MR Michael Lowry accepted that his company, Streamline Enterprises, became completely dependent on Dunnes Stores for business. He said invoices for Pounds 41,250 were raised by Streamline every year for four years after a loan for that sum was made available by Dunnes Stores for the building of a warehouse and acquiring the land for Mr Lowry's company.
He admitted that his company broke even or made only a small profit at this time, when Dunnes Stores made good its losses.
He said that in a letter on February 22nd, 1989, to Mr Irwin, accountant with Dunnes Stores, he expressed a wish to formalise the agreement he had reached with Dunnes to provide refrigeration services. Mr Lowry received a monthly cheque from Dunnes Stores and here he was establishing his overheads, be said.
The scheme proposed by Mr Lowry succeeded in making substantial savings for Dunnes Stores. During a meeting with Mr Ben Dunne in the latter's office, he was told: "You are doing an excellent job and Dunnes Stores will look after you.
Loans totalling Pounds 165,000 had been made available by Dunnes Stores. He told Mr Denis McCullough SC, for the tribunal, that the arrangements were made between his own accountants and those of Dunnes Stores.
"I knew that the loan of Pounds 165,000 was reflected in the company accounts and was to be repaid over a four-year period. I left this matter for the accountants to deal with. I don't know how it was actually done."
Mr McCullough suggested that Dunnes Stores' accountants were "keeping both sides of the books."
Mr Lowry replied: "My company had its own accounts department, its own administration, and these accounts were maintained by Oliver Freeney's."
Mr Lowry said he did not feel Dunnes Stores had total control over his business. His company was dependent on Dunnes Stores for income and from a cash-flow point of view. Initially, the operation was "based on trust."
Mr McCullough asked: "You were absolutely and completely dependent on Dunnes Stores?"
Mr Lowry replied that he was.
Payments in excess of Pounds 12 million were paid by Dunnes to Streamline Enterprises between February 1989 and December 1996. A further Pounds 13 million was paid for the sourcing of equipment at factory floor prices and Dunnes made major savings in relation to this, said Mr Lowry.
"In the time-span that you have referred to, I would have, through my company, processed approximately Pounds 25 to Pounds 26 million worth of refrigeration equipment. If you took from that the lowest industry mark-up, my company could have expected to generate a profit in the region of Pounds 4 million."
Mr McCullough said the point was that Mr Lowry's company did not generate that profit. Mr Lowry agreed that was the case.
Mr McCullough suggested that Mr Lowry was making substantial savings for Dunnes Stores, but his own company was not making a profit.
Mr Lowry replied: "That was obviously the attraction for Dunnes Stores and the reason Mr Dunne structured the company in this way initially was that he was aware they could make substantial savings, which is what I have referred to earlier on."
The arrangement was that Mr Dunne, in what was to be an annual review, would take into account the savings his company had made and paid Mr Lowry personally or his company, whichever Mr Dunne decided.
Mr McCullough said: "It was going to be you, wasn't it, Mr Lowry?"
Mr Lowry replied: "It was either to me or the company, at his discretion."
Mr McCullough said: "Well, it wasn't very likely going to be the company, was it?"
Mr Lowry answered: "Well, obviously he (Mr Dunne) had to keep the company in profit."
Mr McCullough said that the position was that although his company would never make more than a small profit, Mr Lowry would himself be paid. Mr Lowry confirmed this was the case