THE sun may have shone, but it seemed the grey clouds of recession weighed heavily over Ireland as thousands of angry pensioners marched on Leinster House last Wednesday. As they jeered the Government for cutting their medical cards, heady tales from a more prosperous era were vividly recalled in a corner of the Commercial Court in Dublin.
here were deals in fashionable London restaurants, a private plane to whisk entrepreneurs to meetings, and insights aplenty into the then apparently unstoppable property boom.
The man recounting the stories was Ivor Fitzpatrick, the 53-year-old solicitor turned property entrepreneur, who with his two business partners is suing Harcourt Developments -- owned by Donegal tycoon, Pat Doherty -- over stg£150m (€187m) developments in Jersey and the UK. At issue is a nature of the business relationship between the two sides. Fitzpatrick and his colleagues claim they had a partnership, which is now being denied. Doherty vigorously disputes that.
Fitzpatrick gave his version of events. A well-known solicitor with a thriving practice whose client list includes the great and good of Irish society, most famously the late Taoiseach, Charles Haughey, Fitzpatrick was also bitten by the property bug.
Giving evidence, he recalled how he ventured into property as a young solicitor in the early 1990s. He first got involved in the UK market, buying and renovating properties before selling them on for a profit. When the Irish property began increasing in value from 1994, he began getting involved here.
He had an "excellent" and "very successful" partnership with friends. Peter Crean, a Kildare developer, was an old friend of 20 years; their wives were close friends. Andrew Kenny, the third partner, was also a developer with whom Crean had worked closely. Business boomed.
By 2003, they had run out of developments to work on. They had a great development team, Fitzpatrick explained to the court, but they needed a pipeline of projects to "keep us from drifting".
That was where Pat Doherty stepped in. Fitzpatrick and the Donegal developer knew each other socially, according to the solicitor. When he met Doherty in 2003 about another issue, he asked him to let him know if anything of interest was coming up. In January 2004, the call came.
Pat Doherty said; "Ivor, I might have a deal for you, will you swing by this restaurant." The restaurant was Motcombs, a famous establishment in the heart of London's fashionable Belgravia.
There Pat Doherty introduced him to the man with the deal, a London auctioneer called Lesley Baker. The Jersey government agency wanted to construct a waterfront development in St Helier, in Jersey. Anglo Irish Bank agreed to finance it. A who's who of clients were waiting to move in, according to Fitzpatrick. The auctioneer's company was the preferred bidder but needed a major international developer to get the project going. They moved fast. On one occasion, Fitzpatrick recounted how he hired a private plane to get to a crucial meeting in Jersey.
Four years on and the deal has soured.
Fitzpatrick claimed in court last week that Harcourt would front the project, while Fitzpatrick and his partners were to finance it and also develop it -- a claim that is disputed by Doherty.
The case is expected to continue in the Commercial Court for several weeks -- one of an unprecedented volume of cases listed for hearing. The case against Harcourt Developments is not the only action in which Ivor Fitzpatrick is involved. He is also embroiled in an acrimonious legal row with his former business partner and friend, the media-shy developer, Paddy McKillen, over the company they founded together. The case is listed for hearing next month.
In the past year, the turn-over of cases at the Commercial Court has soared: from 145 in July 2007 to 244 this year. Set up to "fast-track" business disputes worth over €1m, the court is becoming snowed under.
There is little doubt that the fuel for this dramatic increase in litigation is the downturn in the economy, according to industry sources. Irish property developers rode the crest of the Celtic Tiger wave and made millions. Now that the tide has turned, the detritus of deals brokered in more prosperous times has washed up at the Four Courts.
When the Commercial Court opened for business earlier this month, boxes of documents and affidavits alleging disputed business deals, property sales allegedly reneged on, littered the floor. Last week, Mr Justice Peter Kelly was moved to remark on the raft of claims coming before the court relating to "specific performance contracts", which boils down to claims of contracts not being honoured.
