A family dispute could collapse the sale of one of the State’s few surviving great houses, Castletown Cox in Co Kilkenny, the Commercial Court has heard.

Lord George Magan, the owner of the house before it was put into a trust for his children, is being sued by the Castletown Foundation Ltd which has signed a contract to sell the mansion on 513 acres in south Kilkenny.

The foundation is a British Virgin Islands registered company which is managed by the trustee, DW Trustees Ltd. DW has been the trustee of Eaglehill Trust for certain defined beneficiaries since April 2013.

The drawing room at Castletown Cox in Co Kilkenny.

In its action, the foundation seeks declarations including that a tenancy entered into between it and Lord Magan in relation to the property in 2010 has been validly terminated because of his failure to pay rent due. It seeks judgment of some €571,000 in rent arrears.

It also seeks a declaration that Lord Magan, of Cambridge Place, Kensington, London, is not entitled to seek a new tenancy under the Landlord and Tenant Act, on grounds that it constitutes an abuse of process.

It further seeks an injunction restraining him, his servants or agents, from entering the property without the foundation’s consent or from interfering with its right to deal with objects and chattels at or in the property.

Mr Justice Robert Haughton on Monday admitted the case to the fast-track commercial list.

Earlier, Rossa Fanning SC, for the foundation, said the contract for sale of the house for more than €19 million is due to close next month and there was concern the sale may be lost unless the case is dealt with speedily. The trust has been in considerable difficulty for some time, counsel said.

Litigation

There had already been litigation in Jersey, where the family trust is registered and where the courts there approved the sale. While the case had a family background, it was a commercial matter and there are some £14.5 million in borrowings secured on the property, he said. It was not a family home but a “secondary residence” as Lord Magan resides in Kensington.

Hugh O’Neill SC, for Lord Magan, opposed admission to the commercial list, saying it was not a dispute of a commercial nature. While it was argued it was a secondary residence, it was still a private residence, he said.

The entrance hall at Castletown Cox in Co Kilkenny.

In an affidavit seeking admission of the case to the list, Tom Casey, a partner in A&L Goodbody Solicitors, said in 2016 the family trust reached an agreement with the beneficiaries to sell the house to raise income for the trust and discharge its considerable debt.

However, Lord Magan belatedly indicated his intention to seek a new tenancy which is misconceived in law and bound to fail, Mr Casey said.

This move is the latest in “a long line of actions deliberately calculated by the defendant to frustrate the sale of Castletown Cox”.

It is likely to cause the collapse of the sale, he said. That would mean the £14.5 million owed to the bank, Sancus Jersy, will not be repaid and would also likely result in a fire sale of Castletown Cox to the detriment of all parties involved, he said.

Admitting the case to the commercial list, Mr Justice Haughton said the court had an over-arching jurisdiction in relation to the definition of commercial proceedings. There were commercial loans for some £14.5 million and there was some urgency to the matter. The case comes back to court in October when a date for trial will be set.