FINANCIAL ISSUES which are holding up the refurbishment of Puxley Manor, Castletownbere, Co Cork, were raised in the High Court yesterday.
Building contractor PJ Hegarty and Sons is suing a development company over its alleged failure to pay €1.2 million due on the €50 million refurbishment of a house in Cork as a new hotel.
The contractors say Resort Hotel Developments (RHD) Ltd, with registered offices in Merrion Square, Dublin, had failed to pay €1.29 million due to them arising out of work done on Puxley Mansion, Castletownbere, which is being turned into the Dunboy Castle Hotel. Work has been suspended on the project since January last because of alleged funding difficulties.
The Commercial Court heard yesterday that since legal proceedings were initiated against RHD, it was consenting to summary judgment in relation to €370,000 due to the contractors. However, it (RHD) was arguing that there was a question mark over the remaining money until the project was completed.
Mr Justice Peter Kelly yesterday entered the case into the Commercial Court and gave summary judgment in relation to the €370,000 with the issue over the remaining balance to be dealt with at a future date. He adjourned the matter to January 19th to allow RHD to file affidavits.
In its claim, PJ Hegarty’s, of Carroll’s Quay, Cork, says it entered an agreement with RHD on July 31st, 2006, as main contractors to carry out the refurbishment, conservation and reconstruction of the house.
The work was to be completed in about 65 weeks but it was subject to significant delays because of the failure of RHD to secure a flow of funding to keep the works going with reasonable efficiency, Declan O’Brien, a director of PJ Hegarty’s, said in an affidavit.
Funding for the project was coming directly from RHD itself, from investors purchasing apartment/bedroom units within the new hotel, and from IIB bank, Mr O’Brien said. RHD had experienced funding difficulties including one, in May 2008, when there was a shortfall of €359,000 due to PJ Hegarty’s, he added.
By the time an architect’s interim certificate was issued, on September 2008, for works done by PJ Hegarty’s to the value of some €30 million, there was €370,000 owing, Mr O’Brien said. Further sums built up last year and a promise by RHD to pay €450,000 before November 5th, 2008, was not fulfilled, Mr O’Brien claimed.