MINISTER FOR Health James Reilly and Fine Gael councillor Anne Devitt are among five people being sued by eight others at the Commercial Court in connection with an alleged agreement to buy a nursing home in Co Tipperary.
It is claimed Dr Reilly and Ms Devitt got involved with the plaintiffs and defendants in the Greenhills nursing home as a “tax-efficient investment”.
The 54-bed home began operating in 2001 and is described as “a commercial success”.
The plaintiffs claim, arising from an agreement of November 2000, that Dr Reilly, Ms Devitt and three others are now required to buy the home for €1.905 million, plus VAT, and to secure the release of the eight plaintiffs from liabilities in that sum to Bank of Ireland, which had lent money to fund the development of the home.
It is claimed notices served in April and May last required that agreement to be performed but those notices have expired without performance.
The eight plaintiffs are Michele Mellotte, Tullamore, Co Offaly, and Orla Higgins, Ashfield Road, Ranelagh, Dublin, both solicitors; John Caulfield, Belgrove Road, Clontarf, Dublin, John McGreevy, Mount Prospect Avenue, Clontarf, Dublin and John Whately, Ardee Road, Dundalk, Co Louth, all doctors; Garry Smyth, a civil engineer, Ailesbury Grove, Dundrum, Dublin; Tom Murphy, an IT consultant, Wynestown, Oldtown, Co Dublin, and Michael Morris, Chelmsford, Celbridge, Co Kildare.
The case is against Dr Reilly, “Seafoam”, South Shore Road, Rush, Co Dublin; Paul Kelly, Mountjoy Square, Dublin; Dilip Jondhale, Pococke Upper, Johnswell Road, Kilkenny; Ciarán Flanagan, Grattan Court, Inchicore Terrace South, Dublin; and Anne Devitt, Lispopple, Swords, Co Dublin.
The proceedings were transferred to the Commercial Court list yesterday by Mr Justice Peter Kelly but were adjourned to facilitate mediation. All sides consented to this.
Bernard Dunleavy, for the eight plaintiffs, applied to transfer the case. Charles Meenan SC, for Dr Reilly, said his client was not objecting to transfer but wanted the matter referred to mediation.
Dr Reilly also wished the case to be consolidated with another set of proceedings already in being which relate to rent arrears at the nursing home, counsel added.
Mr Dunleavy said the plaintiffs had no objection to mediation and would prefer if the matter could be resolved between the sides that way.
The judge noted the two sets of proceedings could not be consolidated into one as not all the parties were involved in both cases, although most of them were.
However, he urged the sides to try and resolve all the issues in both cases during the mediation process and to try and behave “sensibly and commercially”.
The judge has adjourned the matter to allow mediation take place.
If mediation does not succeed, it will come before the court again in October.
The plaintiffs are seeking orders requiring the defendants to honour contracts allegedly created in April 2011 on foot of put-and-call option agreements of November 2000 under which the defendants were to buy the plaintiffs’ interests in the Greenhills nursing home.
Alternatively, damages are sought, including damages for alleged breach of contract.
In an affidavit, Orla Higgins said Dr Jondhale and a medical colleague, Dr Vasudha Jondhale, had promoted the development of a residential care facility for elderly persons as a tax-efficient investment in summer 2000.
The parties were interested in becoming involved in a suitable tax efficient investment, she said.
By autumn 2000, the parties who were to take the lead role in the project were substantially identified.
The intention was the nursing home would not be sold until after the 10th anniversary of its first use as a nursing home when it was agreed a sale could be effected.
The nursing home was first used in April 2001 and the put-and-call agreement was now exercisable, she said.
