Meeting on 50% company share disputed

A BUSINESSMAN involved in a property development company with another man has claimed he learned the cash assets of that company had been reduced from €7.7 million to some €70,000 and transferred to companies owned or controlled by the other man.

James Osborne, of Sandymount House, Blackrock, Dundalk, Co Louth, has also claimed he did not sign accounts for the end of 2006 of Castleway Developments Ltd (CDL) although those accounts contained his purported signature.

Mr Justice Peter Kelly yesterday began hearing proceedings by Mr Osborne against John McCann, with an address in Switzerland.

Mr Osborne wants orders requiring Mr McCann to comply with the terms of an alleged agreement reached after a six-hour meeting in Molesworth Street, Dublin, on July 7th, 2008.

Mr Osborne claims it was agreed at that meeting Mr McCann would, by July 31st, 2008, pay him €1.75 million for his 50 per cent share in CDL and a further €1.18 million for fees and interest relating to another company, Castleway Orion Ltd (COL).

Mr McCann claims the alleged agreement of July 7th, 2008, was reached in the context of his repeated expression of concerns about the operation and/or ownership of CDL and in the context of his threatening legal proceedings.

In his defence, Mr McCann denies all the claims, denies Mr Osborne expressed any concerns about the affairs of CDL and/or COL, and also denies Mr Osborne threatened any proceedings.

Mr McCann also denies any agreement was reached on July 7th, 2008, and, without prejudice, pleads if an agreement was reached, it was subject to the completion of a share purchase agreement. He also pleads any agreement entered into is void and unenforceable due to mistake, uncertainty and incompleteness.

Outlining the case, John Hennessy SC, for Mr Osborne, said the central issue was that an oral agreement was reached at the end of the meeting on July 7th, 2008, although no document set out the terms of that agreement.

Counsel said Mr Osborne and Mr McCann had worked together in the area of commercial property development with the vehicle for investment being CDL, which was owned by Mr McCann but in which Mr Osborne later acquired a 50 per cent interest. CDL, by the end of 2006, had accumulated profits of some €7.7 million.

COL was later set up to raise funds for commercial property developments in the UK.

Relations between the two men became strained in 2007 and Mr Osborne was excluded from joint projects, counsel said.

He anticipated his departure from CDL and believed it had cash assets of some €7.7 million but learned, after repeated queries, that figure had reduced to €70,000 in June 2008.

Mr Hennessy said a signature in the name of James Osborne on the accounts of CDL for the end of 2006 was not in fact his client’s and a signature on another COL document was also not his client’s.

Counsel said Mr McCann resigned as a director of CDL in July 2006 and was purportedly replaced by another man but that appointment was invalid.

The case continues.