Crofter Properties Ltd v Genport Ltd

• Jurisdiction: Ireland
• Judgment Date: 10 September 2002
• Date: 10 September 2002
• Docket Number: [1996 No.
• Court: Supreme Court

Crofter Properties Ltd. v. Genport Ltd.

Crofter Properties Ltd.

Plaintiff

and

Genport Ltd.

Defendant

[1996 No. 25 P and S.C. No. 115 of 2002]

High Court

Supreme Court

High Court

Agency - Attribution - Vicarious liability - Telephone calls made to English police - Whether calls made on behalf of company - Whether calls made for purpose of damaging defendant - Whether third party acted on behalf of plaintiff company although not agent or servant - Whether officer of company deemed to have been acting on behalf of company.

Damages - Assessment of damages - Punitive or exemplary damages - Whether right to set off - Right to forfeiture - Relief against forfeiture - Courts Act interest.

Evidence - Failure to call - Inferences to be drawn - Whether court entitled to draw inference from failure of party to call evidence within its knowledge.

Landlord and tenant - Rent - Non payment of rent - Forfeiture - Relief against forfeiture - Whether acts of lessor entitled lessee to relief against forfeiture.

There has been a history of litigation between the parties resulting in many sets of proceedings. Under a lease the property, the subject matter of these proceedings, was demised to the defendant for the term of 21 years subject to an initial annual rent. The lease contained a forfeiture clause in the event of rent reserved or any part thereof being in arrears for 21 days after it became due. The plaintiff's claim was for arrears of rent and also a claim for possession of the premises, based on the forfeiture clause, by reason of the non-payment of rent. The defendant counter-claimed for, inter alia: (i) damages including exemplary or aggravated or punitive damages for injurious falsehood; negligent misstatement; defamation and wrongful interference with the economic interests of the defendant; (ii) set-off of damages awarded against the rent owed by it.

The defendant claimed that the plaintiff had embarked on a course of action for the purpose of commercially damaging the defendant and for the purpose of forfeiting and injuring the defendant's interest in the premises. In 1992 officers of the South East Regional Crime Squad of the English police began to receive telephone calls from an Irish woman who made allegations about various matters including allegations about the premises in question and, at times, information relating to the principal of the defendant company and a member of his family. When the defendant became aware of these calls its directors became suspicious that the calls had been organised maliciously by the plaintiff in an attempt to put the defendant out of business. The defendant alleged that the calls were made by the plaintiff, its servants or agents and that the calls were of a malicious, untrue and defamatory nature. The defendant sought and received third party discovery from Eircom and raised interrogatories in order to confirm the owners of various telephone lines and their connection with the plaintiff. The defendant alleged that the calls were made by a director of the plaintiff and that due to her involvement in the management of the plaintiff company, the plaintiff company was vicariously liable for her actions. Ms. D. was called as a witness by the defendant but not by the plaintiff.

The defendant further claimed relief against forfeiture by way of a defence to the plaintiff's claim.

Held by the High Court (McCracken J.), in dismissing the defendant's counterclaim, 1, that the vicarious liability of a company for wrongs committed by a third party clearly existed where those wrongs had been committed by its servants or agents.

Meridian Global Funds Management Asia Limited v. Securities Commission [1995] 2 A.C. 500 approved.

2. That the questions of whether any relationship existed between the plaintiff company and the third party and whether liability for any loss incurred as a result of the telephone calls were questions of fact to be determined by the evidence given.

3. That there was ample authority that the failure of a party to call a witness was something which the court might take into account.

• R. v. I.R.C., Ex parte T.C. Coombs & Co. [1991] 2 A.C. 283.

4. That the third party, in making the calls, could not be said to have been acting as agent for the plaintiff for the purpose of damaging the defendant. Whilst the third party made the calls, the plaintiff could not be made vicariously liable for the calls.

The defendant appealed to the Supreme Court on the grounds that in light of the uncontroverted evidence of the role played by the third party in the plaintiff company, the history of animosity between the two parties and the High Court Judge's primary findings of fact, the only proper inference to be drawn was that the third party, in making the calls, was or must be deemed to have been acting on behalf or in the interest of the plaintiff company.

Held by the Supreme Court (Murray, Hardiman and Geoghegan JJ.), in allowing the appeal and setting aside the finding of the High Court on the counterclaim, 1, that the appellate court was in as good a position as the trial judge to determine what inferences should be drawn concerning the role or capacity in which the third party made the phonecalls in question.

