Dunnes case told action was taken to embarrass Smyth

The former executive chairman of Dunnes Stores, Mr Ben Dunne, has claimed his brother, Mr Frank Dunne, "intensely disliked" solicitor Mr Noel Smyth and was the "prime instigator" of proceedings against Mr Smyth.

In an affidavit to the High Court yesterday, Mr Ben Dunne said the intention of Dunnes' present court action was to "cause as much embarrassment and frustration as possible" to Mr Smyth "and as a result to myself".

Mr Dunne said he had agreed in October 1991, to release to Livingstone Properties Ltd (LPL), a company of which he knew Mr Smyth to be a director, a deposit of £500,000 for a property deal at Ayrefield, Malahide Road, Co Dublin.

Mr Dunne said Mr Smyth had agreed that LPL would be responsible for the costs of applying for planning permission for a shopping centre at Ayrefield. There was a clear understanding that, in the event of the transaction not proceeding, the deposit would be returned to Dunnes Stores, but without interest, costs or compensation subject to the other terms of the contract.

Mr Dunne said "certain unhappy differences" arose between his family and himself in 1993. His brother, Mr Frank Dunne, assumed responsibility for all company property transactions.

"My brother disliked the defendant (Mr Smyth) intensely and also was unhappy about my relationship with him. He became aware of the transaction on the Ayrefield site and set about cancelling the contract on that site, I believe, because of his dislike for the defendant notwithstanding its obvious benefit to the Dunnes Stores Group."

The affidavit was read on the second day of proceedings taken by Dunnes Stores Ltd against Mr Smyth, a solicitor and partner in the firm Noel Smyth & Partners, Fitzwilliam Street, Dublin, and Livingstone Properties Ltd, with a registered office in Limassol, Cyprus.

Dunnes is seeking the return of £500,000 which it claims it paid to LPL, of which it claims Mr Smyth is a director, in relation to the 1991 property deal involving lands at Ayrefield. The company is also seeking orders setting aside a purported contract of sale of lands at Ayrefield between Dunnes and LPL.

Mr Smyth denies allegations of breach of duty, contract or negligence. He is counter-claiming that the proceedings are motivated by malice against him and is seeking damages. LPL is also counterclaiming for damages and an order that it was entitled to forfeit the £500,000 deposit.

Mr John Gordon SC, for Dunnes, yesterday read an affidavit from Mr Ben Dunne. Mr Dunne, of Winterwood Castleknock, said he was joint managing director and executive chairman of Dunnes Stores from 1983 until July 1993.

He said he had viewed by helicopter, along with Mr Smyth and Mr Gerry Gannon, the Ayrefield site on October 3rd, 1991. He was told by Mr Smyth that the property was owned by LPL but that Mr Smyth was the 100 per cent beneficial owner. Mr Smyth told him that Livingstone was a Cyprus company but had changed its residence for tax purposes to Ireland and that its business was operated for and on its behalf through the offices of Mr Gerry Gannon or Gannon Homes Ltd, whose registered office was at Amiens Street, Dublin.

He said Mr Smyth told him an adjacent site at Ayrefield was owned by Mr Gannon or one of his companies but that Mr Smyth and Mr Gannon had reached an accommodation which could allow Livingstone enter into a contract with Dunnes for all the lands.

Later that day, Mr Dunne said he indicated he was only interested provided Dunnes could have control of the entire site. Mr Gannon indicated a valuation above £3 million had been obtained for the entire property. He suggested Dunnes purchase the property, subject to planning permission, for about £1.8 million and that Dunnes, in building its own store, would build some shop units and Livingstone and Gannon would be entitled to 50 per cent share of these at no cost.

He said Mr Gannon indicated it would be inadvisable to withdraw from the current planning permission and said when the "footprint" of a planning permission was obtained, further applications would be more easily achieved. Mr Dunne said he agreed the planning application lodged by Mr Gannon should proceed.

The hearing continues today.