Promoters of Kilkenny firm sue IDA for negligence

The English promoters of a company in Co Kilkenny have sued the Industrial Development Authority for more than £2 million. This follows the collapse of the company due to the IDA's alleged negligent misrepresentation that a suitable premises and skilled workers were available.

The action has been taken by Mr John Pryke and his wife, Anne, of Clopton, Suffolk; Mr Pryke's father, Victor, of Hadleigh Road, Ipswich, Suffolk, and Mr Jeremy Adam, of Redhill Grange, Wellingborough, all promoters of Card Technology International Ltd (CTI), which operated from 1994 at the Industrial and Business Park, Purcellsinch, Co Kilkenny, until a receiver was appointed in December 1995.

Mr Paul Gallagher SC, for the plaintiffs, told the High Court the company failed because the IDA, in apparent "general panic" in 1994 over the loss of another company to Kilkenny which had promised 500-700 jobs, had misrepresented to CTI the suitability of a building for the operation and the funds available to upgrade it.

The IDA had also misrepresented that there were skilled printers available in Kilkenny who could do the work required.

The IDA had indicated the premises would be brought up to "IDA standard", described as a modern standard, and the promoters allocated just £50,000 towards building security and adaptation. However, the costs of upgrading were £500,000.

If the promoters were made aware of the true position regarding the Kilkenny premises and the lack of skilled printers they would not have invested the £2,050,000 they had and, consequently, would not have lost it. They were seeking to recover those monies from the IDA on the grounds of negligent misrepresentation and breach of duty of care.

Mr Gallagher said it was tragic that the IDA failed to recognise the seriousness of its misrepresentations and was still attempting to avoid responsibility.

The IDA denies the alleged misrepresentation or any misrepresentation and pleads that the business failure was due to the promoters themselves.

Opening the case, Mr Gallagher said Mr John Pryke and Mr Adam were successful businessmen who between them had 40 years' experience in the printing industry in England when they decided to examine the possibility of opening a business in the south-east of Ireland. Mr Pryke had sold his shareholding in an English company, Serif, and looked to Ireland. Mr Adam gave up a secure job to join him in the venture.

They had set up CTI to manufacture high-quality cards, both cardboard and plastic. Some £2,050,000 was invested in the venture by Mr John Pryke, Mr Victor Pryke and Mr Adam, the bulk by Mr John Pryke.

Mr John Pryke and Mr Adam approached the IDA in London in January 1994 and there followed meetings and tours with IDA personnel in Ireland. In May 1994, they were shown some premises, including one in Kilkenny. They were told they should think about whether they wanted a unionised site and were told "not to approach SIPTU".

IDA personnel made clear representations to Mr Pryke and Mr Adam on two critical points - the suitability of the Kilkenny premises and the availability of printers with experience in printing card.

The plaintiffs accepted there would not have been persons skilled in printing plastic cards at that time but they were told there were sufficient number of skilled card printers in Kilkenny. They did get a flood of applications but there were no print finishers and insufficient trained printers.

He said the IDA was aware the promoters were investing their own money in the venture. It was a requirement for IDA grant aid that the promoters put up a certain amount of money and the IDA had allocated aid of more than £1 million.

He said an IDA document showed it was aware in 1994 that the upgrading costs of the premises would be much more than budgeted for by the promoters and should have informed them.

When Mr Pryke became aware of the significant defects in the Kilkenny premises, he threatened to withdraw from the project but remained after IDA assurances.

Mr Gallagher said the alleged misrepresentations caused delays in getting into the market which led to loss of significant contracts.

The case continues today.