Mr Michael Bailey, who had bought lands for £2.3 million from JMSE, then offered a half-share worth £8 million on the development to Mr Joseph Murphy jnr, the tribunal was told.
Mr James Gogarty said Mr Joe Murphy snr had accepted they would go ahead with a quick sale to Baileys of the lands of over 700 acres in north county Dublin for £2.3 million. This was accepted in a letter in November 1989 by Duffy Mangan Butler, auctioneers, subject to a deposit of £230,000.
Mr John Gallagher SC, for the tribunal, asked if Mr Gogarty recalled the sale being concluded and agreement being reached.
Mr Gogarty said he had a fair recollection. The deposit was paid, he thought, and hands shaken on the deal. The sale was to be completed within four months but was not because of a house on the Poppintree lot which was destroyed by fire and vandalism and the purchasers could not get vacant possession.
Mr Gallagher said the contract was signed on December 19th, 1989, with a closing date of April 30th, 1990.
Mr Gogarty said Mr Frank Reynolds came into it fairly actively then. He was physically responsible for security of the premises. There was a problem of liability for damage under the insurance. The sale was not closed for a few years after that. The dispute with the vendors involved the Murphys senior and junior. Mr Gogarty said it was evident to him there were sour grapes, with Mr Murphy jnr having lost control over any potential in the lands.
Witness said he had no control over the lands then. He was only acting as a consultant. Mr Murphy jnr felt there was a breach of contract over the liability issue and opinion was sought from a senior counsel.
"He was then a senior counsel. He was a judge later on, a well-known judge, and that was Mr [Brian] McCracken, now, he was the senior counsel," said Mr Gogarty.
Mr Gogarty said Mr Murphy snr got another opinion from another senior counsel, who concurred with Mr McCracken. What happened as a result was that Mr Murphy jnr and Mr Frank Reynolds decided to try to get a compromise with Mr Bailey and organised a meeting in the Swiss Cottage pub and restaurant in Santry, Dublin, at the end of July 1990.
Mr Reynolds drove Mr Murphy jnr and himself there. Mr Michael Bailey and Mr Thomas Bailey were there. They produced a big roll of drawings and laid them on the table. It showed projected developments on the lands.
"And Mr Michael Bailey says to Junior: `You can have a half share in this development for £8 million.' So the value of the lands had jumped from £2.3 million to the £16 million with no rezoning," Mr Gogarty said.
Mr Murphy jnr was shocked and said he could not go along with that. He would have to talk to his father.
Mr Colm Allen, for the Baileys and Bovale Ltd, said the witness had indicated the value of the lands had risen to £16 million. He wanted to make it clear the offer was for 50 per cent of the proposed development.