McNamara regrets resignation at Donatex

DEVELOPER Bernard McNamara has told the Commercial Court he “inadvertently” resigned from his company Donatex Ltd last January in the course of resigning as a director from some 60 other firms after receivers were appointed to those companies by the National Asset Management Agency (Nama).

In an affidavit yesterday, Mr McNamara said his resignation from Donatex – which is suing the Dublin Docklands Development Authority (DDDA) in connection with the €412 million deal to buy the Irish Glass Bottle site in Ringsend – was a “cause of great embarrassment” to him and he wished to apologise to the court over it.

His counsel said steps had been taken by Mr McNamara to address the legal difficulties resulting from Donatex having had no directors for some months now. Under the Companies Act, a company is legally required to have two directors.

Arising from what Brian Murray SC, for the DDDA, described as “oddities” concerning those steps, and issues raised by the judge himself, pre-trial applications in the proceedings by Donatex and Mr McNamara against the DDDA were adjourned for another week by Mr Justice Frank Clarke to allow certain matters be addressed.

The judge said two issues raised by Mr Murray should be clarified by Mr McNamara’s side.

These related to who had the power to appoint directors to Donatex, whether it was Mr McNamara himself or a company of his, McNamara Securities. If that power lay with McNamara Securities and it had no directors, there could be a further layer of difficulty, the judge said.

The judge agreed with Mr Murray that it was clearly wrong for Mr McNamara to have said in his affidavit three directors had been appointed to Donatex after “a duly convened meeting of the board of directors” on March 19th last. There could not have been a meeting of the “board of directors” in circumstances where Donatex had no directors, the court noted.

The judge said Mr McNamara should file an affidavit dealing with those matters and he would consider the situation again next Monday.

In their proceedings, Donatex and Mr McNamara claim the DDDA had no lawful power to enter into the November 2006 Irish Glass Bottle site agreement and was unable to perform its obligations under the deal, therefore frustrating the development of the site and causing substantial losses for them.

In a pre-trial application, the McNamara side are seeking a modular trial, meaning the court would first determine the central issue of whether the DDDA had legal power to enter into the agreement. Discovery issues have also been raised.

The judge was told last week those applications could not proceed because Donatex had no directors. Patrick Fox, Clontarf Road, Dublin 3, resigned as company secretary last November and, following searches carried out by the DDDA’s lawyers, it appeared Mr McNamara also resigned later, the court was told.

The absence of directors raised “serious concern” as to Donatex’s capacity to conduct the proceedings, Conor McDonnell, a solicitor for the DDDA, said.

In his affidavit yesterday, Mr McNamara said three directors and a company secretary have now been appointed to Donatex and he expressed his regret at what had happened.

The situation arose after he was advised by Nama last November it was appointing receivers to some 60 companies under his control and, as a result, he decided to resign from those companies, he said. Through inadvertence, he had signed a letter resigning from Donatex on January 4th.