A €9.7 million judgment has been entered at the Commercial Court against bankrupt former Fianna Fáil councillor Gerard Killally in an action by a retired Garda superintendant and other investors over an alleged land deal "scam" in Co Offaly.
Judgments in amounts totalling €9.7 million were entered today by Mr Justice Micheal Peart against Mr Killally and a company, Charterhouse Mortgage Centre Ltd (in voluntary liquidation).
Mr Killally was declared bankrupt after the action was initiated and the Official Assignee in bankruptcy later said he would not be participating in the case. Judgment in default of defence was previously granted against Mr Killally and Charterhouse with damages to be assessed later.
The judge today made several orders and declarations arising from a settlement of the action by retired Garda supt Peter Wheeler and other investors against Mr Killally, a firm of solicitors and others over the Mount Lucas land deal in which Mr Killally allegedly made secret profits.
It was alleged Mr Killally, unknown to the investors, acquired lands at Mount Lucas, Daingean, for some €4.7 million and arranged a scheme under which they were sold to the investors for €10.6 million in May 2007 at a time when they believed Mr Killally was a co-investor with them.
Mr Wheeler, two of his brothers, six other investors and two companies had sued Mr Killally, a firm of solicitors, financial advisers and others over the deal completed in May 2007. Mr Killally did not participate but the other defendants denied the claims.
Mr Wheeler had told the court he had trusted Mr Killaly completely when considering whether to invest as he was chairman of Offaly County Council, had run in general elections and was of standing in the community.
The case opened in March 2011 and heard a deal of controversial evidence, including allegations against various solicitors in connection with the handling of the deal.
It was later adjourned for mediation talks and ultimately compromised in circumstances including agreements reached with insurers RSA and the Educational Building Society. EBS had provided loans related to the Mount Lucas site but was not a party to the case.
Against that background, Ronan Murphy SC, for the plaintiffs, asked the judge today to strike out the case against solicitors John Bourke and Francis O'Doherty, practising as Bourke & Company, Drimnagh Road, Walkinstown, Dublin. He also secured orders striking out the case against other defendants - Command Managed Services Ltd; two of its directors, Cyril Keegan and Cliff O'Brien; and Command Private Clients Ltd.
Mr Murphy said the terms of settlement are confidential subject to certain matters that had to be addressed by the court.
He said the underlying case was settled on foot of an agreement between his side and insurers RSA and following an agreement with the EBS. The settlement ended his case against Bourke & Co and the claim against that party should be struck out. Bourke & Co have brought a separate action over the handling of their defence in the investors' case by another law firm and also over insurance issues.
Mr Murphy said the settlement also provided that RSA, without admission of responsibility, acknowledged that certain allegations made against Peter Wheeler during his cross-examination were without foundation and were withdrawn unconditionally.
Mr Murphy said total judgment for €9.7 million was sought against the Official Assignee, on the account of Mr Killally, and Charterhouse (including sums totalling €2.3m relating to the actual investment sums put in by the plaintiffs).
Mr Justice Peart agreed to enter judgment as sought and also granted a declaration all the lands and shares vested in the Official Assignee, on account of Mr Killally, in relation to the Mount Lucas deal as defined in the plaintiffs' statement of claim, are held in trust for the plaintiffs.
When the judge asked if there was "any prospect of recovery" of the judgment, Mr Murphy said his clients' needs were "very substantially met" as a result of "goodwill and compromise" by EBS and RSA. Whether his clients recovered against anyone else in this climate was "very doubtful", he added.
The case called to mind the advice of Polonius to his son Laertes in William Shakespeare's tragedy, Hamlet, counsel added. "This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man."
