Two-week property wrangle ends in minutes

Analysis: Simple deal concludes lengthy and complex battle over Whitewater, writes Una McCaffrey.

It took just a matter of minutes, in the end, for Sean Dunne and Kevin Warren to settle their legal differences over the Whitewater shopping centre in Co Kildare.

After almost two weeks of argument in the Commercial Court, the deal will see property developer Dunne selling his 50 per cent share in the shopping centre.

Warren, an investment specialist, will pay a basic price of €197 million, with this to rise to €220 million if certain rental targets are met. It is a fairly simple deal in its structure, which belies the intensity of both parties' positions as they proceeded through the case, which is now closed.

On one side, Dunne was asking the court to declare that there was no valid contract to sell his share of Whitewater. Warren, for his part, was seeking specific performance of the sale contract he believed to exist.

This contract was for the sale of the Whitewater site for €37.5 million. Dunne said this was nonsense, that the site and all the buildings on it were worth at least €200 million. It was, until yesterday at 10am, up to Ms Justice Mary Finlay Geoghegan to decide who was right or wrong.

In the wake of the settlement, it is hard to brand either party the loser. Warren will get his shopping centre and Dunne will get a ball of cash in return. It was just a pity that they had to come to this through the prism of the High Court and all the expense it involved. Both will absorb their own costs.

Dunne said yesterday that he had "mixed emotions" at letting the asset go, but he said he was content with the outcome.

Like Warren, Dunne will be aware that if the case just finished had proceeded to a conclusion, it would have been unlikely to have marked the end of the affair.

If Dunne had lost, he would have almost certainly pursued Warren for the value of the buildings now on the site - in other words, the development.

If the case had gone the other way, Warren would probably have appealed, with either option tying both men up in courts and costs for some time to come.

As it happened, the High Court never got to hear Warren give evidence, or commence his case at all. We didn't get to see the defendant's demeanour in the stand, nor hear in his words how the deal was concluded and how it was valid in his eyes.

This left the case with a lop-sided feel, dominated by the evidence of Dunne and the witnesses called by his side.

The developer's central case was that there could be no sale of the asset unless there was both a site contract and a development agreement. The €37.5 million put forward by Warren as the overall purchase price was, according to Dunne, just the consideration for the site and only a part of an overall deal.

The development agreement, which was never signed off, was to carry with it a substantial additional price, he said.

Warren's position was to argue that the site contract was valid and that this meant he owned everything on the site too. He nonetheless would have expected to pay more than €37.5 million for this if he had won. This is reflected in the value of the settlement deal.

As is normal in complicated cases of this type, much time was spent on details that take on greater importance in hindsight.

We had the interim put and call option, which was designed to allow both parties to walk away from the deal. Dunne argued that it had been extended beyond its deadline, thus allowing him to exit. Warren, on the other hand, contended that it had expired and, in doing so, had created a valid contract. The court never got around to deciding who was right.

There was also the matter of a deposit, with Dunne arguing that Warren had paid neither a nominal deposit of €100 nor a more chunky "value" deposit on time to secure a deal. Warren said a €100 cheque dispatched by him at the end of August (just as the option was expiring if it had not been extended) had done the business. Again, no conclusion on this was reached.

There was also much talk of a meeting scheduled between the two parties on August 30th. Dunne did not attend, much to the chagrin of Warren. Dermot Gleeson SC, on behalf of Warren, made much of the absence, but Dunne said it was simply to do with other commitments, mainly the Jurys Doyle transactions.

It is true to say that Jurys was the ghost behind the purported transaction from start to finish, with Dunne's multimillion exposure to the company through site and share purchases prompting his decision to sell Whitewater in the first place. It must also be recognised, however, that he passed through the various deals and moved on without getting any money from Whitewater. He has since engaged to spend about €200 million on part of AIB' s site in Dublin's Ballsbridge, so has plenty to chew over for a while.

As for Warren, he will take ownership of the stake in Whitewater at the end of next month.

The deal will bring his company's assets under management to €2 billion and will provide a flagship asset for the small number of investors who have been waiting patiently for it since last year.

Luckily for them, they haven't needed to pass through the rigours of the High Court to get their hands on it.