An English aristocrat who once owned and later rented one of Ireland’s finest Palladian houses was not in when eviction agents launched a “dawn raid” and took possession of the estate last May, the Commercial Court has heard.
Lord George Magan was not in Castletown Cox in Co Kilkenny that day because it's his secondary residence and his main home is in Cambridge Place, Kensington, London, the court was told.
He regularly used the house prior to the raid on May 23rd when “a large gang” employed by a trust originally set up by Lord Magan cut chains and locks to forcibly enter the property, his counsel Hugh O’Neill SC said.
That was a criminal offence because Lord Mangan had served notice he was disputing a termination of tenancy, counsel said.
Despite continuing to assert that, the property has not been returned to him.
The takeover arose out of a dispute between Lord Mangan and the Castletown Foundation, a trust established by Lord Mangan to benefit two of his children, Edward and Henrietta.
In 2005, he sold the 36,000sq ft mansion, and 513 acres of farmland, to the trust. Under the structure put in place, he was to have rights of residence whereby he was to pay €100,000 a year in rent.
The trust claims, since 2013, he has failed to pay any rent and it applied on Thursday for summary judgment for €571,000 in rent arrears.
Maintenance
Lord Magan opposes the application, saying he has had to spend €361,000 on upkeep since the trust stopped contributing towards maintenance and that sum should be offset against the rent.
He also claims he is entitled to a new tenancy and has claimed for unlawful exclusion from the property in circumstances where he referred the matter of a tenancy to the Residential Tenancies Board for determination.
The trust says it costs half a million euro a year to look after the property. With just €100,000 rental income and fees from a licence to use the house’s world-class collection of fine art, paintings and furniture, most of which are owned by a separate trust, it is not enough to pay the bills, it says.
This was in circumstances of the €570,000 rent arrears and some €1.8 million also due under the licence for use of art and furniture, it says.
It claims Lord Magan also owes another €2.1 million for loans to him from the trustees to meet personal expenditure unrelated to Castletown Cox.
Alongside this, some €14.5 million in borrowings are secured on the property to a finance company, Sancus Jersey.
Rossa Fanning SC, for the Castletown Foundation, said the professional managers of the trust, Yew Tree Trustees (formerly DW Trustees), had made a principled decision that the only way to relieve the financial strain on the trust since 2015 was "to bite the bullet and sell Castletown Cox".
Sale agreement
An agreement was reached this year to sell it to an unidentified buyer for more than €19 million and the sale was due to close last August. A month later, Sancus Jersey could have exercised its right to appoint a receiver to the property because of default on the unpaid €14.5 million, counsel said.
He said the intended purchaser paid off the debt in anticipation of securing ownership of the house. This was because his client was concerned, if Sancus appointed a receiver, there would be a “fire sale” and significant value would be lost.
Mr Fanning said Lord Magan was in "straitened financial circumstances" and recently obtained a loan from a fellow peer, Lord Ashcroft, to stave off a bankruptcy application in London. He said Lord Magan agreed in 2016 Castletown Cox should be sold if no alternative could be found but resiled from that and various proceedings followed.
Ultimately, following proceedings in the Royal Court of Jersey, that court ruled Castletown Cox should be sold.
If summary judgment was granted over the unpaid rent, Lord Magan cannot then maintain his claim for a new tenancy because the court would be dealing a “knockout blow and all other claims are stripped away which are sandcastles in the air”, counsel said
Maurice Collins SC, also for Lord Magan, argued the claim for judgment should be sent to full plenary hearing to prevent an injustice in circumstances where his client is counter-claiming for wrongful exclusion from the property.
Mr Justice Robert Haughton has reserved his decision.