Court told of progress in property company row

THE COMMERCIAL Court has heard that "significant progress" has been made in talks between lawyers for solicitor Ivor Fitzpatrick and property developer Paddy McKillen, who are in dispute about the conduct of the affairs of a major property development holding company.

The case was due for hearing yesterday and expected to last four weeks. However, after day-long talks between the sides, Mr Justice John MacMenamin was told yesterday evening by Michael Cush SC, for Mr Fitzpatrick, that "good progress" had been made.

John Gleeson SC, for Mr McKillen, said that while significant progress had been made, the case was not settled and he asked that the court be available to hear it today.

The case relates to the conduct of the affairs of Canton Caseys Ltd (CCL), with offices at St Stephen's Green, Dublin, which was incorporated in 1986 and acts principally as a holding company in the field of property development. Through Powerscreen Indo-China Ltd and Powerscreen Equipment (Vietnam) Ltd, CCL has, or had, interests in distribution agencies and in quarries in southeast Asia.

Mr Fitzpatrick and Mr McKillen are both directors of CCL and Mr Fitzpatrick had claimed the intention was they would, directly or indirectly, have equal rights within the company. However, he claimed he became concerned from about 2002 about the behaviour of Mr McKillen and Mr McKillen's company, Fountain Properties Ltd, regarding the conduct of CCL's affairs.

In 2006, he said he had complained about oppressive behaviour and/or behaviour by the respondents in disregard of his interest in the company.

This behaviour included the failure of Mr McKillen to fulfil his responsibility relating to CCL's investment, through Powerscreen (Vietnam) Ltd, in Vietnam, and Mr McKillen's handling of dealings with Sean McCormack and Peter Laking in Vietnam, he claimed.

Mr Fitzpatrick claimed Mr McCormack had embezzled and/or misappropriated assets relating to a quarry business in Vietnam and that both Mr McCormack and Mr Laking fraudulently sold a quarry business at Vinh and fraudulently misappropriated the proceeds of that.

Mr Fitzpatrick claimed Mr McKillen later acted in a highly damaging way by vetoing strategic steps which Mr Fitzpatrick proposed to take relating to court proceedings in London against Mr McCormack and Mr Laking.

Mr McKillen had also sought to undermine Mr Fitzpatrick's reputation with Anglo Irish Bank and made "groundless" allegations of professional incompetence and conflict of interest against Mr Fitzpatrick, it was claimed. Other "groundless" complaints included allegations by Mr McKillen of overcharging on the part of Mr Fitzpatrick's law firm and of alleged financial impropriety by Mr Fitzpatrick.

Mr Fitzpatrick said an agreement reached last December between the sides after mediation provided, subject to agreement on the tax position, for Mr McKillen to take the Vietnam investment and a development at South Anne Street in Dublin and to pay to Mr Fitzpatrick a balancing payment of €10 million. Mr Fitzpatrick was also to take the balance of the property set out in a schedule and liabilities were to be split 50/50. He said the agreement was to be the basis upon which the affairs of CCL were to be operated from December last and upon which the relationship between the sides would be structured.