High Court hears pyrite infill case

The “vast resources” being spent on the lengthy court battle between Menolly Homes and companies in the Lagan group over cracks and swelling in hundreds of homes in north Dublin allegedly caused by defective infill would be better spent on actually repairing the houses, the High Court was told today.

Some 400 homes are allegedly affected on three estates with one lawyer estimating the repair bill for his 175 clients at some €17.5 million based on a minimum €100,000 claim. Lawyers for the Lagan companies, who deny liability for the damage, contended the “vast majority” of defects were of “no sigificance”.

The Menolly/Lagan action, which began a year ago, has incurred costs of several million to date and is expected to run for many more months.

Judgment will then have to be delivered after which an appeal could be brought to the Supreme Court, a process that would last some years. The final costs bill is likely to be well over €20 million, sources estimate.

Paul Gardiner SC, for 175 homeowners, said they were very concerned about where the money is going to come from to repair the houses as the Menolly and Lagan sides were using vast resources to fight each other. It might occur to those companies there was a “non-court forum” to resolve their dispute but they could not be forced to do that, he added.

Senan Allen SC, for other homeowners, said it would be “vastly cheaper” to repair all the affected houses together and the way to do that was to “put a gun to all heads” by getting the homeowners' cases on.

The action is by Menolly Homes against Irish Asphalt Limited (IAL) and several companies in the Lagan group and arises from defects, allegedly as a result of defective pyrite infill, in houses in the Drynam, Myrtle and Beaupark estates.

Mr Justice Paul Gilligan, who is case-managing the Menolly/Lagan action, was asked to allow a number of test actions by home owners against Menolly to proceed parallel to the Menolly/Lagan proceedings. He will rule on that application, and other matters, next Tuesday.

The application comes after the judge last week refused to halt the action despite finding “negligent” and “blameworthy” failure by both sides to discover documents. The judge has outlined a series of directions to address those matters and to have the action resume as soon as possible.

Mr Gardiner said the homeowners' cases had been deferred after they were told in November 2008 it was hoped the Menolly/Lagan case would conclude by July 2009. The case would not finish by July 2010 and the past seven months were lost because of culpable conduct by both sides which had caused significant prejudice to his clients.

Instead of putting more resources into the case, Menolly and Lagan would be better served fixing the houses, he said.

Counsel said some test actions should be allowed proceed now against Menolly. While some of the Lagan defendants had been joined to the homeowners cases by Menolly as third parties, it had been said the third party issues would effectively be addressed in the Menolly/Lagan case, he noted.

Mr Gardiner also said cases involving houses identified as not having infill from IAL’s Bay Lane quarry should also be let go on against Menolly. His side wanted Lagan to identify those houses.

Paul Burns SC, for other homeowners, said their lives were “in limbo”. Some relationships had broken down but the parties were still bound together by a defective house asset “like an anchor around their necks”.

Brian O’Moore SC, for Menolly, said it was very conscious of the homeowners' plight but it was in their interest to have this case conclude first and to have the issues against Lagan resolved. Menolly was putting significant resources into the case to “rope in” the party liable for the damage and it was neither a sensible use of resources nor in the interests of homeowners to have Menolly involved in several cases at once.

Counsel said Menolly continues to have engineers availabe on a daily basis to address the defects as best it can until the case concludes. He added his side had not given up on an indemnity from Lagan for houses alleged to have no material from the Bay Lane quarry and wanted to carry out bulk samples on those houses but Lagan had strongly opposed that.

Hugh O’Neill SC, for the Lagan defendants, said it was their case the “vast majority” of defects were of “no significance whatever”.

He said the issues between Menolly and the home owners were separate from this case. However, his side would have resource dificulties if it was sought to address the third party issues in the homeowners' cases in parallel proceedings. There was no reason why cases involving houses which Lagan claim have no material from Bay Lane should not proceed against Menolly, he added.