOM and of the Nemo lands is, however, disputed by all of the defendants, including Mr. Desmond, Mr. Millett and the Kenny defendants (as well as by Paul Kenny who was more recently joined as a co-defendant to the proceedings and delivered a joint defence with the Kenny defendants). They all maintain that the Kenny family, who were also clients of Mr. Desmond and Mr. Millett, are the beneficial owners of Dildar...