A COMPANY of solicitor and developer Noel Smyth has lost its High Court action for €140 million damages against three developers - Larry O'Mahony, Thomas McFeely and Liam Carroll - over their involvement in broken, secret deals related to a planned €300 million development at the Square Shopping Centre in Tallaght.

Dismissing the action by Redfern Ltd yesterday, Mr Justice Brian McGovern was strongly critical of the conduct of all the parties involved.

The issue of who will pay the multi-million euro costs of the 63-day action will be decided later.

Redfern claimed it was in a key position to develop the Square some years ago following agreements with Square Management Ltd but needed to own what was known as the Lowe licence to secure access to large areas of the shopping centre. Mr McFeely and Mr O'Mahony later bought the Lowe licence for €55 million, with finance from Bank of Scotland Ireland, and held the Lowe interest through Aifca Ltd.

After lengthy negotiations brokered by former trade union leader Phil Flynn, acting for Mr O'Mahony and Mr McFeely, an agreement was signed with Redfern in August 2005 for disposal of the Lowe interest to Alburn, a subsidiary of Redfern, and for a joint venture development of the centre.

Redfern alleged Mr O'Mahony and Mr McFeely subsequently agreed another deal behind Mr Smyth's back with Mr Carroll - the Aifca agreement - causing Aifca's shares in Lowe to be transferred to Tafica Ltd, a company controlled by Mr Carroll.

The defendants in separate defences alleged Redfern failed to complete the August 2005 agreement causing serious financial difficulties for Mr O'Mahony and Mr McFeely resulting in their reaching an agreement with Mr Carroll to refinance their borrowings. Mr Carroll and his companies denied any liability under the August 2005 agreement.

In his reserved judgment, Mr Justice McGovern found Mr Smyth, his companies Redfern and Alburn, Mr O'Mahony and Mr McFeely had all breached the good-faith obligations of the Redfern agreement by their conduct. He ruled the agreement had been repudiated by actions of all parties to it, was "more honoured in the breach than the observance" and was rescinded by the Phil Flynn-brokered agreement of August 2005.

He also found the Redfern agreement was unenforceable on various grounds, including that loans being offered by Anglo Irish Bank in February 2007 to Alburn for the Tallaght development were strictly on the basis Mr O'Mahony and Mr McFeely would not be participating in that development.

He was not impressed by the "wilful concealment" by Mr Smyth of the conditions attached by Anglo for that loan when he was corresponding with South Dublin County Council and its legal adviser about the matter.

The judge found Mr O'Mahony made the first approach to Mr Carroll for help in bailing out himself and Mr McFeely.

Mr Carroll's motives in becoming involved were "self-serving" and the "elaborate steps" taken by him to ensure his involvement was kept secret from Mr Smyth lent credence to that, he said. However, Mr Carroll could only be liable for damages if, at the time he became involved, the Redfern agreement still subsisted.

The judge ruled, when the Aifca agreement between Mr Carroll, Mr O'Mahony and Mr McFeely was concluded on September 198th 2006, the Redfern agreement was no longer subsisting.

In those circumstances, Redfern had failed to establish a breach of contract or procurement of a breach of contract and no damages liability arose.