The Commercial Court has ruled that developer Bernard McNamara must pay almost €63 million to a group of investors, who along with the Clare businessman, part funded the purchase of the Irish Glass Bottle Factory site at Ringsend in Dublin.
The court also granted the investors summary judgement of €98m against Donatex Limited, a company owned by Mr McNamara, in relation to the same deal.
However, a stay has been put on the decisions until January so that an affidavit can be prepared in relation to what was described as Mr McNamara's deteriorating financial circumstances.
The claim arose in relation to a 2007 guarantee given by Mr McNamara over a loan advanced by the investors, through their Jersey registered company, Ringsend Property Ltd, to help the financing of the purchase of the site.
It was bought that year for a record €412m. The site is now estimated to be worth in the region of €60m.
In an affidavit, Mr McNamara alleged that the investors behind Ringsend Property Ltd include well-known businessmen Lochlann Quinn, Martin Naughton, Kieran McLaughlin and Barry O'Callaghan.
The investment opportunity was described at the time as a transaction offering ‘the opportunity of participating with one of the most prolific and successful developers in the country in the development of the largest and most high profile property to become available in Dublin 4 for decades.’
Ringsend Property Ltd is seeking the repayment of its loan, because it claims a key clause of the loan agreement had been breached.
The clause stated that if the development company, Becbay Limited, hadn't applied for the necessary certificates from the Dublin Docklands Development Authority (DDDA) or hadn't been granted planning permission by Dublin City Council within 30 months, then the loans should be repaid.
Section 25 of the Dublin Docklands Development Act 1997, which sets up the DDDA, allows for planning permission to be fasttracked in certain circumstances. The DDDA is also a 26 percent shareholder in the company behind the development.
Mr McNamara and Donatex had put forward four defences, including that Ringsend Property Ltd had not complied with other provisions of the loan agreement, that the contract had been made invalid because the DDDA was not able to issue the certificates needed for the fast tracking of planning permission, and that the loan agreement was to last until 2014.
But in his judgement, Mr Justice Peter Kelly, dismissed all the defences entered. He said the investors lent the money on the basis that it would be repaid by Becbay if the circumstances in the key clause arose.
The risks attached to that clause were attached entirely to Becbay, and not the investors, he said. He said the clause could have been drafted in a different fashion so as to remove from or reduce the risk to Becbay, but it wasn't.
On foot of an agreement between both sides, Mr Justice Kelly directed that the order giving effect to the judgements be not made up, pending a further hearing of the matter in January.
In the interim, the plaintiffs are to file an affidavit about what Senior Counsel John Gleeson said was Mr McNamara's deteriorating financial circumstances, and the defence will consider whether or not to appeal.
