The High Court has rejected claims by four children of Brian and Mary Patricia O’Donnell concerning Gorse Hill, a property on Vico Road in Killiney, and securities granted by Vico Limited to Bank of Ireland.
In a judgment delivered on 31 July 2013, Mr Justice Brian J. McGovern found that Vico Limited held full legal and beneficial ownership of the property. The plaintiffs were beneficiaries of the Avoca Settlement and held a beneficial interest in shares in Vico Limited, but had no beneficial interest in Gorse Hill itself.
The plaintiffs had argued that the securities were executed in breach of trust and beyond Vico Limited’s powers, and sought declarations that they were invalid or orders setting them aside. They also claimed the banks knew, or should have known, of breaches of trust or duty. The judgment records that the plaintiffs did not argue that Vico Limited’s corporate structure was a sham.
The court relied on title records, company and trust accounts, legal documents and correspondence. It found that Vico Limited acquired the beneficial interest through transactions in 1998 and 2000, and received full legal and beneficial title under transfers in 2006. The trust held shares in the company rather than an interest in the property.
The judge found no basis to conclude that the first and second defendants knew, actually or constructively, of any breach of trust or irregularity by Vico Limited’s directors or the trustees. The bank had obtained Manx legal advice on the company’s capacity and execution of the security documents. The court also found no evidence that the directors lacked an honest belief that the transactions were in the company’s interests. It said any claim concerning alleged loss to the value of the plaintiffs’ shareholding should be brought by the company, and any claim about the trustees’ conduct should be brought against the trustees. The judge expressed no view on whether such a claim against the trustees existed.
The plaintiffs also sought to have statutory declarations they signed in March 2011 declared void or rescinded, alleging undue influence by their parents. The declarations stated that Vico Limited held title to Gorse Hill and that the plaintiffs had no interest in the property apart from their beneficial interest in the company’s shares. As the judge found those declarations reflected the existing legal position and did not change it, he considered it unnecessary to address that claim further.
The court concluded that the plaintiffs were not entitled to the relief sought, or any relief. The judge said he would hear the parties on costs; the judgment does not record a costs order.