Companies agree fund for repair of damaged homes

ONE OF the most expensive legal battles in the history of the State is likely to end soon after the two companies involved agreed a settlement yesterday.

Menolly Homes and the Lagan group of companies, which disputes responsibility for defects in hundreds of north Dublin houses, have agreed to set up a trust fund to repair the homes.

Menolly, which built the houses, and the Lagan Group, which supplied infill used in their construction, agreed to establish the fund to remedy cracks and swelling in the houses and to compensate owners for the inconvenience involved, the Commercial Court heard yesterday.

The settlement was brokered at 1am yesterday by a mediator – former Bar Council chairman Turlough O’Donnell.

No admission of liability was made by either company, which up to now have blamed each other for the problems that have arisen in houses in the Drynam Hall, Myrtle and Beaupark estates.

The development heralds the end of a long-running court battle between the two parties. Yesterday marked the 150th day of hearing in the case.

Mr Justice Paul Gilligan welcomed the agreement reached by the parties and noted the case was “one of the longest running and probably the most expensive, from the point of view of litigation costs, in the history of the State”.

The deal was also welcomed by lawyers for the homeowners in the Drynam Hall, Myrtle and Beaupark estates, whose own legal cases have been delayed by the action. Lawyers for the homeowners will now enter into talks with the companies, with the help of the mediator, to see whether the proposed trust fund forms the basis of an acceptable settlement.

Mr Justice Gilligan warned that if litigation was restarted, it was unlikely to end before mid-2012.

He said he was always acutely conscious of the plight of homeowners “caught in the middle” of a substantial commercial litigation.

“It is clearly in all parties’ best interests that the monies being expended on the litigation before the court be utilised towards the remediation of the affected homeowners’ houses,” he said.

The settlement would bring certainty and assurance to all parties, including the homeowners, against the background of difficult economic circumstances.

In the case, Menolly claimed that stone infill material from one of the Lagan companies contained excessive amounts of the mineral pyrite, which swells when it comes in contact with water. The Lagan Group blamed the problems on defects in construction.

The case, which began in February 2009, has been marked by long periods of technical evidence punctuated by legal argument.

Brian O’Moore, for Menolly Homes, told the court yesterday the case would probably run for another 18 months without the agreed settlement. He blamed the “enormous explosion” in the predicted length of the case on the complexity of the issues involved and reputational concerns for the companies involved.

Mr O’Moore said the two sides had reached agreement yesterday morning on a trust fund, following a mediation process overseen by Mr O’Donnell.

This provided homeowners with a choice, but also demanded a significant commitment from them to make the process work, he said. Mr O’Moore asked the court for six weeks to see whether final agreement could be reach and the proceeding disposed of.

His application was supported by Hugh O’Neill, for the Lagan Group, and by lawyers representing a number of groups of homeowners.

Mr Justice Gilligan adjourned proceedings until December 21st to allow for a settlement to be reached.