The High Court has set aside three property transfers to a daughter after finding they were fraudulent conveyances made at a gross undervalue to evade the consequences of judgments against her parents.
In a judgment delivered on 3 December 2024, Mr Justice Cregan ruled in a plenary action brought by AIB Mortgage Bank UC and AIB plc. He said the transfers prejudiced the banks as creditors of the first and second defendants, whose judgments remained unsatisfied. The second defendant had died during the proceedings.
The court heard that the first and second defendants had borrowed substantial sums and defaulted. In July 2015, judgments by consent were obtained for approximately €9.5 million against the first defendant and €8.9 million against the second. The bank later discovered three transfers to their daughter: land recorded as transferred in May 2018; a family home transferred in April 2019; and land transferred in February 2020.
The banks’ witness evidence described the first property as sold for €50,000 when its value at the time was €465,000. The family home was transferred for €60,000; the property expert valued it at €560,000 at the time. The third property was transferred for €5,000, which the expert said was a gross undervalue. The family home transfer also left both parents with a right to reside there for life.
The court heard that the first and third defendants had failed to comply with discovery and particulars orders, and their defences had been struck out. They did not appear at the hearing. The first defendant had sought adjournments on medical grounds, supported by certificates over several months. Justice Cregan said he had not provided a certificate explaining his absence on the day, and found a pattern of non-engagement and disregard of court orders. The third defendant had not applied for an adjournments.
The fourth defendant, John Shiels, was said to have been involved in intermediary transfers. The judge noted that the banks had been unable to locate him and that it was not known whether he existed. The banks were not seeking orders against him at this hearing.
Applying section 74(3) of the Land and Conveyancing Law Reform Act 2009, the judge considered the debts, timing of the transfers, family relationship, substantial undervaluation, retained right of residence, inability to locate Shiels and lack of an adequate explanation. He concluded that the necessary and probable consequences of the transactions were to defraud the banks. The court ordered the three transfers to the daughter set aside on grounds of fraud; the judgment did not make an order against Shiels.