ARCHITECT BRIAN Murphy-O’Connor and a businessman are suing two other businessmen for some €8.5 million over alleged default of a settlement relating to an investment development in Cape Verde on lands valued at €81 million.
The action by Mr Murphy-O’Connor, Greybrook, Waterfall, Cork, and William Edward (Ted) Whitaker, Summer Cove, Kinsale, Co Cork, is against Thomas Sheehy, Seaview House, Scartagh, Clonakilty, who is said to be in Portugal, and John Cahillane, of Keel, Castlemaine, Co Kerry.
The proceedings were admitted yesterday by Mr Justice Peter Kelly to the Commercial Court.
The plaintiffs claim the defendants owe some €8.5 million under a written settlement agreement of December 14th, 2007, made between the sides of a High Court dispute over an agreement of December 2005 for the acquisition and development of 150 hectares of lands on Cape Verde.
It is claimed the matter is of significant commercial importance to the plaintiffs’ business, having regard to the amount jointly invested by them in connection with the project and the value of the lands, estimated in 2007 as €81 million.
It is claimed, under an agreement of December 8th, 2005, that the parties agreed the lands would be held by a Cape Verde company, Murdeira Beach Resort 1 SA and that 80 per cent of which would in turn be held by a Madeira company, Madeira Beach Developments Lda.
It is claimed it was agreed the parties would each hold 25 per cent of the shareholding in the Madeira company while the 20 per cent shareholding in the Cape Verde company would be held by a local landowner.
The December agreement was later amended in circumstances where the defendants acquired further lands, in return for which their shareholding in the Cape Verde company was diluted and the local landowner’s shareholding was increased to 33.4 per cent.
In an affidavit, Mr Murphy-O’Connor said there was a breakdown in the commercial relationship between the parties over the next 18 months and this led to High Court proceedings by the plaintiffs against Mr Sheehy.
The sides had agreed to mediation in that case leading to the settlement of December 2007.
Under the settlement, the defendants were to pay some €11.3 million in three separate tranches beginning in March 2008 but, it is claimed, they failed to pay the first tranche as agreed and instead made payments of that tranche in five separate instalments up to May 2008.
The defendants had failed to pay the second tranche, due in October last, it is claimed. Where the defendants failed to make repayments on the agreed dates, the full sum would become due and owing and some €8.5 million was now due as a result.
Mr Murphy-O’Connor said it appeared Mr Sheehy was abroad and it was not known when he would return. He added he had conversations with Mr Cahillane between January and March last concerning the funds due, but some €8.5 million remained due and owing.
Counsel for Mr Cahillane said his client would be claiming entitlement to set off the transfer of the ownership of his interest in the Madeira company against any liabilities. There was no valuation on that shareholding as yet, counsel added.
Mr Sheehy had also communicated his consent to the case being transferred to the Commercial Court.
