Firm sues estate agents for €5.3m over alleged deceit

AN ACCOUNTANCY firm has sued estate agents Douglas Newman Good claiming losses of €5.3 million over allegedly being deliberately misled for a four-year period about the assignment of a lease for its former offices in central Dublin.

BDO Simpson Xavier (BDOSX) claims the defendant, through a then senior employee Ben Pearson, perpetrated a "deceit", including apparently "fictitious characters" acting on behalf of the Office of Public Works, in relation to alleged lease negotiations from 2002 to August 2006.

It claims DNG had informed it in August 2006 that Mr Pearson was no longer an active employee of DNG and that the alleged proposed assignment to the OPW had been "no more than a sham". It says DNG told it that certain parties whom Mr Pearson had alleged were acting on behalf of the OPW did not in fact exist, and that Mr Pearson had forged and/or produced documents purporting to come from the OPW which did not come from them at all.

Following discovery of the alleged deceit, BDOSX claims it engaged an alternative agent and within six months had assigned its leasehold in its former offices at Merchant's Quay to the HSE.

However, because of the alleged actions of the defendant, BDOSX claims it incurred losses of €5.3 million, as it was paying rent and other costs for offices it no longer occupied.

The legal action by the 23 partners practising as BDOSX, of Beaux Lane House, Mercer Street Lower, Dublin, was admitted to the Commercial Court yesterday by Mr Justice Peter Kelly.

The proceedings are against Edmund Douglas, trading as Douglas Newman Good. Ciaran Lewis, for BDOSX, and Paul Coughlan, for the defendant, consented to the case being admitted to the list. Mr Coughlan said he would bring a motion to join Mr Pearson to the proceedings.

BDOSX brought the case over their attempts to assign the long lease for their Merchant's Quay premises, as they were moving to new offices. They claim they employed the services of DNG, acting through Mr Pearson, but that the defendant failed to procure the assignment of the lease.

In an affidavit, Paul Keenan of BDOSX said Mr Pearson had represented in May 2002 that the OPW was willing to take an assignment of the lease and had kept the plaintiff informed of negotiations he was allegedly having with the OPW over the next few months.

Mr Pearson had instructed BDOSX's solicitors in November 2002 to draft contracts for the assignment on behalf of BDOSX. After contracts were exchanged, and up to August 2006, the defendant, through Mr Pearson, repeatedly told BDOSX that while the OPW was willing to take up an assignment of the lease, various stumbling blocks had arisen but ultimately the OPW would be in a position to take up the assignment, Mr Keenan said.

Mr Pearson had also represented to BDOSX that it should not advertise the premises in the hope of seeking an alternative assignee or sub-tenant and should not approach the OPW directly about the matter, Mr Keenan said.