Businessman seeks €13m damages from developers

A Co Kildare businessman is seeking damages of up to €13 million from a property development company he was in partnership with…

A Co Kildare businessman is seeking damages of up to €13 million from a property development company he was in partnership with for developing a 24-acre site at Kilcullen, Co Kildare, the High Court was told yesterday.

Brendan O'Connell is alleging breach of contract and breach of duty by AWG Development Ireland Ltd, formerly known as Morrison Development (Ireland) Ltd.

Mr Justice Frank Clarke was told by Mark Sanfey SC, that Mr O'Connell and Morrison Development had set up a joint company, Brenmorr Development Ltd, to develop a 24-acre site owned by Mr O'Connell at Kilcullen.

It was proposed to build 145 residential units and to apply for planning permission for further development of the site, counsel said. It was intended the venture would make more than €8 million profit, of which Mr O'Connell would get 50 per cent.

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However, only 34 residential units were built on the site, known as Riverside Manor, and planning permission is to expire in June 2006. Mr Sanfey said that Mr O'Connell is seeking to get back the title to the undeveloped land. The damages sought by Mr O'Connell could come to between €12-€13 million, counsel added.

Mr Sanfey said Mr O'Connell had assembled a 24-acre site over 20 years and was approached by Morrison Development in April 2000, who suggested a joint venture to develop the site. In February 2001, the two parties reached a joint venture agreement and set up Brenmorr Developments Ltd, which was 50 per cent owned by Mr O'Connell and 50 per cent owned by Morrison Development.

Morrison Development was to act as the developer and to manage the site and was to be paid a management fee of €1.2 million. Mr O'Connell was to be paid €6.6 million, with two further payments depending on the planning permission. Both parties agreed to lend €1.9 million to Brenmorr.

Planning permission was obtained in June 2001 for 145 residential units and, under the joint venture agreement, Morrison Development agreed to seek further planning permission, counsel said. Mr O'Connell would say that he was "a sleeping partner in the agreement" and the sole responsibility for development of the lands lay with Morrison Development.

From the outset, the development was beset by difficulties and work was slow, counsel said. A complicated management structure also hindered the development. In early 2003, only 34 units had been built, there was no sign of any more development and no further planning permission had been sought for phases two and three.

Between April 2003 and April 2004, the two parties met several times to discuss an exit strategy for Mr O'Connell, he said. Attempts were made by Mr O'Connell and his accountant to get a true picture of the finances of Brenmorr and it became apparent that Brenmorr was in far more trouble than was expected.

Mr O'Connell regarded the joint venture as having been terminated and the development abandoned in March 2004. The case continues.