Legal row may delay €300m development

A legal row could delay a planned €300 million development at The Square shopping centre in Tallaght, Co Dublin, the High Court has heard.

Yesterday, Mr Justice Peter Kelly said The Square shopping centre seemed "to give rise to more litigation than any other piece of real estate". His comments came as he admitted the proceedings to the list of the Commercial Court, the commercial division of the High Court.

The action has been brought by Redfern Ltd, a company with registered offices in St Helier, Jersey, against Larry O'Mahony, Shrewsbury Road, Ballsbridge, Dublin, and Thomas McFeely, of Ailesbury Road, Dublin, and arises from an alleged contract agreement of August 4th, 2005, between the sides.

Redfern is the sole beneficial shareholder in another company, Alburn, while the defendants are claimed to carry on business in a partnership which, it is claimed, controlled Lowe Taverns (Tallaght) Ltd through a shareholding in a company called Aifca Ltd.

Redfern claims it and the partnership entered into a written agreement of August 4th, 2005, relating to the disposal of the partnership's interest in Lowe to Alburn, in exchange for Redfern's issue of shares in Alburn to the partnership.

Redfern claims it, with the consent of the defendants, secured planning permission for development of phase III of The Square shopping centre in Tallaght, which is valued at more than €300 million.

The proposed development is for 1.3 million sq ft of mixed-use development, incorporating 355 apartments, a hotel, some 250,000 square feet of retail, office and leisure facilities and 1,500 car parking spaces.

A planned phase IV development of 900,000 sq ft is also at "masterplan" stage.

Redfern claims the phase III development has been certified by South Dublin County Council for the extension of "substantial" urban renewal tax incentives, due to expire in June 2008.

It claims the alleged breaches of contract by the defendants have delayed work on the development and thus prevented Redfern from availing of the benefits of allowances.

Redfern claims the terms of the alleged contract are evidenced by a letter of August 4th, 2005, from solicitor Noel Smyth, on behalf of Redfern, to Ivor Fitzpatrick & Company, solicitors for the partnership. It claims the alleged contract provided that, on completion of the sale of the Lowe shareholding, Redfern and the partnership would be equal 50 per cent shareholders in Alburn with equal board representation.

After the alleged contract was reached, the parties could explore the possibility of and attempt to negotiate alternative arrangements with regard to their respective interest at The Square, Redfern claimed. It claims such explorations were entirely without prejudice to the rights of the parties under the agreement.

However, the partnership has since failed to agree the terms of a shareholders' agreement and has failed to engage in good faith or in any meaningful way in relation to the negotiation of that agreement, it is claimed. Redfern contends the partnership is now in breach of the agreement and is purporting to reserve its rights relating to the agreement.

Redfern is seeking a court declaration that the agreement of August 4th, 2005, is a valid and subsisting contract which is binding on the parties. It also wants specific performance of a draft shareholders' agreement of April 4th, 2007, and damages for alleged breach of contract.