Statement by Dr James Reilly

I would like to thank the Ceann Comhairle for giving me the opportunity to make a personal explanation, arising from questions raised in the House yesterday, which will outline the circumstances by which my name came to appear in Stubbs Gazette. I believe this explanation will show fellow deputies that I have at all times acted with complete propriety and that the problem stems from complicated litigation surrounding an investment made 12 years ago.

In November 2000, I entered into a Co-Ownership Agreement for the purchase and development of lands at Green Hills, Carrick-in-Suir, Co. Tipperary for use as a nursing home. I was one of 13 co-owners who bought the lands for the purpose of building a nursing home and then leasing the home to a nursing home operator. I hold just over a 9% share in the Co-Ownership.

The Co-Ownership Agreement provided for two categories of co-owner, namely Recourse Co-Owners (of whom I am one of five) and Non-Recourse Co-Owners, of whom there are eight. Under the terms of the Co-Ownership Agreement, the eight Non-Recourse Co-Owners were entitled to be bought out in June 2011.

The construction of the nursing home was completed by July 2001. In that month Dr. Dilip Jondhale and Dr. Vasudha Jondhale signed a lease for the premises to operate a nursing home business. Dr. Jondhale and his wife are the owners of the Greenhill Nursing Home business and not the Co-Ownership. It is important to clarify however that Dr. Dilip Jondhale was also one of the original five Recourse Co-Owners.

Now I have already told deputies that the current difficulties stem from complex litigation and I feel it is important to give the house information in that regard.

In May 2004 Dr. Vasudha Jondhale wrote to the Co-Owners indicating that the nursing home was not fully completed and the tenants were unhappy to pay further rent. This was responded to by correspondence confirming the building was complete and calling on the tenants to pay rent as it fell due along with all arrears.

Solicitors’ correspondence ensued and ultimately proceedings were issued for the recovery of rental arrears from the nursing home business. Those proceedings were taken in 2009 in the High Court against Dr. Dilip Jondhale and Vasudha Jondhale (High Court Record No. 2009/1012S).

Then in January of last year – before the last General Election - I sought to dispose of my interest in accordance with the terms of the Co-Ownership Agreement by offering my interest to the other Co-Owners. However a buyer could not be found at that stage.

Subsequently, following my appointment to the Government in March 2011, I granted a Power of Attorney to my Solicitor for the purposes of doing all acts necessary to dispose of my interest in the Co-Ownership. On the 4th of April 2011, a second Transfer Notice was served by my solicitor as my Attorney seeking again to dispose of my interest at a reduced price. Once again this was not taken up by any of the Co-Owners.

As you already know, the Non-Recourse Co-Owners were due to be bought out in June 2011 however a further dispute arose in relation to the Terms of a new lease to be granted to the Nursing Home Operators and it was not possible to resolve matters at that stage. Accordingly the Non-Recourse Co-Owners instituted proceedings against the Recourse Co-Owners in the Commercial Court in July 2011.

In October 2011, my attorney having failed to dispose of my interest despite several attempts to do so, and in circumstances where it had not been possible to resolve matters with the nursing home operators, I sought the advice of the Standards in Public Office Commission under Section 10(12) of the Standards in Public Office Act 2001.

Discussions with the Standards in Public Office Commission initially centred on the creation of a “Blind Trust” to set aside my interest for such period as I remained a Minister. The establishment of such a Blind Trust would have involved the transfer of my interest to a Trustee and in those circumstances required Bank consent. Bank consent was sought. However, the Bank felt it would be inappropriate to grant consent to such a transfer in circumstances where litigation was in being in the Commercial Courts.

Subsequently the Standards in Public Office Commission advised that it would be acceptable to proceed by way of a Power of Attorney provided the Power of Attorney gave the Attorney complete and unfettered discretion to deal with my interest in the nursing home as he or she deemed fit and provided that person satisfied the conditions of the Public Ethics legislation.

