A High Court judge has found that Glenkerrin Homes and receivers appointed to it by Nama are legally obliged to ensure that works which could cost some €3 million are carried out to complete to "a satisfactory standard" a "significantly defective" underground car park at Maynooth Business Campus.
As Glenkerrin has no funds to carry out the works, and the receivers are contractually protected from any personal liability, the remedial works must be funded from the €5 million proceeds of sale by the receivers of the last unit in the 55 unit park, Block C/Link Building, which was sold with the benefit of 172 car parking spaces, Mr Justice Robert Haughton said.
The carpark as constructed is structurally defective and in breach of the Building Regulations of 1991/1997, he said. The concrete surface of the carpark (over basement level) was constructed without any thermal expansion joints, rendering it “structurally defective having regard to its size”.
Various defects, including cracks in support columns, had emerged which have rendered the basement carpark “unfit for use” and the underlying structural defect will lead to collapse of the carpark over time.
While commissioning works have been undertaken by the receivers, those do not address the structural defect, he added. He was satisfied the receivers had adopted and benefitted from a 2001 management agreement concerning the 55-unit business park between brothers Ray Grehan and Danny Grehan and Glenkerrin, of which the brothers were directors, with the Maynooth Business Campus Owners management company (MBCO) and cannot now disclaim Glenkerrin's obligations under that agreement.
He also remarked the receivers must have been aware from 2017, based on reports and surveys, there was a structural issue with the car park but they chose to “push through” the sale of Block C/Link Building with works that would allow the basement to be used as a car park in the short term.
Noting the €5 million sale proceeds of BlockC/Link Building are held in an escrow account for the receivers pending the outcome of this case, he said the remedial works must be funded from that. He was giving his 136-page judgment on Friday on proceedings by Ray Grehan and Danny Grehan, Glenkerrin Homes Unlimited Company and receivers Michael McAteer and Paul McCann, of Grant Thornton, against the MBCO.
The judge has adjourned the matter to next month for making final orders. The case concerned the nature of obligations under the 2001 agreement with the core issue being whether the obligation to carry out the works to the car park fell on the plaintiffs or on the management company.
Obligation
Among various findings, the judge said the agreement imposed a legal obligation on Glenkerrin to complete the campus, including carpark, to a standard such that it can be certified in line with general condition 36 of the Law Society General Conditions of Sale. That required completion in "substantial compliance" with planning permission, plans and specifications, the Building Control Act 1990 and Building Regulations under that. That legal obligation is also owed by the receivers who, since their appointment in 2011, have adopted and benefitted from the agreement in successive sales of units and cannot disclaim or repudiate the agreement.
The carpark structural defects are such the campus common areas are not complete and the necessary certification cannot be provided until remedial works are carried out, he held. Having regard to the manner in which the receivers have sought to avoid/dispute their legal obligations before and since this case was taken, he said the process of establishing what remedial works are required, and the carrying out of those works, must be “transparent”. The costs of the works has been estimated at €2.26 million but, with consequential repair works and professional fees, the cost has the potential to exceed €3 million, he noted.
