Burke v Beatty

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 22 June 2016
• Neutral Citation: [2016] IEHC 353
• Docket Number: [2013 No. 4467 P]
• Court: High Court
• Date: 22 June 2016

BETWEEN

PATRICK BURKE

AND

AUBREY WOOLFSON

PLAINTIFFS

AND

ROBERT BEATTY

DEFENDANT

[2016] IEHC 353

Noonan J.

[2013 No. 4467 P]

THE HIGH COURT

Land & Conveyancing – O.19, r. 28 of the Rules of the Superior Courts – Striking off the claim – Lack of cause of action – Conspiracy – Professional negligence

Facts: The defendant/solicitor sought an order for dismissal of the plaintiff's claim of conspiracy and professional negligence filed against the defendant. The plaintiffs argued that the defendant had manipulated them to enter into a settlement agreement with the third party for securing the right of way as desired by the plaintiffs whereby the plaintiffs were made liable to pay damages to the third party for contravention of part performance of said agreement. The plaintiffs asserted that the defendant knew that since the planning permission to construct proposed development was about to expire, it was unlikely that the plaintiffs would complete the development and thus, the plaintiffs would incur monetary liability. The plaintiffs also alleged that the defendant had entered into conspiracy with the third party to defraud the Revenue.

Mr. Justice Noonan granted an order for the dismissal of the claim of the plaintiffs in relation to the tort of conspiracy. The Court, however, upheld the claim of the plaintiffs in relation to professional negligence. The Court observed that for a claim based on tort of conspiracy, the plaintiff needed to prove that two or more persons had acted in collusion with the intent to injure the plaintiff, which was not the instance in the present case. The Court found that since the plaintiffs had alleged that the purpose of the conspiracy was to defraud the Revenue, the claim could not come within ambit of the definition of tort of conspiracy. The Court found that the grant of summary judgment against the plaintiffs for non-completion of the part of the said settlement agreement in relation to the claim instituted by the third party was the result of the drafting of that agreement by the defendant. The Court noted that the plaintiffs had received no benefit and went into unnecessary pecuniary losses as the said agreement which was made contingent on the meeting of the architects of the respective parties was, in fact, an agreement to agree and the fault in relation to that agreement rested solely with the defendant.

JUDGMENT of Mr. Justice Noonan delivered on the 22nd day of June, 2016

Introduction

1 In the within motion, the defendant seeks an order pursuant to O. 19, r. 28 of the Rules of Superior Courts and/or the inherent jurisdiction of the court striking out the plaintiffs' claim on the grounds that it discloses no reasonable cause of action, is bound to fail or is frivolous or vexatious. Alternatively, the defendant seeks an order pursuant to O. 19, r. 27 of the Rules striking out such parts of the claim as the court considers to be unnecessary or scandalous, or tending to prejudice or embarrass or delay the fair trial of the action.

Background facts

2 The plaintiffs are businessmen who were in all material times the owners of a property at 45/46 Bellview Avenue Lower, Dublin. The plaintiffs' property adjoined another property known as units A and A1, Old Fairview Cinema owned by a Mr. Gary Payne. Access to Mr. Payne's property is via a right of way over the plaintiffs' property. On the 29th November, 2002, the plaintiffs obtained planning permission from the planning authority for the construction of 36 apartments and two retail units on their property. In the normal way, this planning permission extended for a period of five years and thus was due to expire on the 29th November, 2007. The plaintiffs intended funding the development by means of a loan from KBC Bank which was approved on the 16th March, 2004.

3 On the 29th July, 2005, Mr. Payne instituted proceedings against the plaintiffs arising out of an alleged apprehended interference with his right of way as a result of the development works being or to be carried out by the plaintiffs on foot of the planning permission. A statement of claim was delivered in those proceedings on the 25th November, 2005, in which he sought declaratory relief in relation to the extent of his right of way and injunctions restraining the plaintiffs from interfering with it. Mr. Payne also sought damages.

