A BUSINESSMAN has told the High Court his Dublin hotel was “in bits” and “completely destroyed inside” some two years after Allied Irish Banks appointed a receiver and closed the hotel.
Darragh Heagney claims the former Baily Court Hotel, Main Street, Howth, Co Dublin, was in perfect condition when AIB appointed a receiver in 2009 but it has since been vandalised and damaged.
In proceedings before the president of the High Court, Mr Justice Nicholas Kearns, AIB contends Mr Heagney, St Peter’s Terrace, Howth, Co Dublin, is liable for a total sum of €2.4 million under three guarantees in 2005 and 2007 for banking facilities to a number of companies. The bank demanded payment in February 2009.
Mr Heagney claims the hotel, to which a receiver was appointed by AIB in 2009, has deteriorated to such an extent it is worthless on the open market. He claims he is entitled to an allowance or set-off against the liability on the guarantee on grounds including AIB allegedly failed to provide the receiver with adequate funds to maintain and repair the premises.
The bank failed to secure adequately or at all the hotel premises and caused the water supply to be stopped or cut off causing a total failure of heating, he claims. It is alleged extreme dampness, mould and fungal growth have contributed to deterioration of the building.
He has also alleged the bank failed to ensure trespassers did not break into the hotel and commit acts of vandalism, damage and theft. He has further alleged the bank allowed the public house and hotel licence and off-licence attached to the premises to lapse.
In evidence, Mr Heagney said he had bought the hotel in 2003 for over €3 million and had renovated it to a very high standard. He said the hotel did well initially but suffered with the economic downturn leading to it opening only for weekends in 2009.
The receiver took over the hotel in June 2009 when, Mr Heagney said, the premises was in good condition and the beds were made. After the receiver took over, people were constantly breaking in and the alarm was constantly going off. He told the court he had inspected the building in December last year and there were holes through the main roof where he could see the sky. “It is in bits. It is completely destroyed inside,” he said.
Cross-examined by Martin Hayden SC, for AIB, Mr Heagney agreed the overall indebtedness to the bank by the companies was €7 million.
Gerard Hand, an architect who inspected the building, said people appeared to have been living in some of the bedrooms. Furniture had been destroyed and there was a “squatters’ nest” in one room. It would cost up to €1.5 million to take it to its previous standard, he said. The hearing continues.