The High Court has ordered that some €11.3 million must be paid by Patrick Cox jnr and a company in a dispute alleging concealment and competition by Mr Cox when he worked for developer Michael O’Flynn’s group.
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 the 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 judge said he intends to make an order that Mr Cox jnr and Rockford pay the five plaintiff firms the €11.3 million, together with yet-to-be-calculated interest. This will be dealt with when the case returns next month.
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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 Patrick 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.
It was alleged that Mr Cox actively competed with the plaintiffs and concealed and diverted significant investment opportunities for his own benefit or for the benefit of the other defendants.
It was further alleged Mr Cox appropriated or failed to return and used a substantial amount of confidential documentation relating to the business of the O’Flynn Group. It was claimed that information may have been used to benefit the personal defendants and defendant companies of which they were ultimate beneficial owners.
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.
Mr Justice Quinn said the opportunity for this development came to Mr Cox jnr in 2014, when he was employed in what was described by the plaintiffs as a “senior and trusted position” in the O’Flynn Group. He was also providing services to non-group companies, including VHML and others.
The defendants denied they owed any contractual or other duties. Mr Cox jnr said he was only employed by the O’Flynn Group, of which not all the plaintiffs were members.
He also said his relationship with the plaintiffs was never more than that of a consultant and he was paid consultancy fees.
Mr Cox jnr said he was employed by another company, Tiger Developments Ltd, to undertake on his own account commercial property development in Dublin and that he had the consent of John Nesbitt, managing director of Tiger and long time business friend of Mr O’Flynn, to do so.
The judge said the defendants admitted that documents were taken by Mr Cox and circulated among them but said that, with certain exceptions, the documents were not confidential and were not used or required by them to undertake the Gardiner Street development.
Among their other claims, the defendants also said the plaintiffs had sought to mislead the court about the circumstances in which the plaintiff companies were established, the relationship between the plaintiffs and the O’Flynn Group, and other important facts.
It was claimed that in their presentation, the plaintiffs relied on fabricated and false evidence.
In his judgment, Mr Justice Quinn found Mr Cox jnr was a fiduciary of the plaintiffs.
In breach of fiduciary duties he concealed from the plaintiffs the opportunity to develop the Gardiner Street scheme and diverted its profits to himself and his co-defendants, he said.
He also found that in taking documents and information of the plaintiffs without their consent, retaining them for a year after his resignation from the O’Flynn Group and returning them when called on to do so, Mr Cox acted in breach of his fiduciary duties.
The plaintiffs did not act illegally or fraudulently in the transaction for the sale of sites at Birmingham and Coventry in England, or otherwise, he said.
They also did not mislead the court or give false or fabricated evidence, he said.
In a statement, Michael O’Flynn said: “This was a hugely important case for me with trust and integrity at the heart of it. These are core values to me and the O’Flynn Group and I am clearly very pleased with the Court’s judgment.”
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