Holiday home management company sues operators at estate over maintenance

Defendants say they spent own money on maintaining common areas

Mr Justice Seamus Noonan in the High Court rejected the Neville application on grounds they had been “at best dilatory” in applying for security for costs more than two years after the case began.

Mr Justice Seamus Noonan in the High Court rejected the Neville application on grounds they had been “at best dilatory” in applying for security for costs more than two years after the case began.

 

A holiday home management company is suing the operators of the development claiming there was a failure to maintain common areas of the estate and no funds to address the alleged state of disrepair.

Pebble Beach Owners Management Company is suing a number of individuals, trading as the Pebble Beach Holiday Home Operator (PBHHO), and an accountant, over a scheme of 223 holiday homes in Tramore, Co Waterford, the last of which was completed in 2003.

PBHHO is the trading name for Seamus Neville and six other members of his family.

The defendants deny the claims against them and the Nevilles say they spent a substantial amount of their own funds to maintain common areas.

The defendants sought an order from the High Court requiring the owners/management company to provide security for the family’s legal costs should the plaintiffs lose the action, which began in 2014.

Mr Justice Seamus Noonan rejected the Neville application on grounds they had been “at best dilatory” in applying for security for costs more than two years after the case began.

The judge said a previous application for security of costs against the owners/management company had been brought by accountant Colin Doyle of BJ Doyle and Co, who were auditors for the Neville defendants, and who were also sued.

In that case, the court had ordered security because of the poor state of the finances of the owners/management company. The court heard that, between 2013 and 2014, just 31 per cent of owners had paid their service charges.

Even if the charges were paid, these would come to just €140,000 while the likely legal costs of this case appeared to be some €244,000, the court heard.

Mr Justice Noonan said, while it was clear the owners/management company “is struggling under significant financial constraints”, special circumstance applied in this case because of the Neville defendants’ delay in seeking security for costs.

There was an onus on the Nevilles to make the security application as soon as possible and it was not obvious why it took two years to make, he said.

He therefore refused security for costs.

Earlier, the judge said it would appear the management company was theoretically responsible for the upkeep of common areas, which were transferred to it in December 2009.

However, the Neville defendants effectively left the management company dormant, he said.

It was not alleged the Nevilles misappropriated the money but that they failed to maintain the estate or to collect adequate charges to do so, he said.

Instead of collecting charges directly from owners, the Nevilles collected rents from tourists and deducted management fees. It would also appear, until December 2009, the BJ Doyle accountant defendant filed company returns in relation to the management company showing “nil” income and expenditure, he said.

The owners/management company now claim the defendants failed to operate the management company properly and intermingled management charges with rental income.

No sinking fund was set up to provide for contingencies and the owners/management company say they have suffered substantial losses as a result.