MacSharry property deal at centre of legal dispute
Published 19/10/2011 | 05:00
A "speculative property investment" in Co Sligo allegedly promoted by an accountant and involving former EU Commissioner Ray MacSharry and others is at the centre of a Commercial Court action which opened yesterday.
Three investors -- brothers Arthur, Kieran and John Grady and their company -- claim they suffered losses of more than €2.4m because of allegedly fraudulent claims by accountant Kenneth McMoreland and quantity surveyor Jack (Jackie) McMahon.
The allegations centre around the 2006 purchase of the Saehan site by Foresthaze Developments Ltd, a company of which Mr MacSharry was chairman.
Michael Cush, for the Gradys, said a sale and sub-sale arrangement in which the site was purchased in April 2006 in trust for Mr McMoreland and Mr McMahon for €9.85m and then purchased six months later by Foresthaze for €11.5m was withheld from the Gradys.
If they knew of that, they would not have invested, he said.
There was "a very interesting row" between Mr McMoreland and third parties to the action about "who knew what", Mr Cush added.
Mr McMoreland had alleged a number of people "knew at least as much as he did" and had betrayed him, but those claims were disputed.
Mr McMoreland last year secured orders joining seven persons -- Ray MacSharry Senior, Alcantar, Pearse Road, Sligo; Ray MacSharry Junior, Weston House, Johnstown, Naas, Co Kildare; Marc MacSharry, Fatima, Pearse Road, Sligo; Gerard Healy, c/o Kevinsfort Ltd, Castle Street, Sligo; Damien Torsney, Merrion Road, Ballsbridge, Dublin 4; and Edward Donaghy and Jacqueline Donaghy, Castletown, Drumcliffe, Co Sligo -- as third parties to the case.
Mr Justice Sean Ryan has begun hearing the Gradys' action against Mr McMoreland, Mailcoach Road, Sligo, an accountant and tax specialist formerly of Gilroy Gannon accountants; others practising as Gilroy Gannon accountants, Stephen Street, Sligo; Jackie McMahon, Creggconell, Rosses Point, Co Sligo, and Foresthaze, Millbrook, Riverside, Sligo.
The Gradys claim a gain from the alleged sub-sale was retained by Mr McMoreland and Mr McMahon and are claiming damages, against both men, plus an indemnity against any claims made under guarantees for €1m in favour of Foresthaze provided by them to Allied Irish Banks.
Opening the case, Mr Cush said the Gradys had dealings with Mr McMoreland and Gilroy Gannon from 2001 related to investments and tax issues. The Saehan project was first put to Arthur Grady by Mr McMoreland in April 2006 but no real details were provided until August 2006, he said.
The Gradys contended they were told at a meeting in Gilroy Gannon on September 11, 2006, that the price for the site was €11.5m, there was a €13.95m valuation from Lisney's, at least 300 houses would be involved and the involvement of Ray and Marc MacSharry in the project had been confirmed.
The Gradys "took comfort" from the MacSharry involvement, Mr Cush said. They confirmed the following day their investment would amount to €2.4m, meeting the funding gap.
Unknown to the Gradys, the true position was "radically different", Mr Cush said. The property had been bought in trust by Mr McMoreland and Mr McMahon for €9.85m with a sale closing date of August 31, 2006, a deposit had been paid by a number of the promoters or initial investors and a completion notice served on Mr McMoreland and Mr McMahon was due to expire in October.
On October 10, 2006, Mr McMoreland entered into an agreement with the vendor to facilitate a sub-sale and extend the time for completion, Mr Cush said.
The case continues.