IV.

Coen's Meeting with Montgomery.

As Coen was unhappy with the lack of information disclosed to the members at the information meetings concerning such a large and important transaction and as he had had a professional involvement as an accountant with another golf club, he wrote to Montgomery on 15^th June 2002 (Appendix 1).

In his letter to Montgomery, Coen clearly outlines his concerns on the issue of the valuation reports, estimates what he believes the Ballyman development costs to be and identifies an unexplained difference of ˆ18 million on which he sought clarification and explanation. Montgomery replied on 29^th July 2002 (Appendix 2), declining to respond in writing but suggesting a meeting. When Coen telephoned Montgomery to arrange the meeting, Montgomery informed Coen “your figures are way out.”  As Coen's figures were ˆ22 million and ˆ18 million compared with Montgomery's figures of ˆ22.6 million and ˆ17.4 million, the reader must judge for themselves!

Did Montgomery advise his colleagues on the CRC – O'Rourke and Burke – or the Captain, Pearse Rayel (2002) that he was meeting with Coen to discuss the issues raised in Coen's letter of 15^th June 2002 (Appendix 1)?

The meeting took place as arranged on Monday 26^th August 2002, was cordial and non-confrontational throughout except for possibly the last 10 minutes and lasted approx. 40/45 minutes.  Montgomery attended the meeting with two very full lightly coloured correspondence type files - his colleagues on the CRC and the Parent Council will no doubt recall the files to which Coen refers - and Coen had his original copy of the letter of 15^th June (Appendix 1).  There was no suggestion by Montgomery from the outset of the meeting that the discussion was confidential or that no notes could be taken which would be the norm if such conditions were to attach to the meeting.

Initially the meeting took place in the non-members bar but because of the presence of an individual who Montgomery did not recognise, the meeting moved to the Rose garden in front of the clubhouse. The events that unfolded during the course of this meeting are fully detailed in Coen's sworn affidavit and are dealt with below.  In addition, as Montgomery furnished Coen with details of the ˆ40 million development costs and his difference of ˆ17.4 million, Coen wrote these figures down (Appendix 1).  These “notes” were subsequently disclosed to another member within days of the meeting and that member has confirmed such disclosure in writing.

Montgomery advised Coen that :

IV.

Coen's Meeting with Montgomery. (cont/d….)

Coen's figure for the Ballyman clubhouse was ˆ10 million whereas Montgomery's figure was ˆ8 million – a figure not disclosed to the members of DLGC until the EGM on 9^th January 2003, over 4 months later.

It is important to note that there was absolutely no hesitation on Montgomery's part in furnishing Coen with such information – Montgomery could not have been more forthcoming – which is very strange indeed in the light of his subsequent if not belated denials!

Coen immediately questioned the relevance of these costs by reference to Clause 14 of the Heads of Agreement. Montgomery stated that Clause 14 must be incorrect!  Coen reminded Montgomery that this could not be the case as the members of DLGC had approved this document at the EGM on 19^th June 2002.  Montgomery nonetheless agreed to check this point with the club's solicitors, Arthur Cox, as noted by Coen in his letter to Montgomery of 7^th September 2002 (Appendix 4).

While Montgomery never responded on this issue, Arthur Cox in a letter to Coen's solicitors of 4^th April 2003 state:

“Clause 14 of the Heads of Agreement could not be more clear. All costs incurred by DLGC of whatever nature relating to the proposed transaction are to be borne by the developer.  This is in addition to the developer's obligation to discharge its own costs arising in connection with the transaction”.

Based on the wording of Clause 14 and the legal opinion from Arthur Cox, one might wonder why Montgomery and the CRC should include ˆ17.4 million or ˆ16.0 million – as advised to the members of DLGC at the January 2003 EGM - in the ˆ40 million Ballyman development costs?

IV.

Coen's Meeting with Montgomery. (cont/d….)

Coen also suggested to Montgomery that in view of the materiality of the figures involved, the CRC should disclose this information to the members of DLGC.  Montgomery's responded that this information had already been disclosed to the members at the information meetings.  Coen made it very clear to Montgomery that he did not agree with this view.

When Coen question the justification for the figure of ˆ5.3 million bank interest, Montgomery responded that if it was not included here the developers would insist that it be deducted from the ˆ20 million cash payment?  This statement clearly indicated to Coen that Montgomery did not appear to understand the financial implications of what he was saying!

As there was clear disagreement between Coen and Montgomery on the issue of the ˆ17.4 million costs and the disclosure to the members, the meeting did not address the remaining issues in Coen's letter.

As the meeting concluded and as Montgomery and Coen were walking back into the clubhouse, Montgomery turned to Coen and requested that he treat the information disclosed in confidence.  As Montgomery only minutes before had insisted that such information had been “imparted” to the members at the information meetings in May/June 2002, Coen not only considered the request inappropriate but also dishonest because of the implications of such a request for his fellow members.

Coen left the meeting very disturbed with the information which he had received from Montgomery and concerned that he was in possession of information which had not been disclosed to the wider membership of DLGC. Such information had, Coen believed, a very material impact on the honesty and integrity of the information concerning the DLGC/Ballyman financials.

The suggestion in Montgomery's letter of 3^rd February 2003 (Appendix 13) that Coen left the meeting on 26^th August 2002 fully satisfied with the explanations he had received is without question false, a gross mis-representation of the truth or a lie and is clearly contradicted by Coen's subsequent actions.  Coen was shocked with the information he had received and this was clearly apparent to Montgomery – hence his request as an afterthought to ask Coen to treat the information in confidence. Does Coen's letter of 7^th September 2002 (Appendix 4) or his letter to the Trustees of 8^th October 2002 (Appendix 5) suggest he was fully satisfied with the outcome of the meeting?

Coen's approach from the outset was to allow Montgomery the opportunity to set the record straight in the best interests of the club and its members (Appendix 4). When he failed to do so, Coen felt compelled to involve the club's Trustees.  When they failed to ensure full disclosure to the members of DLGC, Coen felt compelled, with the support of his fellow members, to call an EGM under the club's rules. As a consequence of Montgomery's denials and lies at the EGM on 9th January 2003, it has now become necessary to ensure that the truth about the meeting between Coen and Montgomery on 26^th August 2002 is established and that the accusation by Montgomery that Coen lied on this very serious matter is grossly untrue.