Developer Greg Kavanagh sued by brother in High Court

Rossa Fanning, for Bernard Kavanagh, otherwise known as Hugh Kavanagh, told Ms Justice Deirdre Murphy on Tuesday it was an “unfortunate” and urgent commercial dispute. Relations between the brothers had deteriorated in recent times and the matter was urgent because his client learned just last Thursday of his “clearly unlawful” removal as a director of 19 companies, he said. 

In broad terms, Greg Kavanagh was seen as the “front of house” of the business while Hugh Kavanagh had a hands-on role in terms of actual building work and development activity, Mr Fanning said. Hugh Kavanagh estimated the net value of Structured Marshalled Investments Ltd (SMIL), the main holding company for the business, was some €35 million, the court heard. 

Ms Justice Murphy agreed the matter was urgent, gave counsel leave to serve short notice of the proceedings on the defendants and returned the matter to Friday. The proceedings are by Hugh Kavanagh and Simlur Ltd, a company of which Hugh Kavanagh is owner and sole director, against Greg Kavanagh and 20 companies, including SMIL, New Generation Homes Ltd and Isotonic Hotel Ltd. 

Hugh Kavanagh claims he has been removed as a director of 19 of the 20 defendant companies but has not been removed as a director of one defendant firm, Bezzu Corporation Ltd. In court documents, he said he had operated a property and construction business with Greg, his younger brother, for 17 years and they had worked closely together to build up a very successful business. 

Up until about six weeks ago, they had had a very close personal relationship as brothers, each were best man at the other’s wedding and Greg was godfather to two of his three children, Mr Kavanagh said. One investor in some of the projects “described us as being like Siamese twins”, he said. 

He said important decisions were made jointly and it was always agreed they owned the business equally. He said this was formalised in 2018 when 50 per cent of the shares in SMIL, the main holding company for the business, were transferred to his (plaintiff’s) holding company, Simlur. 

In recent months, his relationship with Greg has deteriorated, he said. His brother now asserted he, Hugh, has no ownership interest in SMIL or other group companies and had purported to remove him as director of 19 of those, with no notice whatsoever and in a manner which, he was advised, was “clearly unlawful”. 

In the circumstances, he had no alternative except to bring proceedings in which, inter alia, he would be seeking various injunctions, pending trial, preventing his removal as a director of the companies, permitting him continue to participate in managing the business, and ensuring the value of his stake in the business is not diluted. 

He was not bringing these proceedings lightly and believed he had been left with “no other option”, Mr Kavanagh said. The break-up of his relationship with his brother “has caused me immense personal grief and distress”, he said. “We started out together in 2004 and from then on had shared everything. There was never a need to formally document our agreement, it was simply entirely natural. He always had my back and I always had his.”