A property developer, Mr Cathal Kelly, has taken High Court proceedings against Dublin businessman and declared bankrupt Matt Kelly, a former director of Kelly's Carpetdrome (in liquidation). Mr Cathal Kelly claims he holds an unspecified interest in several properties Matt Kelly claims to own.
Mr Cathal Kelly told the court yesterday an accountant, Mr John McGrattan, managed a substantial amount of his money, which was used to buy properties. Mr McGrattan paid the money to Matt Kelly. He did not know how much because he had trusted Mr McGrattan like a brother.
Mr Kelly said that when he raised matters with Mr McGrattan, he was told to "f--- off" and stay quiet. He had then asked for an account of money Mr Kelly had given Mr McGrattan and paid out on his behalf. Mr McGrattan told him he - Mr Kelly - had no paperwork and that he, Mr McGrattan, could produce paperwork. He had not taken proceedings until now because "threats were passed onto me and I took them very seriously".
Mr Kelly confirmed he had instituted proceedings against Mr McGrattan as well as Matt Kelly. He said he was destitute. Mr McGrattan has denied Mr Kelly's claims.
Mr Kelly's action against Matt Kelly was before Mr Justice Smyth yesterday via a motion by Matt Kelly to dismiss it for failure to disclose any reasonable cause of action. Matt Kelly has denied Mr Kelly's claims.
Mr James Salafia SC, for Matt Kelly, cross-examined Cathal Kelly about an affidavit he had made in the case. He said officers of the Criminal Assets Bureau (CAB) had in October 2002 shown him a waiver form - waiving claims to properties - bearing the signature Cathal Kelly and asked him had he signed it. He said it was not his signature and gave the officers a sample of his signature.
He said solicitor Mr Derek Stewart, Mr McGrattan, the latter's wife Ms Gabrielle Wolfe, (also a solicitor) were "all in this together and I was the fool". The Supreme Court was told last October that a €3.6 million deal for Matt Kelly to settle his tax affairs with the Revenue had broken down. An appeal by the liquidator of Kelly's Carpetdrome in a bankruptcy matter involving Matt Kelly comes before the Supreme Court later this month.
Mr Salafia said yesterday that CAB believed that, because of the problem with the waiver form, the deal with Matt Kelly to settle his affairs was off.
Mr Kelly said that when the CAB officers showed him the waiver form, they said they had other documents with his signature and the signatures did not correspond with Cathal Kelly's signature. They also asked him about properties and he had given an account of these, which was set out in his affidavit in his own proceedings.
After the CAB visit, he had gone to a solicitor and instructed him to take proceedings against Matt Kelly.
Mr Kelly said the background to the matter was that he was involved with Mr McGrattan who was "supposedly my partner". Mr McGrattan also knew Matt Kelly and had done a lot of work for him. Mr McGrattan introduced Mr Kelly to Matt Kelly and the two men went to look at properties in early 1997.
They were discussing the purchase of some of these. Mr Kelly said he thought some properties, including eight apartments in Buckingham Village, Dublin, would be a bad investment.
Mr Kelly said they "did a deal" on a company, Armada Developments, and the arrangement was to split the deal afterwards. Mr Kelly said Matt Kelly had said the apartments were registered in the name of solicitor Derek Stewart but they were Matt Kelly's property and would be included. Another property on the North Circular Road was also in Derek Stewart's name but this was also Matt Kelly's and these would be included in Armada, he said. Mr Kelly said he had agreed with Mr McGrattan to buy Armada as the latter said this was the most efficient way to do the deal. The price agreed for the properties was £1.5 million.
Mr Kelly said John McGrattan paid money to Matt Kelly. He said Mr McGrattan controlled all his finances and paperwork. Ms Gabrielle Wolfe looked after the legal work and Mr McGrattan did the accountancy work. Mr Kelly said Mr McGrattan had all of his (Cathal Kelly's) money in accounts and Mr McGrattan controlled these.
The hearing continues today.
