Gogarty says JMSE went back on deal over payment from the ESB

Mr James Gogarty was told he could keep half of the money recouped from the ESB through negotiations on accounts arrears, the Flood Planning Tribunal heard yesterday.

Giving evidence on financial rewards which he said the Murphy group of companies offered him, Mr Gogarty claimed he met Mr Joe Murphy snr in London in 1989 to discuss Mr Gogarty's pension fund.

He said Mr Murphy was "upset" that it had come to his attention that the ESB owed the company far more than the £40,000 detailed in the Murphy group accounts. Mr Gogarty said it was agreed that any money above the £40,000 recouped by Mr Gogarty would be split equally between himself and James Murphy Structural Engineering.

Mr Gogarty gave evidence that he held meetings with the ESB to explain that JMSE had experienced a change of personnel in recent years and had experienced some difficulty because of this. Mr Gogarty said he then employed a firm of surveyors to work on a billing procedure with him, and he eventually got the ESB to agree to pay £700,000, including VAT, as a full and final settlement for all work carried out by JMSE on the Moneypoint plant.

Mr Gogarty said he had worked on this project from his own home and the files and documents he had brought home to assist him were all returned. He took exception to earlier remarks made by Mr Garrett Cooney SC, for the Murphy group, that "a considerable amount of documents" had been taken with him when he left Murphy group employment.

Mr Gogarty also said that during his meeting in London with Mr Murphy snr, it had been agreed that the company would purchase a £300,000 pension fund for Mr Gogarty's benefit, along with a five-year consultancy contract at his salary, which was then £23,500.

However, when Mr Gogarty attempted to have his arrangement and his pension plans confirmed by Mr Murphy in writing to Mr Gogarty's solicitor, the confirmation was not forthcoming without change, he maintained.

In a letter to Mr Gogarty's solicitor, Mr Gerard Sheedy of McCann Fitzgerald Solicitors, Mr Murphy's solicitor, Mr Christopher Oakley of Pickering Kenyon of London, said Mr Gogarty "will be paid a commission of 50 percent of the nett amount recovered in respect of the claim. This commission shall only be paid in respect of any net offer in excess of that already offered by the ESB."

In further correspondence Mr Murphy's solicitors also amended agreements reached on pension matters. But it was the wording of the commission arrangement which upset him, Mr Gogarty said. In follow-up correspondence Mr Gogarty questioned what was "nett", insisting that costs incurred in recouping the money should be met by the Murphy group as part of its normal business expenses.

Mr Gogarty insisted that the amount originally offered by the ESB was £40,000 and he wanted this written into an agreement drafted by the solicitors.

However, Mr Gogarty eventually agreed to accept that the ESB would have paid £130,000 because, as he told the tribunal: "On advice and on a time-scale to get finished with the bloody thing . . . I said OK, to hell, we will divide what's over £130,000 and that was incorporated into the agreement. I was eating humble pie to try to get out and finish."

According to Mr Gogarty, a letter to the ESB accepting the £700,000 was drafted in September 1989 and signed by him, as well as being initialled by Mr Frank Reynolds, then chief executive of JMSE. "And I discussed it with Frankie and Frankie says `Joe is delighted with it, I was talking to him but he says he thought you would only get £10,000 out of it and you'd want to be watching yourself', " said Mr Gogarty.

According to Mr Gogarty, Mr Reynolds's comments gave him to understand he was "on risk even if ESB paid over the money, that I might never get the bloody thing".