Cahill v Seepersad and Others

• Jurisdiction: Ireland
• Judge: Ms. Justice Eileen Roberts
• Judgment Date: 25 October 2023
• Neutral Citation: [2023] IEHC 583
• Court: High Court
• Docket Number: 2013 No. 6784P

Between

Jim Cahill

Plaintiff

and

Karl Seepersad, Desmond Seepersad and Tara Seepersad

Defendants

[2023] IEHC 583

2013 No. 6784P

THE HIGH COURT

Settlement agreements – Liabilities – Damages – Defendants seeking damages – Whether the plaintiff breached partnership arrangements

Facts: It was accepted by all parties that since September 2009 a nursing home business and the nursing home premises (the Property) had been owned by way of a partnership between them. This was a case in which there were multiple headings of loss claimed and the quantum was not confined merely to an allocation of the profits of the partnership. The High Court also needed to address liabilities arising under various settlement agreements previously entered into between the parties. Those settlement agreements were in effect the partnership agreement – there was no other formal partnership agreement in place. There were three separate elements which needed to be addressed in the case namely: (1) how to calculate the entitlements of each partner by reference to their drawings to date and the partnership arrangements set out in the settlement agreements (the Settlement); (2) how to deal with the claims of the defendants, Mr K Seepersad, Mr D Seepersad and Ms Seepersad, for damages against the plaintiff, Mr Cahill, for breach of the partnership arrangements; and (3) how to deal with the partnership assets (which essentially comprised the Property and the nursing home business operated in it) and the entitlements of each of the partners in the context of dissolution of the partnership.

Held by Roberts J that the court should be provided with an updated partnership statement of account amended to reflect the decisions of court on the disputed aspects of the Settlement. Roberts J held that this would enable the court to understand: (a) the payments attributable to the defendants to date; (b) the extent of the adjustments required to the drawings account of each defendant; (c) the drawings attributable to the plaintiff to date; (d) the extent of the adjustments required to the drawings account of the plaintiff to reflect the judgment; (e) the revised profit of the partnership bearing in mind the adjustments ordered by the court; and (e) the amount of profit share due to the parties individually. Roberts J also awarded damages to the defendants against the plaintiff in the following amounts: (1) special damages in the amount of the additional mortgage interest incurred by the defendants to date due to the missed payments on their mortgage on the family home; (2) special damages to each defendant in the sum of €5,000 to each of Ms Seepersad and Mr D Seepersad and €10,000 to Mr K Seepersad in respect of the estimated additional costs each would incur in belatedly recommencing and completing their education; (3) general damages of €35,000 to each defendant for pain and suffering arising from the plaintiff’s breach of fiduciary duty owed to them and for breach of the exceptional contract in the case which was designed to provide for their security and maintenance, recognising the consequences of such breach over an extended period; and (4) aggravated damages of €15,000 to each defendant in recognition of the added hurt and insult caused to them and the plaintiff’s conduct to date.

Roberts J held that the Settlement provided that the nursing home would pay the legal costs incurred by Mr Pigot arising out of negotiations in concluding the Settlement terms; accordingly, no adjustment was required for those payments, but such fees remained due and must be paid by the nursing home. In the event that any additional interest had been incurred on those fees Roberts J held that same must also be paid so that the judgment mortgages registered are discharged in full at no cost to the defendants. Roberts J did not accept that Mr Stafford’s report could properly be viewed by the court as independent or objective; his report was accordingly inadmissible as evidence. Roberts J was satisfied that the court had jurisdiction to make a Syers order (Syers v Syers [1876] 1 App Cas 174) if it was required to do justice between the parties and was appropriate in any given case.

Damages awarded to defendants.

JUDGMENT of Ms. Justice Eileen Roberts delivered on 25 October 2023

Table of Contents:

