A BUILDING firm which paid €100 as a deposit for a €19m landbank near Dublin's Docklands is being sued by two developers who claim they are depending on the contract being honoured to complete other projects.
Yesterday, High Court judge Mr Justice Peter Kelly described as "extraordinary" a €19m contract for the sale of lands which, it is claimed, was secured on a deposit of just €100.
According to court papers, Donegal building contractors McGinley Construction Ltd, of the Hollands, Lifford, paid a deposit of just €100 when it agreed to buy lands for €19m at Ravensdale Road, East Wall, Dublin, from property developers John Burke and Sean Flanagan, of Summerhill, Co Meath.
The dispute was yesterday entered on to the list of the Commercial Court, the big business division of the High Court which fast-tracks commercial rows in excess of €1m.
The property row is the latest in a series of cases commenced in the High Court concerning alleged failure to complete contracts, or lawsuits involving failure to honour solicitors' undertakings.
It also comes as an increasing number of firms face possible closure and winding down under the supervision of the courts as the global credit crunch continues to impact on the Irish economy.
Mr Burke and Mr Flanagan, whose lawyers agreed the €19m contract was "rather unusual", claim they agreed a written contract on November 15, 2006, for the sale to McGinley's of the lands at East Wall near Dublin's Docklands development.
In the action, the duo claim it was an express term of the contract that the sale of the property would be completed and the balance of the €19m paid on or before May 31 last. However, the men have claimed that McGinley's has failed to complete the purchase.
The men say they are dependent on the contract being honoured to complete a number of other projects. Their solicitors had served a completion notice on the defendant firm on June 3 but McGinley's has refused to complete the contract, it is also alleged.
Mr Burke and Mr Flanagan say they understood McGinley's had entered into the contract with a view to commercial development of the East Wall property.
McGinley's, who last year was published on the Revenue Tax Defaulter List for under-declaration of VAT, claimed it had sought revised planning permission with increased density for the property but that permission was refused.
McGinley's, which specialises in house construction in Donegal and Dublin, had said this refusal presented a problem for them and the parties were unable to resolve that issue.
As well as the contract at issue, the developers also claim they had entered into a number of other agreements with the defendant, including a caretaker's agreement under which McGinley's had taken possession of the East Wall property as caretaker for them.
They had also entered into a conditional combined building agreement/contract for sale in relation to an apartment at Alexandra Place, East Road, Dublin.
Five years ago, Hugh McGinley, a director of McGinley Construction Ltd, was involved in a High Court dispute concerning the site of the former Inter County Hotel at Lifford, once owned by the late Donegal Senator Paddy McGowan.