Developer failed to fulfil agreement to purchase lease on building, court told

DEVELOPER Gerry Gannon failed to complete the purchase of a lease on a building which formerly housed an investment subsidiary of the Friends First financial group, it was claimed in the High Court yesterday.

The subsidiary, Liberty Asset Management (LAM), claims it was “trapped” into paying €120,000 per annum rent on its old offices at 54 Northumberland Road, Dublin, when Mr Gannon refused to complete an agreement to purchase its leasehold interest in the building.

This was supposed to be part of a larger deal in which Mr Gannon rented LAM another premises. Mr Gannon was to take over the old LAM offices which neighbour the developer’s business at 52 Northumberland Road.

Liberty is seeking orders to make Mr Gannon complete the May 2006 agreement to purchase the lease and is also seeking damages for losses allegedly incurred as a result of having to pay maintenance, insurance as well as the rent on the now vacated building.

Mr Gannon denies he entered into any such contract and, even if he did, it is not enforceable because there was no completed memorandum of agreement and therefore no binding contract.

Mr Gannon says any correspondence between the parties was subject to legal clauses whereby a contract would only exist subject to conditions.

LAM wanted to move to larger premises in 2005. They got into negotiations with Mr Gannon who had a large office premises available for rent at Richview Office Park, Clonskeagh.

Brendan Watchorn, counsel for LAM, told the court yesterday that as part of those negotiations, it was agreed that Mr Gannon would take over the lease of 54 Northumberland Road while renting out the Richview offices to LAM on a 25-year lease.

While the leasing of Richview went ahead, Mr Gannon waited until this was signed before he failed to proceed with the Northumberland Road deal, Mr Watchorn said.

The hearing before Ms Justice Mary Laffoy continues.

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