David Dully v Athlone Town Stadium Ltd

• Jurisdiction: Ireland
• Judge: Faherty J,Murray J.,Collins J.
• Judgment Date: 17 December 2021
• Neutral Citation: [2021] IECA 337
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record No. 2020/7 Court of Appeal Record No. 2020/8 High Court Record No. 2017/252 SP Court of Appeal Record No. 2020/9 High Court Record No. 2017/252 SP

Between

David Dully

Plaintiff/Respondent

and

Athlone Town Stadium Limited

Defendant/Appellant

and

By Order of the High Court Dated 17 ^th December 2018 Declan Molloy, Cieran Temple and Paddy McCaul

Defendants/Appellants and Respondents

and

The Football Association of Ireland

Notice Party

[2021] IECA 337

Faherty J.

Murray J.

Collins J.

Court of Appeal Record No. 2020/7

High Court Record No. 2017/252 SP

Court of Appeal Record No. 2020/8

High Court Record No. 2017/252 SP

Court of Appeal Record No. 2020/9

High Court Record No. 2017/252 SP

THE COURT OF APPEAL

CIVIL

UNAPPROVED

NO REDACTION NEEDED

Judgment of Faherty J, Murray J. and Collins J. dated the 17 ^th day of December 2021

TABLE OF CONTENTS

I FACTS AND ISSUES
These appeals	3
Background	4
The commencement of the proceedings and the first judgment	5
The second to fifth judgments	9
II THE SETTLEMENT AND THE COMPANY'S SUBSEQUENT APPLICATION
The damages claim against the directors	10
The settlement	11
Events following the settlement of 23 May 2019	13
The motions	13
The hearing of October 15	16
The subsequent affidavits	17
III THE HEARING AND THE JUDGMENT
The hearing of the motions of 20 September and 25 November	20
The trial Judge's analysis	22
The trial Judge's treatment of the costs	28
IV THE APPEALS AGAINST THE DISMISSAL OF THE MOTIONS
The Notices of Appeal	29
The issues	32
V THE ISSUES OF PROCESS
The comments in the judgment about counsel and solicitor and interruptions of counsel (Grounds 1(a) and (d))	32
The failure to seek submissions from the respondents (Grounds 1(b) and (c))	41
Mr. MacGeehin's affidavit (Ground 2(a))	43
The failure to adjourn to plenary hearing and refusing the application to allow Mr. McNelis reply to the affidavit of Mr. MacGeehin (Ground 3)	46
VI THE SUBSTANTIVE ISSUES
The legality of the settlement (Grounds 2(b)(ii), 4(d), 4(e), 4(h), 5(b), 5 (c))	47
The formalities attending the settlement (Grounds 4(e), (h), 5(b))	51
The 15 May E-mail, and the delegation of authority (Grounds 2(b)(i),4(a), 4(b), 4(c), 5(a))	58
The legality of the payment out of the security (Ground 4(f), 4(g))	59
Mr. Molloy's objection to the settlement	59
VII THE APPEALS AGAINST THE ORDERS FOR COSTS
The appeals of the Company and of Mr. Molloy	60
Mr. Temple's appeal	62
VIII CONCLUSIONS AND ORDERS	68
APPENDIX

I FACTS AND ISSUES

These appeals

1 . Three questions arise from these unusual appeals. The first is whether the conduct by the High Court Judge of the trial of a number of issues directed to whether Athlone Stadium Limited (‘the Company’) was bound by a settlement agreement entered into between some of the parties to this action (‘the settlement’) was, as the Company alleges, unfair and irregular to a degree that his decision should be set aside and a re-hearing ordered. The second is whether the settlement was entered into without the authority of the Company and/or was otherwise unenforceable at law. The third is whether the Judge erred in directing that the plaintiff (hereinafter “Mr. Dully”) recover as against the Company, the second named defendant (‘Mr. Molloy’) and the third defendant (“Mr. Temple”) jointly and severally on a solicitor and client basis the costs of the motions the subject of the substantive appeal, and that the fourth defendant (“Mr. McCaul”) recover his costs of those motions against the Company and Mr. Molloy jointly and severally on a solicitor and client basis.

2 . The legal action has had a complex procedural history. From its initiation in June 2017 to its conclusion one and a half years later the case has spawned twenty-three separate orders and eight written judgments of the High Court, the last of which gives rise to this appeal ( [2019] IEHC 892). That judgment followed a hearing held over four days in 2019 (November 29, December 3, 4 and 5). The hearing arose from motions issued by the Company dated 20 September 2019 and 25 November 2019, the relief sought being directed to the enforceability of the settlement and (as originally presented to the Court) the return of monies that had been lodged by the Company as security for costs of an appeal against an earlier judgment in the action. The motions were heard on affidavit and with cross-examination of four witnesses. The Court in an ex tempore judgment delivered following the evidence and at the conclusion of the submissions of the Company and Mr. Molloy (but without hearing the other parties to the application) rejected their claims that the settlement was not enforceable, ultimately making the costs orders to which we have referred.

