The former Taoiseach, Mr Albert Reynolds, is one of three defendants being sued for £560,000 sterling (€861,671) by a Derry-based construction company over a joint venture agreement relating to proposed construction projects at two sites, the High Court was told yesterday.
Mr Justice Kelly granted an injunction restraining one defendant, Mr Patrick Russell, Old Forge, Hill of Down, Enfield, Co Meath, from reducing his assets below £875,000 or disposing of them pending the trial of a full action.
Yesterday's injunction proceedings were against Mr Russell only and not against Mr Reynolds or the third defendant, Universal Management Consultants, of St Helier, Jersey, Channel Islands. No date has been set for the hearing of the full action against the three defendants.
Counsel for Mr Reynolds, Mr Martin Hayden, said a lot had been said in court yesterday in the context of the injunction application in rel ation to his client. But he added that Mr Reynolds entirely rejected the allegations against him.
His side was unaware of yesterday's application until they received papers late last Friday. Mr Russell was not represented at yesterday's hearing. The judge said there was uncontroverted evidence that Mr Russell had made it clear he intended to leave the State. He gave leave to Mr Russell to apply to the court at 72 hours' notice to the plaintiffs.
The proceedings have been taken by O'Neill Brothers (Building Contractors) Ltd, of Pennyburn Industrial Estate, Derry. Mr Patrick Keane SC, for O'Neill Brothers, said the company had had from late 1997 extensive dealings with Mr Reynolds and Mr Russell regarding possible construction projects in Derry and at Swords, Co Dublin. In an affidavit, Mr Desmond O'Neill, a director of the Derry company, said it had paid out £650,000 sterling to the defendants and on top of this had incurred losses of around £70,000. It had repeatedly demanded repayment of the money from the defendants but had not received anything up to the present.
Mr O'Neill said that, in November 1997, Mr Noel Gallagher, of Brandywell Road, Derry, approached the directors of O'Neill Brothers and indicated he had an influential and wealthy acquaintance whose expertise might enable it to expand its business through joint projects and asked whether the company would be interested in exploratory talks.
The company replied positively and a short time later, they were introduced to Mr Reynolds, of Ailesbury Road, Dublin. A number of meetings took place between the plaintiff's directors and Mr Reynolds. It was decided in early December 1997, at a meeting with Mr Reynolds, that the project selected would be a housing and hotel development at the former Good Shepherd Convent premises in Derry's Waterside.
Mr O'Neill said that, at this point, Mr Reynolds introduced them to Mr Russell, who, according to Mr Reynolds, was going to provide detailed knowledge and expertise in the day-to-day management of the project. Mr O'Neill said the Derry project encountered difficulties in mid-July 1998 and O'Neills was asked to close the sale of the land. The defendants had defaulted in producing funds which they had agreed to produce.
O'Neills tried to find alternative partners but was unsuccessful. The vendors rescinded the contract. O'Neills lost £250,000 and incurred consequential losses of around £20,000 in connection with the Derry project.
O'Neill Bros was also requested by Mr Reynolds and Mr Russell in December 1997 to become involved in a project in Swords to develop industrial land. Heads of agreement were prepared. The Swords project did not develop and in October last, O'Neills sought return of certain monies.
Mr O'Neill said he believed UMC was a company in the Channel Islands outside the court's jurisdiction and did not appear to have any significant assets.
At present, O'Neills had lost £650,000 and incurred additional losses.
Granting the injunction, Mr Justice Kelly gave liberty to O'Neill Bros to notify any financial institution of the injunction against Mr Russell to ensure that it was effective.
