The High Court varied an asset-freezing injunction against property investor and county councillor Gerard Killally, allowing specified rental income to service mortgages and setting a €10,000 monthly limit for household expenses until the trial of the action on 30 June 2009. The court did not lift the injunction in full.
The order, made by Mr Justice Kelly on 27 March 2009, followed Killally’s application to discharge or vary an injunction granted on 20 February. It restrained him and co-defendant Richard Connors from disposing of assets so as to reduce their value below €8 million. The plaintiffs had obtained judgment against both defendants for breach of partnership obligations; damages were still to be assessed. The judgment records that Killally admitted making secret profits in two of four partnerships in response to interrogatories.
Killally initially proposed replacing the injunction with undertakings. The judge rejected that approach, citing the effect on financial institutions that were not bound by undertakings and the plaintiffs’ scepticism in light of the secret profits. The plaintiffs also argued that Killally had not met the evidential threshold for varying the order.
The judgment said Killally reported borrowing liabilities of about €10.7 million, a separate €2.6 million judgment in favour of Bank of Ireland and gross annual income of €17,038.64 as a county councillor. He had told the court his auctioneering business was effectively at an end. He sought monthly household spending of €15,767, which the judge considered excessive given his debts.
The variation permits rental income to be used for mortgage payments on specified properties, with any surplus available for household expenses. The judge said the aim was to avoid mortgaged properties being repossessed before trial because repayments were missed. For the wife-owned cottages at Clara Road, Tullamore, two joint bank accounts may be used to service mortgages; any surplus may go towards household costs.
The court also agreed to allow the sale of premises at J.K.L. Street, Edenderry, subject to safeguards. If sold before trial, proceeds must first be paid into court before any payment to Killally or his wife. The judgment says the sale proceeds were intended to provide funds for Killally’s legal expenses and household costs, while preserving his wife’s apparent entitlement to 50%.
Household spending was capped at €10,000 a month until trial. The judge said it could be funded from the councillor income, any rental surplus after mortgage payments, and other available funds. The judgment notes that the injunction had previously been varied for Connors to use two bank accounts and his salary as a national school teacher.