Drocarne seeks ruling on alleged land agreement

A Treasury Holdings subsidiary, Drocarne Ltd, has brought High Court proceedings aimed at enforcing an alleged agreement with another company for a proposed "Best of Ireland" €125 million development in Co Louth.

When the alleged agreement was signed, the lands in question at Tullyallen in the Boyne valley were zoned agricultural. They were rezoned by Louth County Council in July 2004, thus greatly increasing their development value.

The action by Drocarne Ltd, with offices at Barrow Street, Grand Canal Docks, Dublin, against Seamus Murphy Properties and Developments Ltd (SMP), with registered offices at Hampton Place, Balbriggan, Co Dublin, opened yesterday before Ms Justice Mary Finlay Geoghegan and is expected to last four weeks.

Drocarne claims the sides entered into a master development agreement (MDA) on December 21st, 2000 for the development of 125 acres at Tullyallen. Under the agreement, it claims SMP was obliged to make the lands available for Drocarne to construct a development scheme to be "reasonably consistent" with the Co Louth development plan.

Drocarne says that, while it used its best endeavours, it was not always possible to progress the development in accordance with timescales laid down in the agreement due to factors outside the control of the parties, including the fact that the lands were not rezoned until 2004 and that other local development plans needed to be finalised.

It says it had proposed a development scheme for the provision of tourism-related development on part of the lands, to include a factory outlet, but that both sides recognised this proposal could not be progressed until the council dealt with an application by another developer for a similar development at Ballymascanlon, Co Louth.

Bord Pleanála approved the Ballymascanlon scheme in February 2005. Drocarne claims it immediately set about preparing a revised scheme and presented that scheme, entitled "The Best of Ireland" to Seamus Murphy and Patricia Murphy of SMP on March 30th, 2005.

That revised scheme was designed to take advantage of the Tullyallen site, which is close to a number of archaeological sites and tourist attractions, including Newgrange, Tara, Slane and the site of the 1690 Battle of the Boyne, Drocarne said.

However, in August 2005, SMP disposed of 3.75 acres which were subject to the MDA, Drocarne claims. On August 3rd, SMP claimed the MDA was no longer operational as none of the key dates had been achieved.

Drocarne claims that, on August 31st, 2005, in response to an e-mail from Richard Barrett of Treasury, Ms Murphy confirmed that SMP was happy to proceed with the development.

However, on January 11th, 2006, SMP said the MDA was at an end and gave "no substantial reason" for that change of attitude, Drocarne contends.

In a defence and counterclaim, SMP denies the claims and pleads the MDA is at an end. It claims that, because of its conduct and because of representations on which SMP relied, Drocarne is not entitled to argue the MDA continues to apply.

It also claims that, before the MDA was entered into, SMP had acquired option rights relating to the lands. In entering into the MDA in December 2000, it was seeking to maximise its return from the development.

SMP contends Drocarne failed to operate the agreement.