1. Introduction.	Page 3.
2. The parties and an overview of the background to this dispute.	Page 5.
3. The Settlement.	Page 7.
4. The factual evidence adduced on behalf of the plaintiff.	Page 11.
i. The plaintiffs own evidence.	Page 12.
ii. The evidence of David Pigot.	Page 28.
5. The factual evidence adduced on behalf of the defendants.	Page 29.
i. The evidence of Róisín Markey.	Page 29.
ii. The evidence of Tara Seepersad.	Page 29.
iii. The evidence of Desmond Seepersad.	Page 33.
iv. The evidence of Karl Seepersad.	Page 35.
v. The evidence of Hardeo Seepersad.	Page 36.
6. The expert evidence.	Page 36.
i. The expert evidence of Mr. Walsh.	Page 37.
ii. The expert evidence of Mr. Stafford.	Page 44.
iii. Legal submissions on the admissibility of Mr. Stafford's evidence.	Page 48.
iv. The courts decision regarding the admissibility of Mr. Stafford's expert evidence.	Page 52.
v. The expert evidence of Mr. Murphy.	Page 53.
vi. Legal submissions on Mr. Murphy's expert evidence.	Page 54.
7. The Joint Expert Report.	Page 55.
i. The defendant's drawings.	Page 56.
ii. The plaintiff's drawings.	Page 57.
a. The salary paid to the plaintiff.	Page 57.
b. Underpayment of PAYE, PRSI, USC.	Page 58.
c. Professional fee to regularise tax affairs.	Page 58.
d. Interest payments to AIB on business loan.	Page 58.
e. Car loan payments.	Page 59.
f. Plaintiff's car expense claims.	Page 60.
g. Food.	Page 60.
h. Maintenance.	Page 60.
i. Taxi.	Page 60.
j. Dublin office.	Page 61.
k. VHI payment.	Page 61.
l. Other payments to plaintiff.	Page 61.
m. Motor expenses.	Page 61.
n. Legal and professional fees.	Page 61.
o. Sponsorship.	Page 62.
p. Payments to Liadh Cahill.	Page 62.
q. Payments to Ruairí Cahill.	Page 63.
r. Further agreed matters.	Page 64.
iii. Tara Seepersad salary.	Page 64.
8. The defendant's claim for damages.	Page 65.
9. Additional matters arising from the pleadings.	Page 72.
10. Syers Order.	Page 73.
11. Conclusion & next steps.	Page 76.

Introduction

1 . On 12 July 2008 Brigid Seepersad died tragically in a road traffic accident shortly after her arrival in the USA. She left surviving her, and living together in her family home, her three children (who are the defendants in these proceedings) and her second husband (the plaintiff), who is the stepfather to those children. Unbeknownst to any of them, a mere two days before her death, Brigid had secured a decree of divorce from the plaintiff in the Circuit Court on 10 July 2008 immediately prior to her departure for the USA. This judgment deals with the declining relationship between the parties to these proceedings in the aftermath of Brigid's death and, in particular, the difficulties which arose regarding the nursing home business which was owned by Brigid, and which had been operated by her with the plaintiff up to the time of her death.

2 . The trial ran for seven days before the High Court between 6 and 15 December 2022. Thereafter the hearing was adjourned to enable further engagement to take place between the respective experts and to obtain an agreed property valuation for the nursing home premises (the “ Property”). Those matters took some time. I heard submissions from counsel on the evidence on 13 June 2023 and I now deliver my judgment on the issues arising.

3 . Before outlining the evidence and the issues in dispute, it is useful at the outset to highlight a number of matters relevant to this case.

4 . It is fair to say that this is a difficult case on many levels. It raises some novel points of law in relation to partnerships and in particular how an Irish court can resolve a partnership dispute where the partners simply cannot work together, where both want to acquire control of the partnership asset and where the usual course of appointing a receiver is likely to result in significant practical difficulties and in little or no return for any of the parties, given the costs involved. These practical difficulties are further compounded by the nature of the partnership asset in this case, which is an operating nursing home. This nursing home is home to twenty-five residents. It is also a place of employment for the thirty people who work there. It is regulated by law and is subject to stringent compliance obligations and monitoring by the Health Information and Quality Authority (“ HIQA”). Operation of the nursing home is subject to its meeting the governance and other compliance standards required by HIQA. This dispute is a matter of some concern to HIQA and the ultimate outcome needs to address any ongoing governance concerns to ensure that the nursing home remains operational and viable as a going concern if that is possible.

5 . It is difficult to overstate how polarised the parties are from each other. This dispute relates to matters dating back as long as fifteen years and to proceedings issued ten years ago. The evidence was at times emotional, distressing, and difficult for the witnesses. In the interests of protecting the privacy of witnesses as much as is possible while still recording the essential evidence, I have not included in this judgment details of many personal matters that were tendered in evidence or included in detailed witness statements.

6 . Both sides engaged expert witnesses to assist the court in relation to financial calculations. From the outset, the plaintiff...