The High Court has extended the bankruptcy of a Co Westmeath businessman to 2025 because of his failure to co-operate with the investigation into his affairs.
The main asset held by Patrick J Daly was his Victorian family home, Ballinagore House, Ballinagore, Co Westmeath, which was purportedly sold by him and his estranged wife, Anne Daly, to a friend in the United States, for €100,000, in July 2012.
At the time the "large family home" had been valued at €550,000 by Sherry Fitzgerald, but the sale has since been declared void by the High Court and the property is now owned by the Official Assignee, Chris Lehane, who looks after the estates of bankrupts.
Mr Lehane continues to be in dispute with Mr Daly over an equestrian centre and land that adjoins Ballinagore House, and an apartment in Aloha Golf, Marbella, Spain.
Mr Daly and Mrs Daly, who were involved in building and property development, were declared bankrupt in November 2015 arising from €4.4 million owed to the Bank of Ireland.
In a judgment on Monday, Ms Justice Caroline Costello outlined how Ballinagore House was sold to a friend of Mr Daly’s, Devon Anne McNeil, who resides in the US. “It was a most unusual sale,” the judge said.
Right to residence
The sale was for €100,000 and gave a right to residence to Mr and Mrs Daly, and their daughter Laura. An initial payment of €5,000 was made, and subsequent annual instalments of €5,937 over 16 years were due.
Because of Mr Daly’s lack of co-operation, the judge said, it was not until April 2017 that Mr Lehane became aware that Mr Daly’s representatives, Tom Casey solicitors, had a file in relation to the house sale.
The judge said a December 2012 payment of €5,000 from Tullamore Credit Union to Tom Casey solicitors appeared to be the first payment on the house.
At its height, the judge said, €35,000 of the €100,000 was paid up to 2017, when Ms McNeil sold her interest in the house to a US company, Irish Ventures Corp, for €120,000.
Mr Daly has said he had made no enquiries in relation to seeking the outstanding money, the judge noted.
He denied that the initial sale “was a stratagem to allow the property to be held by a third party and/or if necessary for it to be transferred to his children so as to prevent creditors having recourse to it”.
The solicitor’s file showed that in July 2012 Mr Casey emailed Ms McNeil and said he understood “you are giving an option to [Mr Daly] and Anne’s children to repurchase the property from you. A form of option agreement in this regard is attached.”
Tax problems
When, that same month, Ms McNeil said that if she developed tax problems, the US tax authorities might consider the Westmeath property “fair game”, Mr Casey replied, saying if anything prejudicial should happen then Mr Daly and Mrs Daly’s children “would need to exercise their option to purchase the property from you”.
In 2013 Mr Casey wrote to O’Sullivan O’Dowd solicitors, for Mrs Daly, saying that Ms McNeil “holds the property on trust for Mr and Mrs Daly (in addition the parties executed an option agreement which provided for your clients’ children to call upon Ms McNeil to reconvey the property to them or at their direction)”.
This correspondence, the judge said, “is inconsistent with the position maintained by the bankrupt”. The house sale was “clearly a sham transaction entered into with a view to defeating creditors”.
The judge cited Mr Daly’s failure to clarify to Mr Lehane that Devon Anne McNeil was the same person as Devon Anne Ralls, who was in a Panamanian property deal with Mr Daly.
Mr Lehane was seeking to establish whether money paid to Mr Daly by Ms McNeil was in fact money recouped from the failed Panamanian investment, and was not for Ballinagore House.
