Daughter and solicitor ordered to pay damages to mother over fraudulent transfer of home

The High Court has ordered the removal of a mortgage charge held by a financial fund over the home of an elderly widow who was defrauded by one of her daughters.

As well as ordering the removal of the charge over Marie Gibson’s home, Mr Justice Brian Cregan also ruled that her daughter Pauline Gibson should pay her mother €75,000 in exemplary damages for engaging in an “unscrupulous fraud” on her parents, Dublin City Council and the lender of money.

The judge further ruled that Kevin O’Gorman, the solicitor who had advised the parties regarding a loan agreement relating to the plaintiff’s home, should pay Máire Gibson €5,000 compensatory damages, plus a further €30,000 aggravated damages.

The court had previously found the solicitor to have been negligent in the performance of his duties towards Mrs Gibson.

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The judge said he was considering referring the findings he has made in his judgments in respect of Pauline Gibson to the Director of Public Prosecutions, and to the Law Society and the Revenue Commissioners in respect of findings made against Mr O’Gorman.

However, he said he would consider further submissions before making a final decision on those referrals when the matter returns before the court in two weeks’ time.

The judge made the findings in proceedings brought by Marie Gibson against Pauline Gibson, Mr O’Gorman, Promontoria Oyster DAC which held the charge, and a receiver it appointed over the plaintiff’s home at Castletymon Green, Coolock, Dublin 5.

Last year, Mr Justice Cregan set aside a purported transfer of the property between Marie and her late husband John Gibson to Pauline, which occurred in 2003 but was not discovered until 2017 shortly after John’s death, on the grounds that it was fraudulent.

The court also found that Mr O’Gorman had been negligent in the performance of his duties towards Marie Gibson in 2003.

Representing Marie Gibson, Hugh O’Flaherty, instructed by Gaffney Halligan solicitors, argued that in light of the initial judgment the plaintiff was entitled to orders removing a mortgage charge registered in the name of Promontoria over the property from the Property Registration Authority, and the removal of the receiver.

Mr Justice Cregan agreed that the transfer of the property and the charge were void and were set aside, and made damages awards in favour of the plaintiff.

He also added the consent of Dublin City Council to vest the fee simple in the property to Marie Gibson and her late husband, which the judge said had been obtained by fraud and forgery, were all void and set aside by the court. In light of his findings the Property Registration Authority should take steps to correct its register, the judge added.

The judge also found that the receiver had not been validly appointed.

The judge also said this was a case where damages awards should be made. Pauline Gibson, the judge said, had engaged in a scheme in place in 2003 to defraud her parents out of their family home and the court was marking that with an award of punitive or exemplary damages in the sum of €75,000 in favour of her mother.

Mr O’Gorman, the judge said, had behaved in “a grossly negligent manner” towards Marie Gibson and her late husband. The solicitor was “clearly aware” of all his own actions including that he had failed to furnish any written advice to Marie Gibson, the judge said.

Mr O’Gorman also knew that Marie Gibson had never obtained any funds from the transaction, had destroyed original documents of transfers in 2003 and had falsely redated transfer documents and the conveyance in 2009, to ensure he did not have to pay interest and penalties on stamp duty.

Mr O’Gorman had not witnessed Mrs Gibson’s signatures on documents relating to the purported transfer but had later claimed that he had witnessed the signatures.

Despite all this, the judge said, Mr O’Gorman had sought to defend the case against him “tooth and nail” until the third day of the trial when it became clear that “the solicitor’s actions in this matter were indefensible”, the judge said.

The judge said an award of aggravated damages against Mr O’Gorman was “justified” in this case, he accepted arguments that the solicitor was not currently “a man of means,” and assessed damages in the sum of €30,000 aggravated damages plus €5,000 in compensatory damages to Mrs Gibson.

The court said it was not necessary to make an award of damages against Mr O’Gorman in favour of Promontoria, which he said had indicated to the court that it would pursue the solicitor on foot of an undertaking to compensate it for its loss.

Promontoria, which claims that it is owed some €350,000 on the mortgage, had opposed the application to remove the charge from the Property Registration Authority. It claimed that this was a case of undue influence rather than fraud.

The judge rejected that argument.

Mr O’Gorman remained neutral on that issue. Pauline Gibson did not participate in the proceedings.