This advice was received early in January 2012 and on the 12th of January 2012 a Power of Attorney was granted to a 3rd party solicitor in compliance with the Ethics in Public Office Acts 1995 and 2001 and in accordance with the Standards in Public Office Commission advice. The 3rd party solicitor is a different solicitor to the one originally given power of attorney to dispose of my interest in the property.

I hope it is clear to deputies that I sought at all times to comply fully with my obligation under the Standards in Public Office Act and Code of Conduct for Office Holders.

Then in November 2011, the failure to agree new terms of a lease with the Nursing Home Operator after the expiry of the initial term resulted in proceedings being issued in the Circuit Court against the Nursing Home Operator, seeking to fix the terms of a new Lease to be granted after the expiry of the initial ten year term. The proceedings in the Circuit Court impacted upon the recourse parties’ ability to secure funding to acquire the interest of the Non-Recourse Co-Owners.

In the Commercial Court the Recourse Co-Owners agreed to the judgment in February of this year and a stay on the execution of the Judgment was granted until the 30th of April. It had been hoped to resolve all litigation, including the Circuit Court action, prior to the 30th of April to enable the recourse parties to proceed to raise the required funds. In this context the matter was to be dealt with by the attorney appointed by me together with the other parties. However, it was not possible to meet this deadline due to Court adjournments.

I can advise the house however, the Circuit Court proceedings have been settled and a new Lease is being finalised. I am assured by my Attorney that very significant efforts are underway to agree a methodology by which the Non-Recourse Co-Owners can be paid.

As previously indicated my interest in the total Co-Ownership of the property is just over 9% (This is equivalent to 25% of the Recourse Co-Owners Interest). My Attorney cannot compel parties to reach a resolution in circumstances where my interest is a minority interest but as I have said I am assured by my Attorney that every effort is being made to resolve matters.

In accepting the Judgment, it is clear that it is the intention of the Recourse Co-Owners to meet our financial obligations and those will be met. The means of dealing with the Judgment has been impacted by other court proceedings, one of which is now resolved and the second was the subject of a Judgment in favour of the Co-Owners by the High Court which although under appeal is not anticipated to impact upon a resolution as it relates to historic rent arrears.

In the circumstances, my Attorney believes that it will be possible to reach a resolution of the issues.

I do very much regret that it has not proved possible to reach agreement in advance of being named in Stubbs Gazette.

I'd like to turn my attention to one or two other issues here tonight as well if I may. There has been a suggestion that I might have a conflict of interest because of my share in a property that houses a private nursing home. I like to state very clearly on the record of the house that nothing could be further from the truth. I say so for three reasons.

One/ I am not the operator of the Greenhill Nursing Home. I never have been. That business is run independently.

Two/ I have been attempting to divest myself of my interest in the property for 16 months.

and Three/ my single interest here is the well being of our older persons.

I have repeatedly stated that I believe too many of our older people are being placed in Long Term Care and should instead be in their own homes.

Health journalists and others know this already - but I will shortly be announcing a major new initiative aimed at empowering older persons to stay in their own homes rather than go into Long Term Care at all.

I have already revealed that €28 million euro will be invested in a range of measures - including new pathways through our hospitals - with the intention of giving the greatest possible assistance to older persons to stay in their homes, which the vast majority of people want to do.

I do not have a conflict of interest. I have a single interest and that is the best interests of older persons and patients under our health services.

May I also remind deputies that on being appointed as Minister for Health I received a Special Leave of Absence from my General Practitioner Practice and I have no hand act or part in the day to day running of the practice.

Also for completeness can I advise the house that in advance of being appointed to Government I had intended to develop a primary care centre with partners in Nevinstown in Swords.

That project is not being proceeded with and the property is for sale.

May I finally say to my colleagues in this house - I entered politics late in life. I did so in pursuit of no business interest whatsoever.

I did so because I passionately believe that we can provide better services to our citizens. I passionately believe that we must put the patient at the heart of what we do in the health services. It may sound to some like a slogan but to me it's not. It's the driving force behind the changes that I'm putting in place in health services.

Thank you very much Ceann Comhairle