A property developer handed over two cheques for €100,000 as part of what he called an “option to buy” agreement for certain land but he did not regard it as the same as a contract to purchase, the High Court heard.
Tom Doran (63), a London-based Mayo-born roofer and builder who made his fortune in England and later became a well-know racehorse owner, told the court he gave the money to Michael and Maire Rooney in 2007 to show them he was committed to buying 30 acres they owned at Irishtown, Mullingar, Co Westmeath.
Mr Doran said he had created the option to buy document to protect himself from being gazumped, having already verbally agreed with the Rooneys to buy the land for €3 million.
He also had a conversation with his solicitor at the time by phone on the way to see the Rooneys and told his solicitor that he had an agreement for exchange of contracts as soon as possible. He said the solicitor said to him “that is not a contract” and it was fine to sign it.
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Mr Doran was giving evidence in an action by AIB and Everyday Finance over a loan AIB gave him to buy the Mullingar land in 2007 and an adjoining parcel of 22.5 acres the previous year. He was unable to repay the €3.7 million loans and the plaintiffs sought judgment against him.
He had hoped to get planning permission for a residential development on the 30 acres and Mr Rooney had assured him there was access through that estate to the 30 acres.
However, he later discovered the property was landlocked which meant it was worth only a fraction of what he paid.
He has, in a counterclaim, alleged that AIB falsely claimed to have obtained an independent valuation on the land prior to the drawdown of the loans and that the reports they had were forged. The claims are denied.
He said that while he did not see the valuation before handing over the €100,000, he was assured the valuation report had been carried out and that he would get a €3 million loan.
That assurance, he said, came from Sharon Scanlon, who worked for AIB in Mullingar and was a daughter of his longtime friend and someone he considered to be “like a brother”, Tom Scanlon.
It was Tom Scanlon, he said, who introduced him to the Rooneys, as Mr Scanlon was well known and very popular around Mullingar. He said he was “closer than close” to Mr Scanlon and they would regularly go to race meetings together and they also co-owned horses.
Under examination on the first day of the hearing by his own counsel, David Conlan Smyth SC, Mr Doran said that after a successful business life in England his wife Sally Kelly wanted to move to Ireland and Tom Scanlon introduced him to the owner of farmland at Annagh, Clonard, near Mullingar and near the Scanlon home.
He said he had the cash to pay the €350,000 to purchase the land but, during the after-party at Sharon Scanlon’s wedding in 2004, Sharon advised him “not to be so foolish” because the cheapest way to finance it was through a loan.
Although he obtained planning permission for a large home in Annagh, his wife was “too nervous to move” because the property was “down a cul-de-sac”.
He was then introduced to the 22 acres in Irishtown, farmland also owned by the Rooneys, which he thought might become very valuable due to the fact that there was talk about the dog track in Mullingar moving outside the town.
He also thought he might get permission to build a home for his family there instead of Annagh.
A year later, he was advised by Ms Scanlon that finance could be arranged to buy the adjoining 30 acres for €3 million.
He said Ms Scanlon told him there would be no need for him to get his own valuation report as the bank’s report would do for both of them, a claim which is strongly denied.
After agreeing with the Rooneys to buy the 30 acres for €3 million, he returned to them a week later, in the company of Tom Scanlon, and put to them what he called an “option-to-buy” document that he had drawn up himself in London.
Asked by Mr Justice Garret Simons why he, as an experienced businessman did not get his own valuation, he said because the contract contained a special condition that the valuation had to be carried out.
The case continues.
