A COMPANY involving solicitor and developer Noel Smyth lost out on huge profits from the proposed redevelopment of The Square shopping centre in Tallaght due to the conduct of three other developers, the Commercial Court was told yesterday.
The 18-acre site at The Square alone was valued at some €375 million in April 2004 without any redevelopment having taken place and it was also estimated in 2004 there could be a €413 million net profit from redevelopment, Paul Sreenan SC, for Redfern Ltd, Mr Smyth’s company, said.
Mr Sreenan said documents indicated Bank of Scotland Ireland had in early 2006 believed the profits from the redevelopment would be some €316 million for Redfern and another €240 million for Aifca Ltd, a company formerly controlled by developers Larry O’Mahony and Thomas McFeely but now controlled by developer Liam Carroll.
Mr Smyth was an experienced developer and had adopted a more conservative approach to profitability, believing the bulk of profits would come from a planned phase four development, Mr Sreenan said.
As a result of the actions of Mr O’Mahony, Mr McFeely and Mr Carroll, Redfern’s interest was now “valueless” and it is entitled to aggravated and exemplary damages of more than €140 million from them as there was now no prospect of carrying out the development as originally planned, counsel said.
While Mr Smyth still hoped to go ahead with some development, the most he could hope for in the current economic climate was to break even, counsel added.
Redfern’s €140 million claim includes general damages of more than €130 million, including for €32.7 million for Redfern’s lost profit share; €21.2 million in lost project management fees and €42 million for loss of rental value.
It is also claiming special damages of more than €8.7 million allegedly incurred through wasted costs and time on progressing a planned joint venture with Mr O’Mahony and Mr McFeely.
Redfern claims that joint venture never proceeded because Mr O’Mahony and Mr McFeely instead did a deal behind Redfern’s back with Mr Carroll, owner of a rival development in Tallaght.
Mr Sreenan said it was clear from documents discovered for the legal action that, while Mr O’Mahony and Mr McFeely were in negotiations with Mr Smyth about a joint venture development of The Square, they were also in contact with Mr Carroll who was being kept informed of developments.
Counsel was continuing his opening of the action in which Redfern alleges Mr O’Mahony and Mr McFeely broke a deal with Redfern of August 4th, 2005 for redevelopment of The Square and “double dealt” with Mr Carroll.
The case before Mr Justice Brian McGovern is expected to last eight weeks. Redfern claims it was in a key position to develop The Square but needed control of the Lowe licence, required to secure access to large areas of the shopping centre.