Docklands authority argues McNamara case cannot proceed

THE RESIGNATION of developer Bernard McNamara as a director of his company Donatex Ltd in unclear circumstances has left that company with no directors, raising issues about its entitlement to maintain legal proceedings against the Dublin Docklands Development Authority (DDDA), the Commercial Court has heard.

The action by Donatex and Mr McNamara relates to the November 2006 agreement with the DDDA for the €412 million purchase of the Irish Glass Bottle (IGB) site at Ringsend.

Mr McNamara and Donatex Ltd, Pembroke Road, Ballsbridge, claim the DDDA had no lawful power to enter into the agreement and was unable to perform its obligations under the deal, therefore frustrating the ability of Mr McNamara and others to develop the site and leading to very substantial losses for them.

The case was before Mr Justice Frank Clarke yesterday via an application by McNamara’s side for a modular trial, meaning the court would first determine the central issue of whether the DDDA had the legal power to enter into the agreement.

The judge was told none of the applications could proceed because of issues concerning Donatex. Patrick Fox, Clontarf Road, Dublin, had resigned as company secretary of Donatex last November and, following searches carried out by the DDDA’s lawyers, it appeared Mr McNamara also resigned, either on January 4th or March 8th last, the court heard.

Because a company is legally required to have two directors, the resignation of Mr McNamara raised “serious concern” as to Donatex’s capacity to conduct and give instructions in its proceedings against the DDDA, Conor McDonnell, a solicitor for the DDDA, said.

In an affidavit dated March 8th last, Mr McDonnell said his side had learned, since November 10th last, Donatex had only one director, Mr McNamara, in breach of the Companies Act and the company’s own articles of association, both of which required the company to have two directors.

Martin Hayden SC, for Mr McNamara and Donatex, said he had no valid instructions as of yesterday about the position relating to Donatex and had expected that matter to be resolved. The matter appeared to have arisen because Mr McNamara had resigned from a number of companies, he said.

He said he had been told Mr McNamara would carry on as a director but Mr McNamara was out of the country yesterday and his side required instructions. In the circumstances, he accepted the application for a modular trial could not proceed and would have to be adjourned.

Mr Justice Clarke said, if Mr McNamara had resigned on January 4th, the failure to tell anyone was a surprise and any backdating of a resignation letter was not acceptable if a person was holding out they were not a director of a company at a particular time.

Listing the matter for Monday, the judge said he was concerned how this position had been arrived at and wanted to keep the matter under review.