Hotel group seeks €4m damages for losses arising from failed Dublin scheme

A company that planned to develop a seven-storey aparthotel in James Street, Dublin, claims the previous owners owes it €4 million as damages for losses.

The losses are due to alleged negligent misrepresentation when the former owners allegedly failed to disclose a problem over the “right to light” of an adjoining property, the Commercial Court heard.

James Street Hotel Ltd (JSHL), a subsidiary of the Dublin Loft Co Ltd, is suing Mullins Investments Ltd, the previous freehold owner of the site which got the aparthotel planning permission in 2018 before JSHL bought it.

It has also sued Mullins Investments director Peter Mullins of Raffles Place, Singapore and a company involved in the sub-sale of the property, Delbourne Ltd, now in liquidation.

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It is also suing former Delbourne directors and contributories: Eoghan Kearney of Old Adelaide Road, Glenageary, Co Dublin; Liam Foley of Church Hill, Leamlara, Co Cork; Patrick Cox, of Prince Edward Terrace Lower, Blackrock, Co Dublin; and Simon Fox of Southern Road, London.

JSHL bought the property at 180-184 James Street from Delbourne for €7.2 million in March 2019.

Adjoining landowners

It claims that, in replies and requisitions before the sale, Mullins Investments and Delbourne said to their knowledge there were no disputes with any adjoining landowners.

However, the owners of the neighbouring property, Tathony Holdings, brought legal proceedings against JSHL in October 2019 claiming their light would be interfered with by the hotel development. That case was settled on the basis that a new planning application would be submitted.

However, permission was refused and because of the combined effects of delay caused by the right-to-light proceedings and the failure of the new planning application, JSHL sold the site last May for €5.25 million.

It is now seeking just more than €4 million, including an alleged €1.95 million loss on re-sale, from the defendants.

It is seeking restitution and/or return of the money received by the defendants from the purchase price. It is also seeking an order that any contributory to Delbourne pay or account to the liquidator of Delbourne for such sums as the liquidator may direct to satisfy any liability to JSHL.

The case was admitted to fast track Commercial Court on Monday by Mr Justice Denis McDonald, who rejected arguments on behalf of the defendants against admission.