3 . The Company and Mr. Molloy now appeal the dismissal of the motions and costs orders, while separately Mr. Temple appeals the two costs orders made against him jointly and severally with the Company and Mr. Molloy.

Background

4 . It is one of the many unfortunate features of this bitter dispute that it arises from the affairs of a sporting body, Athlone Town Football Club (“the Club”). This unincorporated association was established in 1887. It has the distinction of being the oldest soccer club in Ireland. From 1927 to 2007, the Club's home was at St. Mel's Park in Athlone.

5 . As of 2004, licensing regulations imposed by UEFA meant that the Club required a new stadium. To this end, the Club acquired from Westmeath County Council an 8.5-acre site at Lissywollen, Athlone (Folio 30190F Co. Westmeath). In order to give effect to the arrangements with the County Council and in exchange for the lands at Lissywollen it was necessary for the Club to transfer its old grounds, St. Mel's, to the Council. The St. Mel's lands were held for the Club by its last known trustee, Mr. Johnny Keena (now deceased). In 2004, the Company was incorporated to facilitate the transition by the Club to the new premises, the equity therein being held as to 97% by Mr. Molloy, 2% by Mr. Temple and 1% by Mr. McCaul, these also being the only directors of the Company. Mr. Keena executed a transfer of the St. Mel's grounds to the Company which, in turn, transferred the property to Westmeath County Council in exchange for the 8.5 acre site at Lissywollen. The new stadium was then constructed on the Lissywollen lands.

6 . The cost of construction of the stadium at Lissywollen was in the order of €4.5m. This was funded by lottery monies in the amount of approximately €2.5m together with donations and payments in the amount of €2m which, it appears, includes a sum put into the Company by Mr. Molloy. This is said by him to be in the region of €665,000. The stadium was completed in 2007 and the first match was played at the new facility in that year.

7 . On 23 February 2007, a purported lease was entered into between Mr. McCaul (in his role as an officer of the Club) and the Company. As found by Humphreys J. in his first judgment delivered on 12 April 2018, certain provisions of the lease were contrary to the Club's de facto position regarding the use of the stadium. No rent was paid by the Club to the Company in respect of the Club's use of the stadium on foot of this lease.

8 . In December 2012, Mr. John Hayden was appointed chairman of the Club. By this time the stadium had fallen into a state of disrepair, its condition being in part attributable to serious flood damage. In January 2013, concerns were expressed by the Club to the Company about the state of disrepair of the stadium. The response received was that the Company owned the property, thereby failing to acknowledge its trustee status. In early 2013, Mr. Molloy claimed the right to sell the stadium without resort to the Club.

9 . The first judgment of the High Court in these proceedings (to which we will return later) records (at para. 5) that on 8 December 2014, Mr. Dully was appointed by the Club as a trustee. On 23 April 2015, a deed of trust was executed by Mr. Hayden and Mr. Dully (as the executive committee of the Club), of the one part, and the Company, of the other. The recitals to the declaration of trust provided, at para. B, that the legal title in the property has at all times been held by the Company on trust for the executive committee of the Club as beneficial owner. At para. 1, it was declared that the trustee held the title on trust for the beneficial owner and that it would deal with the property at all times only as directed by the beneficial owner. Clause 2 provided that the beneficial owner covenanted to indemnify the Company “in respect of all present and future liabilities, actions, proceedings, claims, demands, duties and taxes and all associated interests, penalties and costs and all other costs and expenses whatsoever in respect of the property”. On the same date, the parties executed a 35-year lease with effect from 1 January 2014 at a rent of €10,000 per year.

10 . On 20 July 2015, the Club formed a company limited by guarantee, Athlone Town AFC Co. (“Athlone Town AFC”). Athlone Town AFC was to be the vehicle through which the Club members could act in a legal capacity.

11 . On 26 April 2016, the Company was advised that in view of various identified failures on its part, the Club was terminating its relationship with it, and the Company was called upon to convey the stadium to Mr. Hayden and Mr. Dully as trustees of the Club. No such conveyance ensued, and these proceedings followed.

The commencement of the proceedings and the first judgment

12 . The action was commenced by special summons issued on 19 June 2017. The summons describes Mr. Dully as having been nominated as a member of the Executive Committee of Management of...