Businessman Pat Cox jnr and his firm are to seek a stay, pending appeal, of a High Court order for them to pay €11.3 million over a dispute alleging concealment by Mr Cox jnr when he worked for developer Michael O’Flynn’s group.
In November, Mr Justice Michael Quinn found that Mr Cox and his Rockford Advisors Ltd firm hold €11.3 million in profits from a student accommodation development in Dublin on trust for O’Flynn Capital Partners and four other companies.
Mr Cox jnr is son of former MEP Pat Cox who provided a consultancy service, along with his son, for the O’Flynn Group between 2007 and 2009.
The dispute centred on a student accommodation development in Gardiner Street, Dublin, which was completed in 2017 and earned profits after tax of €11.33 million.
The case was brought by Victoria Hall Management Ltd (VHML), Palm Tree Ltd, Grey Willow Ltd, Albert Project Management Ltd, O’Flynn Capital Partners and O’Flynn Construction (Cork).
It was against Mr Cox jnr, Rockford, Liam Foley, Foley Project Management Ltd, Eoghan Kearney, Carrowmore Property Ltd, Carrowmore Property Gardiner Ltd and Carrowmore Property Gloucester Ltd.
VHML and the five other plaintiff property development companies claimed that Mr Cox jnr, Mr Foley and Mr Kearney, also former O’Flynn Group employees, had acted in breach of their respective contracts of employment and in breach of other duties.
The judge found no cause of action had been made out against Mr Kearney and Mr Foley or against the Foley and Carrowmore companies.
The judge put the case back for the making of formal orders and to deal with costs.
In a follow-up judgment on Wednesday, the judge said he had been informed that the defendants intend to apply for a stay pending an appeal over his November judgment. He said that the matter will be listed before him again in a week.
He said he had held that Mr Cox jnr, in breach of fiduciary duty, had concealed from the plaintiffs the Gardiner Street scheme and diverted it and its profits to himself and his co-defendants.
For this breach, the remedy will be that, for profits received by him or to which he is entitled, he must account as a trustee to the plaintiffs.
The judge said he also held that to the extent Mr Cox jnr does not or is not entitled to receive those profits, the remedy will be damages.
That means, he said, that orders will be made against the Carrowmore defendants insofar as may be required to give effect to orders against Mr Cox jnr and Rockford.
That is they must account for so much of the profits as represent the profits of Mr Cox jnr and Rockford, he said.
To the extent that the full amount of €11.33 million is not recovered by this remedy, Mr Cox jnr’s liability for the balance of the diverted profits will also be in damages, he said.
Having regard to his conclusions relating to the Carrowmore defendants, and to certain legal principles, the judge made a declaration that the Carrowmore defendants hold the profits of the Gardiner Street scheme as trustees for Mr Cox jnr, Rockford, Mr Foley, Foley Project Management and Mr Kearney.
The judge also made certain costs orders following consideration of submissions by the parties.
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