Business

Judge directs parties to engage over defects in docklands office

‘Extremely unpleasant and nauseous sulphurous-like smell’ throughout the building, Rabobank alleges

A High Court judge has ruled the Zurich/Rabobank proceedings should take place first. Photograph: Bryan O'Brien

Fri Nov 17 2023 - 15:31

A High Court judge has directed parties involved in a dispute over defects in a new state-of-the-art office building in Dublin to engage so that remediation works can be carried out as soon as possible.

Ms Justice Eileen Roberts said if the parties in the dispute over the condition of floors leased by Zurich Insurance and Rabobank at 76 Sir Rogerson’s Quay do not voluntarily arrange for engagement between their respective experts, she would make formal directions that they do so.

The docklands building had been marketed by the developers as a “magnificent grade A HQ office building” and “a beautiful structure that will be a pleasure to work in”.

Both Rabobank and Zurich allege there are a number of defects in the building including with the air conditioning which makes some parts of the office very warm and other parts very cold. There are also problems with “poor to non-existent” air circulation, leaks and lingering odours.

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Rabobank, which has been in occupation since June of 2022, says there are “extremely unpleasant and nauseous sulphurous-like smells” throughout the building on a daily basis.

Zurich is yet to move into its offices and has delayed moving from its current Spencer Dock premises due to the building’s problems.

Zurich’s agreed annual rent is €751,000 while Rabobank is paying €1.3 million a year.

The two companies have brought separate proceedings against the landlord AM Alpha Lux Invest 130 SARL.

They seek orders that the defendant complies with its landlord obligations under the leases and that the defects be remedied. Zurich also seeks declarations that it is entitled to repudiate the lease if necessary.

Netherlands-registered Coöperatieve Rabobank UA, trading as Rabobank Dublin, says it made a range of complaints to the defendant and allowed an opportunity to investigate and resolve the problems but “little progress was made”.

Zurich Insurance plc, Zurich Treasury Services Ltd, and Zurich Financial Services EUB Holdings Ltd say they became aware of the problems when Zurich companies appointed the same consulting engineers as Rabobank had appointed to assist in fit-out arrangements before they moved to the new building.

The defendant, in denying the claims, says issues with the building have been contributed to or partly caused by the negligence or want of care on the part of, in this case, Rabobank, in carrying out certain fit-out works.

These works have effected interventions to the building systems including the heating system, the cooling system, the ventilation and/or the water quality of the building, it is claimed.

The defendant has also argued that because it has now commenced implementation of what it describes as a comprehensive remediation strategy, this dissipates the urgency of the claim. The defendant says this process is expected to be completed by the end of January 2024.

Last June, a number of other entities that had been involved in the original building project were added as third parties to the case on the application of the defendant and by order of the court.

These were: Bennett (Construction) Ltd, Ethos Engineering Ltd, Walsh Mechanical Engineering Ltd, RKD Architects Ltd and Trenmore Unlimited Co, trading as Linesight.

The third parties, with the exception of RKD, all pleaded that fit-out works had affected the systems in the building.

Rabobank and Zurich then applied to the court for the case against the defendant only to proceed in advance of the case against the third parties.

The defendant argued for a single unitary trial while all but two of the third parties wanted one hearing or one that had modules to deal with the various issues.

Walsh Engineering favoured a unitary hearing but with a pause to allow remediation works to take place. RKD supported a separate hearing of the Rabobank/Zurich case and the case involving third parties.

Ms Justice Roberts ruled the Zurich/Rabobank proceedings should take place first. In the meantime, she stressed she believed it was in the interests of all parties that their respective experts formally engage as soon as possible.

This would be for the purpose of achieving agreement on, or at least knowledge of, the proposed remediation works to be undertaken, she said.

The third parties may themselves propose to take on their own expert roles for the purposes of assessing those remediation works in advance of commencement, she said.

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