Firm sues supplier for alleged deceit over pyrite in product

A building company has sued Irish Asphalt L

td (IAL) for loss and damage for alleged deceit over putting on the market an infill product when it allegedly knew it was “not fit for purpose” and contained excessive amounts of reactive pyrite.

James Elliott Construction Ltd (JEC) says, arising from its use of the infill product supplied by IAL, legal actions have been brought against it by St Canice’s Boys National School and Forest Tosara Ltd.

It is also concerned about potential claims relating to 14 other building projects including Mulhuddart Enterprise Centre, Power City at Coolmine, Santry student accommodation and projects including at Blanchardstown, Donabate and Park West. It claims IAL misrepresented the quality of the product sold by it and either knew, or was reckless in whether its representation of the product was true or false.

JEC is also suing Lagan Holdings Ltd, with registered offices at Clarendon Dock, Belfast, and three of its directors – Kevin Lagan, Hampton Park, Belfast; Terry Lagan, Ulverton Road, Dalkey, Co Dublin, and John Gallagher, Farmleigh Close, Stillorgan, Co Dublin.

Other defendants
It alleges the other defendants are liable to it over allegedly knowingly procuring the alleged deceit of IAL. It is alleged the three Lagan director defendants were the directors of IAL when allegedly fraudulent misrepresentations were made, and had authorised the alleged misrepresentations when they knew of test results concerning the quality of the rock used.

It claims Mr Gallagher was managing director of IAL at the relevant time and was a very experienced engineer with “in- depth” understanding of aggregates.

JEC is claiming an indemnity against the Lagan defendants in relation to claims against JEC over the infill material.

The Elliott company is basing its claim on material that emerged from other legal proceedings relating to the use of infill. The product supplied to it by IAL cost €525,582, but the potential value of legal claims against it is “many multiples” of that, JEC claims.

Mr Justice Peter Kelly yesterday granted an application by Bill Shipsey SC, for JEC, to fast- track the hearing of the case in the Commercial Court.

Security for costs
Brian O'Moore SC, for the Lagan defendants, said his side would consider bringing an application requiring JEC to provide security for costs of the case.

He said it was “nothing short of extraordinary” that it had taken years to bring this claim of deceit.

Mr O’Moore said that this in itself showed how brittle th e whole claim is.