4 Arising out of the institution of these proceedings, the plaintiffs instructed Mr. Paul Ferris, solicitor, to act on their behalf in relation to the litigation. In or about December 2005, Mr. Ferris in turn instructed the defendant, who is a member of the Bar, to represent the plaintiffs. The defendant drafted a defence and counterclaim to Mr. Payne's proceedings essentially traversing the claim and contesting the extent of the right of way claimed by Mr. Payne. The counterclaim alleged that Mr. Payne was guilty of wrongful actions which caused the plaintiffs loss and for which they claimed damages. They also claimed a declaration regarding the extent of the way. Although it is unclear whether at that stage any work had been done by the plaintiffs on the site, it would appear that by 2007 at any rate, such work as was done was of a fairly preliminary nature involving site clearance and the like. It is clear however, that Mr. Payne's proceedings and his claimed right of way were a significant, and perhaps total, impediment on the plaintiffs' ability to complete the development. It was therefore imperative from the plaintiffs' perspective to have Mr. Payne's claim resolved. A settlement meeting took place between the parties on the 11th October, 2006. It would appear that a sum of €500,000 was sought by Mr. Payne to extinguish the right of way and matters did not progress further at that time.

5 Subsequently, in early May 2007, Mr. Ferris suggested to his opposite number that the parties attend a further settlement meeting at the Four Courts. The meeting took place on the 17th May, 2007. The defendant led the negotiations on behalf of the plaintiffs, having received written instructions from Mr. Ferris on the 9th May, 2007. The plaintiffs' architect, Mr. Fergus Clancy, was also present. The negotiations commenced at around 10am and concluded at around 7pm with a written settlement agreement having been executed by the parties. The agreement, entitled ‘Terms of Settlement’ appears to have been largely drafted by the defendant. The salient terms are as follows:

‘It is agreed between the parties that above entitled proceedings will be settled on the following terms:

[1.][Mr. Payne] hereby agrees to surrender and/or extinguish the right of way …

[2.][Mr. Payne] agrees to enter into the necessary agreements for the extinguishment of the right of way referred to at para. 1 herein within seven days of notice in writing being given to him by registered post of the [plaintiffs'] intention to commence development … Unless and until such time as such notice is given, the plaintiff, is servants, agents, lessees, licences [sic] and/or assigns shall continue to enjoy the benefit of the right of way referred to at para. 1 herein.

[3.]On extinguishment of the right of way referred to at para. 1 herein, the [plaintiffs] hereby agree to grant to [Mr. Payne] his successors and assigns and all and every, the owner or owners, lessees or occupiers of [Mr. Payne's property] a particular and pedestrian right of way at all times and for all purposes by day or by night to pass and re-pass over that portion of the [plaintiffs'] lands which at all times shall have a minimum width of 3.5 meters and a minimum height clearance of 3 meters and run from the entrance to the [plaintiffs'] lands across the [plaintiffs'] lands to the point were [Mr. Payne's] lands adjoin the [plaintiffs'] lands for the purposes of serving and/or accessing [Mr. Payne's] lands…

[7.] The parties' engineers are to meet on site within 30 days to agree the exact line of the right of way to be granted by the [plaintiffs] to [Mr. Payne] referred to at para. 3 herein…

[9.] The [plaintiffs] shall have an option to purchase [Mr. Payne's] property which said option shall expire on the 30th September, 2007. [A price determination method and other terms ore stipulated]…

[11.]The [plaintiffs] shall pay [Mr. Payne] the sum of €275,000 by way of damages not later than eight weeks of the date of this settlement.

[12.] The [plaintiffs] shall pay [Mr. Payne] the sum of €40,000 (inclusive of VAT) as a contribution towards his costs of the proceedings not later than eight weeks of the date of this settlement …’

6 The plaintiffs allege in the within proceedings that at the time the settlement agreement was entered into, there was not enough time remaining for them to carry out sufficient works by the expiry of the planning permission on 28th November, 2007, to avoid the necessity for a fresh planning application. They allege that the defendant was aware of this fact. Following the conclusion of the settlement agreement, the respective parties' experts, incorrectly described as ‘engineers’ in the settlement agreement but in fact architects, did not meet on site within the stipulated 30 day period. In fact discussions between the architects only commenced in July 2007, and ultimately, agreement was never reached on the line of the proposed new way. Mr. Payne's architect in correspondence appears to suggest that this was at least in part related to the fact that no monies were paid to Mr. Payne by the plaintiffs on foot of the agreement. Indeed it is evident from this correspondence and further exchanges between the parties in these and other proceedings that something of a ‘chicken and egg’ debate ensued with Mr. Payne indicating that the new right of way could not be discussed or agreed until the money was paid and the plaintiffs arguing that no money could be due...