Judge criticised confidential Carroll-DDDA deal

BACKGROUND:Developer Liam Carroll planned to build offices twice the size he sought permission for, writes STEPHEN COLLINS

THE DRAFT report produced by solicitor Declan Moylan for the Dublin Docklands Development Authority (DDDA) contains a narrative of dealings between authority executives and developer Liam Carroll in 2008.

The contacts between the two sides eventually led to a confidential agreement that was later criticised by a High Court judge.

At the core of the matter was a plan to build a three-block commercial complex in the docks which, Carroll hoped, he could subsequently double in size.

One of the blocks was to be rented to his banker, Anglo Irish Bank, while a second was to be rented by O’Donnell Sweeney Eversheds, solicitors for Carroll’s company, North Quay Investments Ltd (NQIL).

As was established practice, Carroll first approached the authority in November 2006 to discuss possible fast track permission for a proposed development in the North Lotts area of the docks. Several meetings took place and were attended by Carroll and his team on the one hand, and authority chief executive Paul Maloney and some of his associates on the other. The board was informed of the contacts.

It appears Carroll was not satisfied with the DDDA executives’ initial responses to his proposal, and he lodged a planning application with Dublin City Council. The DDDA objected to the application, and the council rejected it.

One of Carroll’s executives, David Torpey, then approached the authority about a new fast track application. According to the Moylan report, it was at this stage that Maloney decided to try to enter into an agreement with NQIL whereby it would voluntarily agree to cede a strip of land it owned to the authority, so it could be developed as a public space.

“It seems clear to me that the CEO was the decision-maker with regard to the use of as the device to ensure timely delivery to the authority of the strip,” Moylan wrote. “The other members of the executive who were involved were acting pursuant to that decision of the CEO.”

Negotiations began, with NQIL being advised by O’Donnell Sweeney Eversheds and the authority by AL Goodbody. By May 4th, 2007, a draft agreement prepared by Carroll’s lawyers was being worked on. NQIL was to submit a plan for its site that was within the parameters of the 2002 North Lotts Planning Scheme.

The authority was to initiate the necessary procedures to amend the planning scheme which would allow NQIL to apply later for an increased, and predominantly commercial, development on the site. The authority would be ceded the strip of land it wanted to develop as a park.

Discussions continued. From correspondence quoted in the Moylan report, it seems one of the considerations discussed was the need for NQIL to satisfy Anglo in relation to the density of the proposed development.

On May 31st, 2007, the agreement was signed by both sides. The board, when it agreed to the fast track permission for the site, was not aware of the detail of the agreement.

Moylan, in his draft report, expressed the view that executives believed “they had the requisite authority to enter into this agreement. I believe that this view was incorrect.” He was satisfied, however, that his view of the true position in regard to the executives’ and the authority’s roles “was not the understanding of the executives at the time that the agreement was entered into”.

The details of the agreement came to the attention of the board when developer Seán Dunne took a case against the authority and NQIL, arising out of the permission granted to NQIL. The court ruled in favour of Dunne, and said the secret agreement created a “reasonable apprehension of bias” on the part of the authority.

Although the planning application that was granted was for three eight-storey blocks, the agreement envisaged 16-storey buildings once the planning scheme for the area was changed. The car-park under the currently half-built structure is suitable for such a height.

The new board of the authority has concerns about the fact that two members of its board up to April 2007 – Lar Bradshaw (chairman) and Seán FitzPatrick, – were also on the board of Anglo Irish Bank.

It is understood Moylan did not hold the view that their cross-directorships influenced the authority’s dealings regarding NQIL. The issue did not feature in his report, which he was told should be “forward-looking”.