An Isle of Man company owned the luxury family home of solicitor Brian O'Donnell in Killiney, Dublin, as part of a tax-planning scheme, the Commercial Court has heard.
Bank of Ireland, in disputing claims by Mr O'Donnell's four adult children that it is not entitled to possession of the house as part of efforts to enforce a €71 million judgment obtained against Mr O'Donnell and his wife, Dr Mary Patricia O'Donnell, contends it has a valid security over the property at Gorse Hill, Vico Road, once valued about €30 million but now valued at between €6 million and €7 million.
In a witness statement, Eoin Geoghegan said he was Bank of Ireland Private Banking's main relationship manager for the O'Donnells from 2006 to 2008.
He was involved with some significant transactions, including Mr O'Donnell's application in early 2006 for a €17 million loan, mostly to restructure existing loans with Anglo Irish Bank. Mr Geoghegan understood Gorse Hill was owned by Vico Ltd, an Isle of Man company which Mr O'Donnell had set up in 1997, and Vico held the property as part of a tax-planning scheme.
He was also aware the shares in Vico Ltd were held by a discretionary trust in the Isle of Man, which the O’Donnells had set up. He did not know who the beneficiaries were and had no contact with the trustees.
In June 2006, Vico resolved to provide guarantees and indemnities over the property, he said. He had read witness statements of the O’Donnell children suggesting the bank was either a party to, or the proposer of the trust, and he believed such suggestions to be untrue.
In reply to Cian Ferriter SC, for the bank, he said there was no caveat about the charge sought by the bank over Gorse Hill and it was to be a simple legal charge over the property.
Cross-examined by Ross Maguire SC, for the children, Mr Geoghegan said he had the impression Gorse Hill was owned by Mr O'Donnell via a trust entity he ultimately owned.
Alexandra O’Donnell, in an affidavit, said Gorse Hill was placed into the trust via a mechanism under which the shares of the legal owner of the property – Vico Ltd – were held in trust for the four children.
Mr Justice Brian McGovern will hear further evidence from a bank witness today.
