Law firm Thomas Montgomery & Sons operated out of a nondescript office on Upper George’s Street in Dún Laoghaire, where one of the services it provided was the loaning out of money from a client’s pension scheme to borrowers, who paid interest on the loans to the benefit of the client’s pension.
The client was the sole beneficiary of the self-administered pension scheme, but now some of his pension money has allegedly gone missing, and the client finds himself unable to retire, according to documents in a recent High Court application.
The late David Montgomery, of Thomas Montgomery & Sons, who drowned in the harbour at Dún Laoghaire, a short walk from his law offices, in October 2022, was involved in the operation of the loan scheme.
From his practice, he supplied the service to businessman Connie Kelleher, a former finance manager of Dún Laoghaire-based State agency Bord Iascaigh Mhara who has an address at Hainault Road, Foxrock, Dublin 18. Mr Kelleher’s investment scheme had its money in an associated trust, called the Woodfield Pension Trust (WPT), which forwarded the money to the solicitor’s firm so it could be loaned out at interest.
At the time of Mr Montgomery’s death, his practice was being investigated by the Law Society. The High Court last year heard an estimated deficit of more than €1.7 million was uncovered during the Law Society’s investigation of the firm run by Mr Montgomery and his father, William Montgomery. David Montgomery, a practising solicitor since 1995, was managing partner at the firm from 2005 until he died.
In an application this month in the High Court, Mr Kelleher, WPT, and the trustee to the trust, Peter Griffin, of Sandyford Business Centre, Dublin 18, claimed there was a shortfall of €618,834 in the client account of Mr Montgomery’s practice regarding the trust.
As part of the application, the court was given a report by accountant Thomas Murray of Friel Stafford who examined the legal firm’s dealings on behalf of WTP, using material provided by the Law Society.
The law firm, he said, was engaged to handle six loans, but there appeared to be transactions on the client accounts that were not linked to the pension fund’s dealings or associated fees.
Five of the six loans itemised in the report occurred in 2020 and 2021, and the total amount lodged to the accounts was more than €3.5 million.
One undated loan was for €910,000 and was repaid with interest of €198,083, with the €1.1 million due to the fund discharged by the law firm in November 2020.
A December 2020 loan was for €550,000 and resulted in 15 interest-only monthly payments of €4,583. The loan capital was repaid to the law firm by the borrower in September 2022.
A €600,000 loan involved the money being transferred to the law firm in December 2020, while another involved €224,000 being transferred in the same month.
Another loan involved €400,000 being transferred to the law firm in December 2020. The money was loaned by the trust to an employee of the law firm, Martin Griffin, according to the report.
“WTP, however, possess no documentation relating to this transaction and have not been able to obtain executed loan agreements/or security arrangements from [the law firm],” Mr Murray’s report said.
The trust, the report said, had issued a demand letter to Mr Griffin but the loan has not been repaid.
Payments were made out of the client account that had no relation to the trust or to Mr Kelleher, the report said
“In the absence of properly executed loan documentation and security, the WTP is frustrated from issuing legal proceedings against Mr Griffin and the WTP is looking at a loss of €400,000 plus interest,” the report said.
Payments were made out of the client account that had no relation to the trust or to Mr Kelleher, the report said.
These included a payment of €475,000 to Everyday Finance, a payment of €480,000 to Hayes Solicitors (who also act for The Irish Times) and a payment of €555,000 referenced to a house in Dublin 12, as well as other, smaller payments.
The Everyday payment was in December 2020 and “it is understood this is related to a mortgage to which Mr Montgomery was a party and to which he and his co-borrower was not in a position to discharge”, the report said.
Mr Kelleher, the report said, is of pensionable age but now unable to draw down his pension. The trustees are unwilling to facilitate retirement of the scheme, the report said, given the uncertainty that exists.
The application to the High Court earlier this month was made against Mr Montgomery’s estate, the executor of which is his wife, Ciara McGoldrick.
The documents submitted included a letter dated September 26th from BHSM solicitors, acting on behalf of Ms McGoldrick, to Swine solicitors, who are representing the trust and its beneficiary, in which Mr Montgomery’s estate was described as “complex”.
“We understand that your clients claim that their funds were applied by the deceased to discharge a mortgage due and owing [on] the former office premises of the firm of Thomas Montgomery & Son,” it said.
“We understand that this property has since been sold and the proceeds remitted to the Law Society. In those circumstances, it would appear that your clients claims lie against the Law Society’s Compensation Fund, rather than against the estate.”
The court accepted the application two weeks ago and an order that facilitates the taking of a case against Mr Montgomery’s estate, which has not yet been the subject of a deed of probate.
A further step in the process was taken last week with the lodgement of proceedings by Mr Kelleher and Mr Griffin, the trustee of the WPT, against a solicitor who has been appointed as an administrator ad litem (for the purpose of litigation) of Mr Montgomery’s estate, as a result of the ruling this month.
A date has yet to be set by the court for the new proceedings.
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