Tuesday 21 January 2020

Gayle Killilea firm settles High Court claim over €2.5m hotel repairs

Sean Dunne and Gayle Killilea-Dunne
Sean Dunne and Gayle Killilea-Dunne

Tim Healy

A COMPANY owned by Sean Dunne's wife, Gayle Killilea, has settled its court action over an alleged failure to pay it €2.5m for work on two flooded Dublin 4 hotels.

Mavior, an unlimited construction firm of which Ms Killilea is the sole beneficial shareholder, claimed in the High Court that a banking syndicate owed it €2.5m which the company spent repairing the Tower and Ballsbridge Inn Hotels following flood damage in October 2011.

The hotels were run by another company called MJBCH which was controlled by her husband, Mr Dunne.

Mavior claimed breach of contract by Zrko Ltd, a company set up by Ulster Bank, ACC and Icelandic bank Kaupthing, to represent their legal and beneficial interest in the hotels.  Mavior also claimed it was unlawfully excluded by Zrko from the hotels in March 2012 and was entitled to what it had expended on works up to that date.

Zrko had denied there was any contract and Mavior therefore had no entitlement to sue for alleged breach.

Following talks yesterday, Jim O'Callaghan SC, for Mavior, said the matter had been resolved and the only orders required were that a lodgment in court previously made by Zrko could be paid out in part satisfaction of Mavior's claim.  Interest earned on the lodgment could go to Zrko and previous costs orders could be vacated with the case put in for mention again on November 6, counsel said.

Opening the case earlier, Mr O'Callaghan told Mr Justice John Cooke, that Zrko had granted a lease to MJBCH to manage and run the hotels from December 2009 to December 2011.

On October 24, 2011, three-and-a-half inches of rain fell in Dublin causing the banks of the River Dodder to burst and the water to flood down Pembroke Road and into the hotels.

Mavior was on site the next day to start remedial works and continued to work until March 2012 when it was put off the site, he said.

About a month after the flooding, Mavior entered a formal contract with MJBCH, on behalf of Zrko as the insured party for the hotels, and it was Mavior's case that at all times, MJBCH was acting as a agent for Zrko, counsel said.  The contract was signed on behalf of MJBCH by Sean Dunne and MJBCH's representative at the hotels, Ross Connolly, who was also a director of Mavior, counsel said.

The total amount of works on the hotels certified by a quantity surveyor employed by Zrko was just over €3m but Zrko paid out just €1.89m to Mavior, counsel said.

Mavior then brought its legal action claiming a total of €2.5m, representing the balance of those works certified up to €3m and the money Mavior says it actually earned before it was put off site.

One of the matters the court would have to decide, Mr O'Callaghan said, was whether MJBCH had the authority to enter into an agreement with Mavior to carry out the works.  However, even if it was decided there was no contract, it did not mean his client did not have a claim because it was accepted works were carried out on behalf of the defendant.

Letters exchanged between representatives of Zrko and MJBCH during November and December 2011 provided evidence there was an agreement, counsel said.

In one of the letters, written by Sean Dunne, he complained about the defendant putting conditions on the contract some seven weeks since the flood and when 50pc of the work had been done, counsel said.

Mr Dunne also said the most important issue was to get the hotels reopened in time for Christmas and the New Year conference trade.

Workers were on site until 4 in the morning and at weekends, he said.

He also warned that non-payment for work done so far could lead to suspension of the works with the consequent impact that could have on the hotel business.

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