Council 'concerned' over Carroll money
Dún Laoghaire-Rathdown County Council has told the Commercial Court it is very concerned about €57 million public monies handed over to companies of developer Liam Carroll.
The money relates to a joint venture agreement for a science and technology park in Cherrywood.
The council has an obligation to protect these public interest monies if it believes they are “in jeopardy” and that is why it has brought court proceedings, Pauline Walley SC, for the council, said today.
County manager Owen Keegan said in an affidavit the eight defendant companies made the “astounding” assertion earlier this week the council has no beneficial interest in the lands at Cherrywood where buildings had been constructed under the joint venture.
This was “a clear attempt by the companies to enrich themselves unjustly and is wholly unconscionable”, he said. This, and the declared insolvency of companies in Mr Carroll’s Zoe group, were facts which the council could not ignore.
Mr Keegan added the Council had been assured by solicitors for the defendants these eight companies were not affected by the application for court protection for the Zoe companies, which will be decided tomorrow.
The council claims it is entitled to a one third share of the Cherrywood development and profits from it but alleges the defendant companies had breached the August 1997 joint venture agreement (JVA) by creating additional charges with banks over the properties and lands without either the council’s knowledge or consent.
The council also says it is concerned many properties built by the companies on the site were built on the parts of the site not owned by the council. A “meaty” good faith clause of the JVA required neither party to act to the detriment of the other but the council was concerned this was what had occurred, Ms Walley said.
In his affidavit, Mr Keegan said the council had trusted assurances given by the eight companies on June 16th last the banks were on notice of the council’s interest in the Cherrywood development and the council’s interest was protected.
However, in a letter of July 29th last, it transpired, far from the council’s interest being protected, the eight companies denied the council has any claim to any beneficial interest in the lands and buildings. This was despite the previous assurances and the fact the council had paid €57million of public monies.
Other concerns included the defendant had charged twice for works for which €1.22 million was already paid, Mr Keegan said. While the defendants asserted this was a simple error, the council was concerned about this and other claims for payment for works done.
Mr Justice Peter Kelly said he was satisfied the matters raised by the council had the required urgency to allow him permit the council apply at short notice to have its proceedings transferred to the Commercial Court.
The judge listed the application for transfer for hearing on August 6th next when the defendants - eight companies and two banks - will have an opportunity to be represented.
The case is against Cherrywood Science and Technology Park, Cherrywood Properties, Craddder, Frescatti, Giotti, Vienesse, Nervana and Precidence, all with addresses at Chapel House, 21-26 Parnell Street, Dublin 1 - and two banks, Bank of Scotland (Ireland) and Allied Irish Banks.
The banks have been joined as defendants because the council wants a declaration all charges or other securities created by the companies in favour of the banks are subject to the council’s legal and beneficial interest.