Three Co Donegal women have failed in an attempt to prevent Bord Fáilte proceeding with a fraud claim against them and others arising from an International Fund for Ireland (IFI) grant of €83,000 for a "multi-activity tourist centre" being instead allegedly used to build a private house.
The grant was paid in 1993. Bord Fáilte began the action in 1997 against Castlefinn Multi-Activity Holiday Centre Ltd, Catherine Doherty and her estranged husband Daniel Doherty; their daughters Siobhán Doherty and Paula Mary Doherty (who are being sued in their capacity as registered owners of certain lands); and Seán McGlynn (practising as Seán McGlynn & Co).
Mr Justice Daniel Herbert yesterday noted that Bord Fáilte claims Mr and Mrs Doherty fraudulently warranted and represented that the tourist centre was entitled to be grant aided when this was "a sham" and that some or all of the defendants had conspired to deceive the board into making a grant. It claims Mr McGlynn had issued a certificate of good marketable title to certain lands knowing Bord Fáilte would rely on that. It claims the building was not built on lands transferred to the company.
Bord Fáilte had brought earlier proceedings against the first five defendants in 1995 seeking an order for possession of certain lands in Co Donegal following a registered charge of December 19th, 1994 to secure the repayment to Bord Fáilte, as IFI administrator, of a grant of €82,467.
That case was adjourned in November 1996 to allow the later proceedings (the 1997 action) be brought. In the 1997 claim, the board has alleged fraud, deceit, conversion, negligent misrepresentation and breach of contract over events between August 1992 and December 1994. Catherine Doherty and her daughters brought a motion before Mr Justice Herbert last month to dismiss the action for delay, want of prosection and failure to reply to a 1998 notice for particulars.
In his reserved judgment, the judge noted Ms Doherty had delivered no defence. She had said in an affidavit the grant was given to the company and not to her. She also said she acted throughout the transaction as an agent of the company of which her husband was the principal mover. She also denied the allegations of fraud and conversion. The judge noted Mr Doherty had argued that a registered charge over the lands executed on December 19th, 1994 in favour of Bord Fáilte was void because his daughters were minors then.
Refusing the application to halt the action, the judge held the capacity of Ms Doherty and her daughters to conduct a full and proper defence had not been prejudiced by delay in advancing the case or by fading memories.
The judge said the IFI was set up by the Irish and British governments in 1986 to assist approved projects in disadvantaged areas of the State and Northern Ireland.
Bord Fáilte was therefore almost a trustee with respect to those funds and the court should be very slow to strike out any action by it for the recovery of grant aids alleged to have been improperly obtained or applied.
In the absence of any prejudice to Ms Doherty and her daughters, the balance of justice was overwhelmingly in favour of the action being permitted to continue, he said.