Developer denies attempt to defraud or hoodwink investor in houses

Monaco-based Canadian businessman Louis Trudel has claimed he may have been the victim of "some kind of fraud" in relation to funding of a planned housing development in Waterford.
Developer denies attempt to defraud or hoodwink investor in houses

Aodhan O'Faolain

A developer has claimed in reply to a High Court action that there has been no attempt to "defraud or hoodwink" a businessman.

Monaco-based Canadian businessman Louis Trudel has claimed he may have been the victim of "some kind of fraud" in relation to funding of a planned housing development in Waterford.

Neil Gray, a director of Carray Homes Unlimited Co, says however that proceedings brought by Mr Trudel against Carray and against another Carray director, Darren Carroll, "have been contrived mischievously" and presented to court in a less than candid manner.

Last month, Mr Trudel's lawyers secured a temporary High Court freezing order preventing the defendants from reducing or dissipating their assets below a value of €250,000.

Mr Trudel claimed that last February he advanced two loans totalling €1.2million to Carray Homes to fund the building of 25 houses and six apartments at lands at Adamstown, Kilmeaden in Co Waterford.

He claimed Carray director Darren Carroll, of Green Street, Wexford, acted as guarantor for the loans which were to be repaid within 12 months at an interest rate of 30pc per annum.

Mr Trudel, who is the CEO of Monaco based construction and development company, TTMG International SARL, claims he was told by the defendants that when built the properties would be sold to Waterford County Council.

One of the two loans was €300,000 to be used by Carray Homes to show the council that the firm had cash on account and for working capital. The second €900,000 loan was to be used to acquire the development land, he claimed.

Mr Trudel said he became concerned when Carray Homes provided a progress report on the development. Aerial photographs of the site that were provided did not seem genuine, looked distorted, and appeared to have been digitally manipulated or falsified, Mr Trudel said.

Mr Trudel sent a colleague to Waterford to inspect the site in late March and take aerial photographs of the development. Mr Trudel said the pictures confirmed that the images in the progress report had been "falsified", and "were grossly misleading" as to the extent of the works carried out on the development.

Letters of demand seeking the full repayment of the loans were issued, he said.

Following discussions between the parties' lawyers, it was agreed that Carray Homes would repay the first tranche of €300,000, and a stay was placed on the outstanding amount for several weeks to allow the defendants time to seek alternative financing.

While €50,000 has been paid to the plaintiff by the defendants, the outstanding €250,000 of the agreed initial repayment has not been transferred, it is claimed.

Mr Trudel sought freezing orders and an order for judgment of €1.28m against the defendants.

In a replying affidavit to Mr Trudel's claims, Mr Gray, of College Farm Wood, Newbridge, Co Kildare, said Mr Trudel had presented facts which created the impression that he (Trudel) was in imminent danger of suffering irreparable loss and that the defendants had conducted their dealings in a dishonest manner and engaged in subterfuge and misrepresentation in an attempt to defraud him.

There had been no attempt to defraud or hoodwink, he said.

The progress report provided by another individual to Mr Trudel was of a site in Celbridge, Co Kildare, as an example of the type of work Carry Homes does, he said.

It was not intended to be given to Mr Trudel "much less to represent the state of the site in Waterford".

It was not intended that progress reports would be provided to Mr Trudel until the council confirmed it would purchase the constructed dwellings which the council last week provisionally agreed to do for €9m, he said.

There will be six months work on the site to complete the units and then there will be sufficient funds available to repay Mr Trudel plus interest, he said.

On Monday, Patrick McCullough BL, for Mr Trudel, applied to have the case admitted to the fast-track Commercial Court list as it met the €1m threshold for admission.

Tim Dixon BL, for the defendants, opposed the application saying it was not an urgent matter and his clients viewed it as “ a vexatious set of proceedings.” The amount in dispute at the moment is €250,000 as the remainder of the loan was secured on the building site, he said.

The judge was satisfied the case met the criteria for admission to the commercial list. A hearing over whether the freezing injunction should continue until the hearing of the full case was set for July.

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