Sean Dunne bankruptcy extended for 12 years after 'wilful and deliberate' failure to co-operate with trustee

By Ann O'Loughlin

Sean Dunne's Irish bankruptcy has been extended for 12 years by the High Court over “wilful and deliberate” failure to co-operate with the trustee administering his bankruptcy, including not disclosing information about certain assets.

Ms Justice Caroline Costello said Mr Dunne, who was in court today, was a “deeply dishonest” witness who clearly told lies about a number of matters, engaged in “wholesale non-compliance” of his statutory obligations and demonstrated an “incredible” attitude.

“I find it difficult to conceive of a bankrupt who could be more obstructive and less co-operative with the bankruptcy process.”

The breaches of his statutory duties under the Bankruptcy Act were “extremely grave, serious, persistent and deliberate”.

She had “no hesitation” in concluding he had failed to co-operate and had failed to disclose or hidden information about assets from the Official Assignee Chris Lehane.

After the judgment, a statement issued by lawyers on behalf of Mr Dunne, who was due to automatically exit bankruptcy in late July 2016 and will not now until April 2028, described the ruling as “extraordinary”.

The statement said he was “deeply disappointed and shocked” and considered the judgment failed to address adequately the very complex issues of dual bankruptcy in Ireland and the US. He intended to lodge an appeal as soon as possible, it added.

Ulster Bank had in February 2013 petitioned the High Court to have Mr Dunne adjudicated bankrupt here after he had defaulted on some €164m loans.

A month later, Mr Dunne filed for bankruptcy in Connecticut when he claimed to have debts of $1bn and assets of $55m and a US bankruptcy trustee was appointed by a US court.

The Irish bankruptcy proceedings continued and in July 2013 the Irish High Court adjudicated Mr Dunne bankrupt.

Mr Lehane’s solicitors had written to Mr Dunne on several occasions from July 2013 seeking his full co-operation with the bankruptcy process.

In January 2016, Mr Dunne’s Is attorneys wrote to the OA’s lawyers saying Mr Dunne wanted to be discharged from bankruptcy and he would “fully co-operate” with the OA.

Mr Lehane’s solicitors replied asserting an absence of co-operation to date and welcomed the fact he had now decided to co-operate and sought information about several matters.

Mr Lehane subsequently said he had yet to receive necessary information and brought proceedings opposing Mr Dunne’s automatic discharge, due in July 2016, to allow for continued investigations into the bankrupt’s estate.

Under the amended Bankruptcy Act, the HIgh Court may extend a bankruptcy by up to 15 years if it considers that necessary.

Mr Dunne vehemently opposed any extension, made various claims against the OA and argued any extension would breach his property rights and was an attempt to inflict punishment

The case was heard over eight days by Ms Justice Costello.

In her reserved judgment, she said it was “difficult to conceive of a more thorough determination not to cooperate with the bankruptcy process and to seek to conceal and hide assets legitimately being investigated by the Official Assignee other than a cynical spurious attempt to preserve the illusion of co-operation in order to achieve a discharge from bankruptcy”.

She said she was extending the bankruptcy until April 29, 2028, not July 2028, to reflect a reduction of three months in light of Mr Dunne’s age.

She also ordered Mr Dunne to make monthly payments of €7,000 from September 25 last to May 25, 2021.

Mr Lehane, the judge observed, has described Mr Dunne as the “most duplicitous” bankrupt he had ever encountered and two judges involved in his US bankruptcy had also described him as non-cooperative.

She found him a deeply dishonest witness who remained “unrepentant” during the hearing, who knew exactly what he was doing and was determined at all costs to conceal as much information as possible from the OA whom he had likened to “a bounty hunter”.

This was not the case and Mr Lehane was simply trying to carry out his statutory obligations, she said.

Mr Dunne, she found, had “actively and intentionally” misled the Official Assignee about matters related to the ownership and control of a valuable property, “Walford”, on Dublin’s Shrewsbury Road.

Mr Dunne claims he acquired the property for €58m in 2005 in trust for his wife Gayle and issues concerning its sale and ownership remain to be decided in other court proceedings.

The judge also described as “at best disingenuous” claims maintained by Mr Dunne over a period that his principal address was a property at Stillman Lane, Connecticut, US, including over a time when that house was unfurnished or had minimal furniture and for sale.

Mr Dunne, she noted, had said he slept in townships in South Africa and enjoyed the “peace and quiet” of living in a house without furniture.

He had ultimately admitted his address was an address which had been provided by his wife to the Commercial Court in other proceedings.

Mr Dunne had unilaterally decided what information he would provide to the OA, what sections of the bankruptcy laws he would abide by and his actions had added greatly to the costs of administration of his estate and therefore impacted on creditors, she said.

His wholesale non-compliance began on the day he was adjudicated bankrupt and persisted until the date of this hearing under Section 85A of the Bankruptcy Act, she said.