The High Court has ordered four adult children of bankrupts Brian O’Donnell and Mary Patricia O’Donnell to be examined on oath and produce documents concerning disputed chattels from Gorse Hill, Killiney.
In a judgment delivered on 6 October 2015, Ms Justice Costello said the Official Assignee had properly sought information as part of gathering in the bankrupts’ assets. The court granted the Official Assignee’s application under section 21 of the Bankruptcy Act 1988, requiring the children to answer questions about their dealings and affairs concerning the contents of Gorse Hill and to produce relevant documents or papers at least 14 days before the examination.
The court said the children claimed title to some or all of the contents and other chattels bought by their parents, but had not adequately explained why the items did not belong to the bankruptcy estates. The Official Assignee’s position was that items either formed part of the estates or were covered by a 2012 settlement agreement. The children and their parents disputed that position, including by claiming that valuable items had been gifted to the children.
The judgment records that the children had agreed in 2012 to maintain certain Gorse Hill contents and, if unsuccessful in separate proceedings, renounce claims to them in favour of the trustee in bankruptcy or Official Assignee. They failed to obtain relief in those proceedings, which concluded in the Supreme Court in December 2014. The judgment also notes that the parents and children challenged the settlement’s validity and scope.
The court refused the family’s request to return seized chattels, finding it appropriate for the Official Assignee to retain them while ownership was clarified. It said items found not to form part of either bankruptcy estate would be returned to the people from whom they were removed. The judgment did not finally determine ownership of the disputed items.
The court also refused the children’s discovery applications, explaining that a section 21 examination is an inquisitorial information-gathering process, not litigation between the children and the Official Assignee. It refused their request to cross-examine a deponent, and declined to rescind the search warrant because it had already been executed; an appeal concerning the original order remained pending.
The family’s damages request was refused in the bankruptcy motion, without prejudice to pursuing it by more appropriate means. The court also rejected requests to remove an inspector from management of the bankruptcies. Costs and directions were left for further submissions.