I apologise in advance for the extreme complexity of the issue I am raising. It is, to say the least, a tangled web. Clonmannon retirement village near Ashford, County Wicklow, was built by Retirement International in 1983. A related company, Retirement Ireland, was established to manage the affairs of the village and provide residents with a range of medical and catering facilities. Initially, the company traded well but after a short time got into financial difficulties. Finally, the Investment Bank of Ireland put in a receiver.
The company was operated by the receiver for a period of almost two years. In November 1988 the company was sold by the receiver for the extraordinary sum of £71,000. That was for 20 unoccupied bungalows, 28 acres of land and 20 bungalows which were occupied by lessees who had 45 year leases and care agreements with the companies.
The company buying the village was Rayhill Properties Limited. A separate care and management company, Home Affairs Limited, took over the management of the estate. When the lease holders in Clonmannon moved into the village they signed two extremely complex documents, a 40 page lease which I read and was stunned that any solicitor would allow a client to sign, and a 20 page care agreement which left me equally mystified. In effect, every aspect of the lives of the people retiring to Clonmannon was governed by these two complex documents.
The residents' well-being depends on the bona fides of the companies which operate those contracts. My grave concern at the capacity and bona fides of the operating companies involved at present in this village prompted me to raise this matter and persuaded me that urgent action is needed from a number of Ministers and statutory agencies. I compliment the Minister of State, Deputy O'Rourke, on coming here today to listen to this complex web of affairs because other Ministers found great difficulty doing so.
The companies which took over the affairs of Clonmannon in 1988 were primarily owned by two families, the Robinsons and the Corneills. Minority shareholders, the Jeffries, were also involved. In the two years following the takeover things operated well but then deteriorated. After two years the dispute between the Corneills and the Robinsons found its way to the courts. This was one of a series of complex court actions that followed.
In April 1992, Mr. Justice Keane, in a judgment which would do Solomon justice, awarded 50 per cent of the shareholding to the Robinsons, 49 per cent to the Corneills and the balance to the other shareholder, the Jeffries. This was appealed to the Supreme Court by Rayhill Limited and by the Corneills and at this stage the Jeffries withdrew from the saga. Following the judgment in November 1992, the directors of Rayhill Limited, both members of the Corneill family, decided to make a rights issue. The decision on the rights issue was made very rapidly and there could not be an extraordinary general meeting of all the shareholders as per Mr. Justice Keane's judgment to make an alternative decision. The Robinsons then got an injunction which stood until December of last year.
In due course the Supreme Court upheld Mr. Justice Keane's judgment on the distribution of the shares in Rayhill Limited. The court did not, however, continue the injunction on the rights issue which then went ahead and completely distorted the share distribution in the company in favour of the Corneill family. Things developed rapidly at this stage. In November of this year and again earlier this month, there were some further legal developments. In November the Corneills indicated they were not pressing further aspects of their Supreme Court appeal. The Robinsons were also in the Supreme Court on an aspect of Mr. Justice Keane's judgment which was decided in their favour.
Meanwhile in Clonmannon things were going from bad to worse and turning distinctly sour. Home Affairs Limited, the company trading as a care company was hiking charges for care by up to 20 per cent. They went from £5,000 to £6,000 per household per year. There were complaints from the leaseholders regarding the quality of care and service received. In October 1992, Home Affairs Limited, the care company, closed with considerable debts, some of which are either in or heading for the courts. The Revenue Commissioners are also numbered amongst the company's debtors.
In a phoenix action a new care company, Hilltop Catering, took over and unlike the previous care company, this was now completely owned by the Corneill family. The squeeze was now put on the residents with vigour. Individual charges for services which had previously been regarded as covered by the care contract were invoiced to all residents. For example, the administration of an injection and the supervision of a bath were both charged at £10. A delivery of support stockings was also charged at £10 and if they were laundered that was charged at £10 and so on. The quality of service also deteriorated. One of the cooks complained, and as recently as last Saturday she said on a local radio programme that she frequently found the larder bare and gave up employment with the company. Other members of the staff of that company are equally concerned.
There was a crisis when one elderly man objected to paying the £10 charge for his injections and pointed out that this was always covered in his care agreement. Management barred the nurse from calling to his bungalow to administer his injections. Under the nursing homes legislation, the nurse could not have left the nursing home in any event so the whole question of the bona fides of the care contract now comes into question. Late one night this 84 year old gentleman left the bungalow in which he was living and tried to cross to the main house. He collapsed on the estate of the house and was taken away and hospitalised. This finally galvanised the residents.
One would have thought there should have been some compromise from the management but far from it. At the same time as this incident they indicated they were unilaterally increasing service charges by a further 3 per cent. The people were now at breaking point and deeply concerned about their future, their well-being and their health. They put forward a 16 point list of actions which they required Hilltop Limited to examine. The company ignored that and instead went ahead and billed all residents for the new charges from 1 September last. In September and October, the people paid their bills at the previous rate. The residents were advised, however, that there was a further legal complexity and since November they have been withholding all their care charges.
Things developed into open warfare at this stage. Catering services to all residents were withdrawn and no more food was provided. Water to some houses was cut off. There was a pantomime which would have been funny if it had not been so serious when a 69 year old gentleman travelled to Wicklow town, bought a water key, came back and late at night turned on the water to the 18 houses that had been cut off. He also, to make a point, went to Mr. Corneill, the manager's house and cut the water off there. Mr. Corneill of course had his water reconnected the following day. I realise I should not mention the names of people who are not present, the management personnel involved had their water put on the next day and prevented any further action against them by parking a monogrammed Rolls Royce over the water key.
Telephone connections were also cut off. The youngest of the residents in these houses is 69, the oldest is in their nineties. They all have medical care problems. The telephone connection which goes through the main house, the nursing home, has been cut off. The emergency bells which are part of the design of every bungalow and are in every bathroom were cut off. In addition the management indicated they would close the nursing home and advised some of the very elderly residents, including one man who recently collapsed and is receiving emergency hospital treatment, that he must remove his wife by 31 December.
In an act of incredible mean spiritedness, management instructed that the light bulbs from all the public lighting on Clonmannon estate be removed. Those latter issues do not come within the ministerial remit of Deputy O'Rourke but I mention them to indicate something of the extraordinary state of affairs that exists there. As the care charge dispute was developing, residents also got details of a transfer of property from Rayhill Limited, the property company to Hilltop Limited, the catering company. Residents were rightly concerned because this seemed to undermine the asset base of Rayhill Limited, the company with whom they had leases and with whom they had signed all their original agreements. It seemed that this action was turning the retirement village into a standard housing estate under the management charge of a company. The valuations on these transfers, when examined by the residents, were incredibly low. The residents, on legal advice, challenged these valuations and earlier this year the Valuation Office instructed that the valuation should be increased. This supports my contention that this company is engaged in plain asset stripping.
The financial stability of Hilltop has now been called into question. It was found that no RSI payments had been made in respect of a staff member who went into hospital recently. I understand that the Revenue Commissioners and the Department of Social Welfare are now taking a close interest in this company. The issues have now reached the stage where we should send in an examiner, inspector or a designated official to examine the complex of affairs.
I compliment the Minister for coming here. My apologies once again for such an extraordinary saga, but as the Minister can see, I have only touched the surface.
