High Court refuses to strike out case against Seán Dunne’s ex-wife over asset transfer

The High Court has for the second time refused to dismiss a 10-year-old Irish case brought against Gayle Killilea by the official assignee of the bankruptcy of her Celtic Tiger-era developer ex-husband, Seán Dunne.
Mr Justice Max Barrett on Friday ruled that her strike-out application “must fail”.
He said the issues in the Irish proceedings have not before been determined and there is no evidence before the court to suggest there has been any abuse of process by the bankruptcy assignee.
The 2014 proceedings concern an alleged fraudulent transfer of assets between the former spouses in a bid to beat Mr Dunne’s creditors. The allegations are strongly denied.
Ms Killilea claimed the issues in the case were or should have been decided already in a separate lawsuit taken in the US. She asked the court to strike out the Irish proceedings on the basis that they are “res judicata”, meaning the matters have already been adjudicated upon, and are an abuse of process.
The official assignee, represented by Edward Farrelly SC, instructed by Clark Hill Solicitors, contested her application over several days last May.
The couple were living in Connecticut when Mr Dunne filed for bankruptcy in 2013 with debts of €700 million. The Carlow-born developer has also been declared bankrupt in Ireland.
They maintain that the asset transfers occurred when Mr Dunne was fully solvent, but a Connecticut jury in 2019 found that he had fraudulently transferred to Ms Killilea assets worth millions of euro, including a mansion on Shrewsbury Road in Dublin 4.
The verdict made her liable to pay €18 million in damages to the US bankruptcy trustee.
A US appeals court dismissed Ms Killilea and Mr Dunne’s separate appeals against the 2019 verdict. The US supreme court has refused to hear further appeals from them.
The Irish case alleges Mr Dunne fraudulently transferred shares in a company called Mavior to her. It also concerns the transfer of the Lagoon Beach Hotel in Cape Town, South Africa, and all other assets transferred to her under a 2008 agreement.
She denies any wrongdoing or ill-motive in relation to the transfers.
In 2018 the High Court rejected Ms Killilea’s first strike-out bid, which was grounded on claims that Ireland was not the appropriate jurisdiction and the action conflicts with US law.
Ruling on her second request for a dismissal, Mr Justice Barrett on Friday said there was nothing in Ms Killilea’s application that would sustain a claim of “res judicata”.
The essence of res judicata is that the matter has previously been adjudicated upon, but Ms Killilea’s application relates to a matter she claims “could or should have been adjudicated upon” in the US but “critically” was not, he said.
He said the fact there are two separate cases in Ireland and the US has been “expressly” held by the Irish and American courts “not to constitute an abuse of process”.
He did not see why the fraudulent transfer of shares claim should have been brought in the US, as Ms Killilea contended, when the shares were Irish and the issues bore “no relation to US law”.