Published Monday, 10 September 2012
Mr McKenna was ordered to pay over £2m to complete the deal. (© UTV)
A judge on Monday rejected Nicholas McKenna's account of the disputed deal at the height of Northern Ireland's property boom.
Lord Justice Coghlin said: "To at least some extent, Mr McKenna was basically making it up as he went along."
The catering distribution boss offered to buy Jim McDonald's south Belfast home for £3.5m in April 2007.
Bidding for the property spiralled up from the original £2.25m asking price in less than two weeks.
The offer was expected to make the six-bedroom Victorian property at 50 Malone Park the highest-fetching residence on the market at the time.
But with the sale was never completed, Mr McDonald issued proceedings in a bid to enforce the contract.
Mr McKenna, head of the Ballymena-based Galgorm group, claimed he withdrew his offer once he realised the son he planned to buy the house for was not interested.
He said the £1.35m he gave Mr McDonald was a loan to help ensure the seller did not lose out on a bungalow he was planning to move to.
He told the court he arranged for a contract to be drawn up as a security for the loan and claimed he never planned to complete on the Malone Park purchase.
Mr McKenna stressed it was never his intention to 'flip', or sell the property on for profit.
The businessman had previously denied suggestions that the property crash thwarted any hopes of making a £500k profit on the house.
Despite investing in commercial property all his life, he said he had no experience of the domestic market.
Mr McDonald, a former independent assessor of military complaints, gave evidence that he put the house on the market to secure his family's future. He has known Mr McKenna for years, with both being members of the Knights of the Order of the Holy Sepulchre.
Delivering judgment in the action, Lord Justice Coghlin pointed to a lack of credibility in Mr McKenna's testimony.
Notes kept by an estate agent were consistent with the businessman reaching an agreement with Mr McDonald to buy 50 Malone Park and sell it on, presumably in the hope of making a profit and avoiding stamp duty, the judge held.
"Some of Mr McKenna's answers bordered on the nonsensical," he said.
Mr McKenna was unable to explain why his son had sought a property certificate, and inquired about service charges and rights of way in correspondence headed 'subject to contract' in relation to 50 Malone Park - despite claiming he knew the purchase was not going ahead.
Lord Justice Coghlin rejected claims that a fixed completion date or a condition that Mr McKenna would secure a purchaser to resell the house to were ever discussed, let alone agreed between the parties.
He ruled that Mr McKenna should pay Mr McDonald balance purchases monies amounting to £2,150,000, as well as with interest from March 31, 2008.
Counsel for Mr McKenna, who did not attend for the verdict, suggested it may be appealed.
Mr McDonald was in court but declined to comment afterwards.