Hay v. O'Grady [1992] 1 I.R. 210 considered.

2. That the defendant had established as a matter of probability that the third party had made the phone calls in her capacity as a person with an important position in the affairs of the company for the purpose of furthering its interests and in such a manner as to engage the responsibility of the plaintiff company in her actions.

3. That, whilst as the trial judge had inferred that the third party had been motivated by personal animosity, this did not exclude a motivation that was essentially based on furthering the interest of the plaintiff company by damaging the reputation of the defendant company.

The matter was duly remitted to the High Court so that it could deal with all outstanding issues in light of the findings made in the Supreme Court.

Held by the High Court (McCracken J.), in awarding general damages and exemplary damages, 1, that there was no express evidence of actual loss suffered by the defendant as a result of the plaintiff's conduct. However, there probably was some injury to the reputation of the defendant company. Accordingly, the defendant was entitled to some substantial general damages based on the likelihood of loss of various kinds, including loss of reputation.

De Rossa v. Independent Newspapers [1999] 4 I.R. 432 distinguished.

2. That the intention of punitive or exemplary damages was either to punish or make an example of the guilty party.

McIntyre v. Lewis [1991] 1 I.R. 121; Rookes v. Barnard [1964] A.C. 1129 considered.

3. That, if the conduct of the guilty party was such as required it to be punished, or made an example of, then the damages should be awarded on that basis and without regard to the possibility of a windfall to the innocent party.

McIntyre v. Lewis [1991] 1 I.R. 121 approved.

4. That, in assessing the damages, the trial judge was entitled to have some regard to the financial position of the parties. Further, it was appropriate to have regard to the Supreme Court guidelines in relation to defamation in assessing the exemplary damages, as it would be wrong for a court to award a higher figure in exemplary damages than it could ever award for general damages.

5. That the sum awarded in damages could be set off against all sums owed by the defendant to the plaintiff in respect of rent. But that set off was a defence and therefore the claim must exist at the time of the issue of proceedings. The only sums that could be set off were the damages (and not sums in relation to costs if same were awarded to the defendant).

6. That the interest payments should only be calculated on the sum found due and owing and the defendant should be given credit for any overpayment of interest.

7. That the Courts Act rate of interest was the appropriate interest because it had been chosen at this rate (in the pleadings) and interest in a situation such as this did not equate to deposit interest rates but rather to the interest rate on loans.

Cases mentioned in this report:-

De Rossa v. Independent Newspapers [1998] 2 I.L.R.M. 293 (H.C.); [1999] 4 I.R. 432.

Hay v. O'Grady [1992] 1 I.R. 210; [1992] I.L.R.M. 689.

McIntyre v. Lewis [1991] 1 I.R. 121.

Meridian Global Funds Management Asia Ltd. v. Securities Commission [1995] 2 A.C. 500; [1995] 3 W.L.R. 413; [1995] 3 All E.R. 918.

Multinational Gas & Petrochemical Company v. Multinational Gas & Petrochemical Services Ltd. [1983] Ch. 258; [1983] 3 W.L.R. 492; [1983] 2 All.E.R.563.

R. v. I.R.C., Ex parte T. C. Coombs & Co. [1991] 2 AC 283; [1991] 2 W.L.R. 682; [1991] All E.R. 623.

Rookes v. Barnard [1964] A.C. 1129; [1964] 2 W.L.R. 269; [1964] 1 All E.R. 367; [1964] 1 Lloyd's Rep. 28.

Plenary summons.

The facts have been summarised in the headnote and are more fully set out in the judgment of McCracken J., infra.

By plenary summons dated the 3rd January, 1996, the plaintiff claimed,inter alia, arrears of rent in the sum of £588,605.41. An appearance was entered on the 12th January, 1996. In April, 1996, the defendant brought an application seeking an adjournment in order to obtain evidence from certain witnesses in the United Kingdom, which was granted the adjournment on the basis that the defendant would pay the plaintiff arrears in the sum of £100,000 within 28 days. The plaintiff sought by motion on notice, dated the 20th October, 1999, an order re-entering the proceedings for hearing. The action came before the High Court for hearing on the 16th, 17th and 18th April, 1996, on the 10th January, 2000, on commission in London and on the 12th, 13th and 14th March, 2002.

The defendant appealed to the Supreme Court by notice of appeal dated the 7th May, 2002, and the appeal was heard before the...