Developer in €50m action for breach of contract

PROPERTY developer Bernard McNamara and public relations consultant James Morrissey, directors of the company Varleigh, are pursuing Ronan McNamee and the IAWS food group for breach of contract.

The €50 million case will now be held before the Commercial Court.

A statement released yesterday said: “Varleigh and Mr James Morrissey intend to vigorously prosecute a multi-million euro breach of contract claim against Aryzta’s subsidiary company IAWS and Mr Ronan McNamee.”

This follows the successful application in the High Court yesterday, for an order transferring the case to the Commercial Court.

Varleigh and Mr Morrissey said in a statement they will be applying for the €50m action “to be listed for hearing at the earliest opportunity”.

Arysta confirmed proceedings have been initiated against them and Mr Mcnamee.

The case has arisen “from an alleged failure to pursue a common course in planning matters relating to development properties in Tallaght, Dublin”, Aryzta said.

“The group considers the case to be without merit. A complete defence to the claim, based on the law and the facts, is being vigorously pursued,” it said.

Sixteen acres of land are involved in the dispute, with each party owning eight acres. Land ownership is not in dispute but the alleged failure of IAWS and McNamee to agree to proceed with a site master plan.

Varleigh claims it was wrongfully induced by IAWS and Mr McNamee, founder of Cuisine de France, into entering a contract to purchase the Uniphar Pharma site at Tallaght for some €52m, which was funded by Ulster Bank.

On the basis of the alleged misrepresentations, Mr Morrissey claims he guaranteed Varleigh’s liabilities. The plaintiffs say the site is now valued at €33.6m and they would not have entered into the purchase contract were it not for the representations by the defendants.

They also claim the site would be worth substantially more — up to €117m — had the defendants honoured an alleged agreement relating to joint planning submissions to South Dublin County Council for redevelopment of the Uniphar site along with two adjoining sites.

The defendants will be contending the claims against them are “stale” and “unsustainable” and that they also had concerns about the financial status of Varleigh, the judge heard. Mr McNamee said his side believed there had been an attempt “to make us the scapegoats for the delays in your getting the council onside”.

The Uniphar site was adjoined by two sites in which it is alleged Mr McNamee and IAWS had a controlling interest. It is claimed there were negotiations between the parties for the acquisition and development of the Uniphar site in conjunction with the IAWS sites and that Mr McNamee conducted negotiations on behalf of himself and IAWS.