Mahon Tribunal: Solicitor Mr John Caldwell has denied any "plot or conspiracy" to prevent a developer, Mr Michael Bailey, from buying land in west Dublin.
Mr Caldwell acknowledged that Mr Bailey made the best offer for land at Coolamber near Lucan, which he says was owned by former Fianna Fáil TD Mr Liam Lawlor and businessman Mr Jim Kennedy.
But he said the deal with Mr Bailey "just died" because the developer's solicitor was worried about the financial guarantee his client was offering.
Shortly after, the land was sold to a rival developer, Mr Joe Tiernan, who later had it rezoned and built 500 houses on the property.
Mr Caldwell, who acted as solicitor to the vendors, said Mr Kennedy "pushed too hard" with Mr Bailey on the guarantees and "lost the deal" as a result.
Mr Des O'Neill SC, for the tribunal, said that in autumn 1989 negotiations with Mr Bailey were "further on" than with Mr Tiernan.
A draft contract had been sent to Mr Bailey's company, Princess Homes, and a £30,000 deposit cheque had been signed.
Mr Bailey offered to buy the land for £2.05 million, offered a personal guarantee for £300,000 and a company guarantee for the rest of this sum.
Mr O'Neill said these were very strong guarantees, and effectively meant Mr Bailey was taking on the entire risk in the transaction.
Mr Tiernan offered £2.2 million but as counsel said, his only exposure was an £110,000 deposit and he was not putting any assets into the transaction.
Mr Caldwell agreed the two offers were "chalk and cheese" and that Mr Bailey had provided "very onerous" guarantees.
Mr Bailey's solicitor, Mr Kevin Smyth, however, was "very unhappy" about the personal guarantee, the witness said. It was these concerns that "stopped the transaction dead" at this point.
Mr O'Neill said it was probable, given the documentation available, that the vendor ended the relationship with Mr Bailey. Mr Caldwell rejected this, saying Mr Smyth had decided the deal was "too big a risk" for his client.
He told counsel he had no recollection of Mr Lawlor and Mr Kennedy telling him they had decided to go with Mr Tiernan.
"There was no plot or conspiracy in relation to this; the deal just died," he explained.
Mr O'Neill pointed out that Mr Caldwell had represented Mr Tiernan some years previously. Arising from this, Mr Tiernan along with others involved in the Financial Indemnity Company of Ireland (FICOIL) had made a substantial tax settlement with the Revenue Commissioners.
Mr Caldwell said his client had made a reasonably good tax settlement and his financial standing was satisfactory. Investors in FICOIL were better off than they would have been had they not been involved in the first place.
