IN THE COURTS:AMONGST THE myriad of matters arising from the collapse of the property market is the consequence for people who entered deals on a personal basis rather than through a corporate vehicle.

This issue came to public attention earlier this month when Irish Nationwide took a case seeking the payment of €60 million from property developer Liam Carroll, based on a personal guarantee made during dealings in Tallaght.

If you buy and sell something, you pay 20 per cent capital gains tax on the profits.

If your company does the same, it pays 12.5 per cent corporation tax on the profits, and you pay income tax on your income from the company.

In the Commercial Court yesterday, there was a case involving William Ennis, of Leopardstown Avenue, Blackrock, Co Dublin and defendants Vincent Maguire, Heathcliffe House, The Folly, Old Town, Co Dublin, and Liam Moran, St Ives, Malahide, Co Dublin.

Maguire and Moran are the owners of Walsh Maguire Co Ltd, which went into liquidation in February.

They are also directors of the company.

The issue before the court had to do with the amount of VAT that would accompany a €6.75 million judgment already made by Mr Justice Peter Kelly against Moran. The matter was put back for a week.

A judgment of €8.4 million has already been made against Maguire.

The judgments arise from agreements made between Ennis, on the one hand, and the two Walsh Maguire directors on the other hand, in February 2007. The two sides entered into a management agreement and a put and call option agreement concerning a site on Church Street, close to the Four Courts complex.

Maguire and Moran agreed to secure planning permission for an office development, source funding for the development, develop the site, and organise tenants. There was also a clause involving monthly payments of €45,833 to Ennis, owner of the site.

It was agreed that Walsh Maguire would be the building contractor, as long as there was no change in the control of the company. The parties also agreed that there would be a fixed price lump sum building contract.

In February of this year, Ennis wrote to the two directors at their company’s address. The monthly payments due to him had stopped and he was going to exercise his put option. On March 19th, Moran responded expressing his surprise, and saying any court application would be “strenuously defended”. Four days later Walsh Maguire went into liquidation.

The payments to Ennis had stopped in August 2008. A report produced earlier this year on the project found that Maguire and Moran had managed to secure planning permission for the development but the funding had not been secured in the prescribed period thereafter, and it did not appear now to be likely it would become available.

The motive for seeking a speedy judgment through the Commercial Court was in part prompted by a judgment secured in the court against the same defendants in May by different plaintiffs.

Moran, in a response to the case taken by Ennis, had said it was an implied term of the agreement with Ennis that everyone would act in “good faith” and not seek to “unjustly enrich themselves by engaging in contractural opportunistic behaviour”.

He said Ennis knew it was because of the “unavoidable financial catastrophe that prevented developers in general from fulfilling their legal objectives that the [Church Street] development contract could not be fulfilled”.

It was obviously not an argument that prevented Mr Justice Kelly from making his earlier judgment.

The second case before Mr Justice Kelly yesterday involved two corporate entities, John Sisk Son Ltd, and Mulveys Gift Shop Ltd. The latter has an address on Main Street Carrick-on-Shannon.

Sisk entered into an agreement with Mulvey in November 2006 for the provision of a three-storey mixed development “unit shell and core works” with car parking.

The price in the agreement was €9.8 million and the work was to be on a site in Carrick-on-Shannon owned by Mulveys Gift Shop Ltd.

The final sum for the work was €12 million plus VAT but the defendants have only paid €11.14 million to date. Sisk went to court seeking the remainder.

The court heard yesterday that settlement negotiations which were to have occurred “went nowhere” with counsel for Mulveys saying the financial institution involved was “inflexible”.

Mr Justice Kelly said it wasn’t Sisk’s fault and he put the case in for hearing on July 31st.

Companies Office filings for Mulveys show an unsatisified mortgage was taken out in February 2007 with Anglo Irish Bank.