One case involved two Corkmen, John Coleman and Michael Coleman, who claimed that they agreed to sell some land to a building company, Murphy Construction, for €39.5m. They received €30m in November 2006, but two years later claim they are still waiting for the balance of €9.5m.
The Colemans wanted the case, which is currently before the High Court, to be fast-tracked in the Commercial Court. Judge Kelly refused, following objections from the building company.
Another case concerned a man, now deceased, who agreed to sell land in Clondalkin to a company called Dansoc for €11.4m. The sale was to have been completed last April, but so far only €2.29m has been paid -- according to the man's representatives.
Dansoc faced a second case from Patrick and Eileen Conway, from Baldonnell, who claimed the company agreed to buy a house and land worth €6m but failed to complete the sale. Those cases have been adjourned, while the Commercial Court facilitates talks between the sides.
Usually, provision for arbitration is built into construction contracts.
The idea is that if something goes wrong, it can be resolved confidentially. That is no longer a viable option. Arbitration can take two years. The Commercial Court is faster and its procedures and judgments more precise, according to Damien Keogh, a leading construction lawyer.
Contractors are looking to circumvent arbitration clauses to get their cases into the "fast-track" commercial court, he said. These days, time is of the essence, according to Keogh, head of construction litigation at Matheson Ormsby Prentice.
"The timeframe within which companies are resorting to legal action is shortening all the time. Where a contractor might have spent two or three months waiting for money he is owed, he is now moving faster to recover debts," he said.
Most of the cases before the Commercial Court concern disputed deals brokered during boom times. Such is the case with property tycoon, Bernard McNamara, who is being taken to court by business associates who want him to pay them €7.5m for their share of a property company.
In 2004, McNamara and fellow shareholders in a company called Novorstan came together to buy a piece of land near Grafton Street for a large commercial development. McNamara, a former county councillor from Clare, was one of Ireland's biggest developers, a prolific builder and is passionate about hotels (his portfolio now includes the Shelbourne, the Galway Radisson and Parknasilla in Kerry).
The other Novorstan shareholders, who include successful entrepreneur Paschal Taggart, agreed to give McNamara an option requiring them to sell out their shareholding to him for an agreed price. They claim that McNamara exercised that right in 2006. Two years later, they claim their shareholdings have still not been purchased and that they are owed €7.5m. Two of the shareholders claim they are due €3.17m each, while Taggart and two others claim they are due amounts of around €385,000.
On Friday it seemed the case was close to being resolved; lawyers for the plaintiffs asked for it to be adjourned, saying the matteer may not trouble the courts.
On another front, McNamara is taking legal action against Dublin City Council in the Commercial Court. He claims the council has effectively thwarted a €40m property development at Elm Park by putting a group of properties he planned to include on a protected structures register.
Fianna Fail will not relish the prospect of a looming court battle between one of its councillors, Ger Killally, who is being sued over allegations from business associates that he pocketed secret profits from property deals. Councillor Killally, an auctioneer from Offaly, also happened to be Brian Cowen's running mate during the 2002 election. Now three former business associates are suing him, alleging that he and his business associate, the senior GAA football manager Richard Connor, introduced them to certain land deals but made secret profits for themselves.
In one such deal, the partnership claim they were told the land would cost €6.5m. They allege that the lands were secretly sold for €5m, leaving the defendants with a secret profit of €1.5m. That case was admitted to the Commercial Court last week.
Killally and Connor are disputing the claims.
Not everyone is resorting to the courts, however. Some have taken to picketing. A group of angry sub-contractors protested outside Whites Hotel in Wexford two weeks ago, claiming that they had not been paid for work.
The sub-contractors -- including traders and suppliers -- were hired by Cleary and Doyle, the main contractors, to carry out work at the hotel. They claim they haven't been fully paid because Cleary Doyle says it is owed €3.2m by the company that hired it to do the work.
The good times may be over for the property tycoons. But they are only beginning down at the Four Courts.
