PROPERTY DEVELOPER Paddy Kelly and two other businessmen are resisting a bid to enforce here a $5.77 million (€4.13 million) judgment granted against them by a Florida court. They argue the judgment was secured on foot of a settlement which may breach US tax law.
Bussoleno Ltd, described as a British Virgin Islands company, has brought proceedings in the Commercial Court to enforce the Florida court’s judgment but Mr Justice Peter Kelly was told yesterday the defendants intend to bring proceedings in the US to set aside both that judgment and an underlying mediated settlement.
The proceedings for summary judgment orders are against Mr Kelly, Clonmore, Shrewsbury Road, Dublin; John McCabe, The Rath stud farm, Ashbourne, Co Meath; and John Walsh, Tinnahinch, Plunkett Avenue, Westminster Road, Foxrock, Dublin.
Brian Cregan SC, for Mr Kelly and Mr McCabe, said his clients would claim the mediated settlement arose from misrepresentations and inducements by Rene Gareau, who was a party to the mediation and also had an interest in Bussoleno. The claim was the mediated agreement and payments made under that agreement may constitute an offence under US tax law. Ciarán Lewis, for Mr Walsh, said his client was advancing similar arguments.
In light of those and other matters, including problems with Bussoleno’s legal documents, the judge adjourned the proceedings to July 24th. He said he would transfer the proceedings to the Commercial Court but was adjourning them to allow the defendants set out their defence on affidavit and to allow Bussoleno put its legal documents in order. The affidavit filed on behalf of Bussoleno was a “sloppy” piece of work, he remarked.
The judge noted among the matters to be addressed was the proper home of the company as addresses had been given in the British Virgin Islands and Ireland. An affidavit of a director of Bussoleno appeared to have been sworn in Liechtenstein, Mr Cregan had earlier said. Bussoleno claims there is no defence to its application to enforce the Florida court’s judgment of April 24th last which, it claims, was obtained on foot of a mediated settlement which was executed and not honoured.
The company claims the Florida court ordered it should recover $5.75 million plus interest at 8 per cent per annum against the three defendants jointly and severally. It claims that judgment enforced a mediated settlement in proceedings involving Bussoleno against Irish American Management Services LP (IAMS) and Irish American Management Services I LP (IAMSI) – both limited partnerships with offices in Sarasota, Florida – and the defendants.
It is claimed Bussoleno’s solicitors wrote on May 13th last to the defendants calling on them to pay the sum due, failing which proceedings would be issued.
Bussoleno claims the Florida court proceedings were brought under a complaint filed on January 28th, 2008 and sought to enforce Bussoleno’s rights under five promissory notes – four from IAMSI and one from IAMS. All the promissory notes were guaranteed by the defendants, it is claimed.
In their defence to the Florida proceedings, the defendants made a third-party complaint against Mr Gareau which was answered by Mr Gareau, it is also claimed. A mediation conference was held and a mediated agreement was duly signed by the defendants, it is alleged. It is claimed payments of $225,000 were made but the defendants failed to pay $112,500 that was due on March 14th.
