One of the objectors to Apple's Athenry data centre is facing a €22 million claim from Ulster Bank over unpaid loans.
The bank is seeking judgment against three brothers over money given to them to buy an 80-acre site in Wicklow where it was proposed to develop a data centre.
Brian McDonagh, of Dromin House, Dromin East, Delgany, Co Wicklow, is being sued by the bank and two receivers it appointed over the land at Kilpedder alongside his brothers Kenneth McDonagh and Maurice McDonagh, both of Charleston Road, Ranelagh, Dublin.
Brian McDonagh was one of three objectors who challenged the planning permission granted to Apple for an €850 million data centre project in Athenry, Co Galway, delaying the high-profile project which was eventually abandoned by Apple.
Mr Justice Paul McDermott ultimately dismissed Mr McDonagh’s challenge, ruling that he lacked the necessary legal standing to challenge An Bord Pleanála’s decision for reasons including that he did not live close to the site and had not participated in the planning process.
He said Mr McDonagh should have disclosed that he was a director and shareholder of Ecologic Data Centre, which had secured permission for a data centre on a Co Wicklow site considered as an alternative location for the proposed Apple development.
Mr Justice McDermott said the court was satisfied there had been “significant non-disclosure and lack of candour” by Mr McDonagh, which had not been sufficiently explained, in his action in relation to his interest in challenging the development.
In the current action, Ulster Bank said the brothers also sought to deceive it by using a company which the bank described as “a front” for one of the brothers to buy the land for just €1.5 million, where the original loan for the property was €21.5 million.
The plaintiffs are seeking judgment for €22 million as well as declarations that the brothers were in breach of a 2014 agreement to deal with their debt.
It arose out of a 2007 loan for €21.8 million to the brothers to buy the Kilpedder site. Planning permission was obtained for a data centre on the property but ultimately it did not proceed.
The case was admitted to the Commercial Court on Monday by Mr Justice Robert Haughton on consent between the parties.
In an affidavit, Ulster Bank relationship manager Brian Conlan said that, under a 2014 agreement to deal with their debt, the McDonaghs were to sell the land by the end of July 2014.
They failed to do so but instead purportedly entered into an agreement to sell the land for €1.5 million to a company called Granja Ltd without the knowledge of the bank and in breach of the 2014 settlement agreement, Mr Conlan said.
Granja brought High Court proceedings in 2014 claiming the bank failed to specifically perform an agreement between them. Five days into the hearing of that case, it was discontinued.
Mr Conlan says it became clear in those proceedings, during cross-examination of the principal witness for Granja, that it (Granja) was “in fact ‘a front’ for Brian McDonagh” for the purpose of acquiring the land without the knowledge of the bank and therefore writing off all outstanding debt.
Mr Conlan says that while the McDonaghs are likely to contend they were not in default of their loan in accordance with the 2014 agreement with the bank, this is not the case.
The defendants failed to sell the land as was agreed and instead sought to “deceive the bank through using Granja as a device for their own gain to reclaim the land and avoid their liability under the [loan] facility”.
Mr Conlan also says they failed to openly market the property following the agreement and that Brian McDonagh failed to provide the bank with a charge over a holiday home he has in Portugal.
It is also claimed the brothers are engaged in an attempt to further delay and frustrate the sale of the land by the receivers. Cattle have been put on the land, a “for sale” sign was burned down and “no trespass/private land” signs had been removed, Mr Conlan said.