Company sued over pyrite in building product

Construction firm alleges deceit by Irish Asphalt over quality of infill material

A building company has sued Irish Asphalt Limited for loss and damage for alleged deceit over putting on the market an infill product. Photograph: Frank Miller/The Irish Times

A building company has sued Irish Asphalt Limited for loss and damage for alleged deceit over putting on the market an infill product. Photograph: Frank Miller/The Irish Times

Mon, Mar 24, 2014, 16:40

A building company has sued Irish Asphalt Limited for loss and damage for alleged deceit over putting on the market an infill product when it allegedly knew it was “not fit for purpose” and contained excessive amounts of reactive pyrite.

James Elliott Construction Ltd (JEC) says, arising from its use of the infill product supplied by IAL, legal action have been brought against it by St Canice’s Boys National School and Forest Tosara Ltd.

It is also concerned about potential claims relating to some 14 other building projects including Mulhuddart Enterprise Centre, Power City at Coolmine, Santry Student Accommodation and projects including at Blanchardstown, Donabate and Park West.

It claims IAL misrepresented the quality of the product sold by it and either knew, or was reckless, as to whether its representation of the product was true or false.

JEC is also suing Lagan Holdings Ltd, with registered offices at Clarendon Dock, Belfast, and three of its directors - Kevin Lagan, Hampton Park, Belfast; Terry Lagan, Ulverton Road, Dalkey, Co Dublin, and John Gallagher, Farmleigh Close, Stillorgan, Co Dublin.

It alleges the other defendants are liable to it over allegedly knowingly procuring the alleged deceit of IAL. It is alleged the three Lagan director defendants were the directors of IAL when allegedly fraudulent misrepresentations were made and had authorised the alleged mispresentations when they knew of tests results concerning the quality of the rock used.

It claims Mr Gallagher was managing director of IAL at the relevant time and was a very experienced engineer with an “in-depth” understanduing of aggregates.

JEC is claiming an indemnity against the Lagan defendants in relation to claims made against JEC over the infill material.

The Elliott company is basing its claim on material that emerged from other legal proceedings relating to the use of infill.

The cost of the product supplied to it by IAL was €525,582 but the potential value of legal claims against it is “many multiples” of that, JEC claims.

Mr Justice Peter Kelly has granted an application by Bill Shipsey SC, for JEC, to fast-track the hearing of the case in the Commercial Court.

Brian O’Moore SC, for the Lagan defendants, said his side would consider bringing an application requiring JEC to provide security for costs of the case.

In its action, JEC said it had successfully sued IAL for breach of contract over providing hardcore infill for the Ballymun Central Youth Facility but judgment on IAL’s appeal against that decision was awaited. JEC has also sued IAL, Lagan Holdings and others over the Ballymun Regeneration/Silogue House project but that case had not yet been decided.

IAL had secured permission for quarry operations at a site at Bay Lane to produce aggregate that could be used to supply an asphalt production plant operate by IAL in Ballycoolin, Co Dublin, JEC said.

In early 2003, IAL wrote to construction companies saying it could supply aggregate for cosntruction from the Bay Lane quarry and described the aggregate inter alia as “Clause 804” and “3 Inch Down”, JEC claims.

It alleges IAL failed to comply with fundamental requirements governing the production of unbound aggregates in Ireland. IAL knew the qauality of rock at Bay Lane was low grade and also knew from a EIS study of 1998 carried out by a Lagan company that much of the rock had a marked pyrite content, it claims.

On foot of representations by IAL that the product being sold was “Clause 804” or “3 Inch Down”, JEC agreed to buy aggregate from IAL for a significant number of building projects, it is claimed. It got delivery receipts describing the aggregate as “Clause 804” or “3 Inch Down” and between 2004-2007, ordered 54,161 tonnes of such product, it claims.

IAL “well knew” the stone being ordered was primarily for use as hardcore infill for construction projects but the infill provided by IAL was made up of argillaceous rock with an excessive disseminated pyrite content which caused it consistently to fail the specified and industry standard acceptance tests for those products, it claims.