'Slovenly' business deals criticised

A HIGH COURT judge has said he “never ceases to be surprised at the slovenly way business involving millions of euro is transacted in this country”.

Mr Justice Peter Kelly, who supervises the operation of the Commercial Court, was dealing yesterday with a row between two companies arising from an €8.3 million development contract in Tralee, Co Kerry.

His comments follow similar criticisms by him in cases where multi-million business deals and bank loans have been grounded on defective contracts or relatively small deposits, including one case where a €19 million development loan was granted by a bank on a deposit of €100.

Yesterday’s case was brought by Páidí O’Shea Construction Ltd (POC) against Lee Strand Construction Development Ltd (LSCD) for summary judgment for €1.4 million alleged outstanding fees for construction of the Centre Point building at Edward Street, Tralee.

POC alleged it was hired by LSCD to carry out the development and had completed it to a satisfactory standard but was waiting two years for final payment. LSCD argued POC was not entitled to judgment in the sum sought.

Mr Justice Kelly said the contract was not between the plaintiff and defendant companies at all but between Mr O’Shea and the defendant. It also appeared the parties “simply ignored” certain provisions of the contract, including that an architect should issue certificates grounding payments, and instead entered a “huckster shop”-type arrangement in relation to interim payments. The “certificates” in this case had no legal status.

The judge said the most sensible course to adopt would be for the sides to have all matters dealt with either by the court, by arbitration or, most ideally, by mediation.