Doran v Delaney (No. 2)

Judgment Date01 January 1999
Date01 January 1999
Docket Number[1991 No. 10614P]
CourtHigh Court

High Court

[1991 No. 10614P]
Doran v. Delaney (No. 2)
Terence Doran and Maureen Doran
Michael J. Delaney practising under the style and title of Michael J. Delaney & Company, Martin Greene, Elizabeth Greene, Joseph F. Maguire and Della Power practising under the style and title of Joseph Maguire & Company, Defendants (No. 2)

Cases mentioned in this report:-

British Westinghouse Electric & Manufacturing Co. Ltd. v. Underground Electric Rys. Company of London Ld. [1912] A.C. 673.

Dodd Properties v. Canterbury City Council [1980] 1 W.L.R. 433; [1980] 1 All E.R. 928.

Doran v. Delaney [1996] 1 I.L.R.M. 490; [1998] 2 I.R. 61; [1998] 2 I.L.R.M. 1.

Ford v. White & Co. [1964] 1 W.L.R. 885; [1964] 2 All E.R. 755.

Liesbosch, Dredger v. Edison S.S. (Owners) [1933] A.C. 449.

Monarch Steamship Co. Ltd. v. Karlshamns Oljefabriker (A/B) [1949] A.C. 196.

Muhammad Issa el Sheikh Ahwad v. Ali [1947] A.C. 414.

Perry v. Sidney Phillips & Son [1982] 1 W.L.R. 1297; [1982] 3 All E.R. 705.

Quinn v. Quality Homes Ltd. [1976-7] I.L.R.M. 314.

Riordan's Travel v. Acres [1979] I.L.R.M. 3.

Roche v. Peilow (Unreported, High Court, Carroll J., 8th July, 1986).

The Susquehanna [1925] P. 196.

Taylor v. Ryan (Unreported, High Court, Finlay P., 10th March, 1983).

Damages - Assessment - Whether each defendant liable for all losses - Whether failure to mitigate losses due to impecuniosity restricts damages.

Plenary summons.

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

Proceedings were commenced by way of plenary summons dated the 17th July, 1991, and judgment in relation to liability only was delivered by the High Court (Hamilton P.) on the 12th September, 1995 (see [1996] 1 I.L.R.M. 490).The plaintiffs appealed against the finding that there was no liability attaching to the fourth and fifth defendants. On appeal, the Supreme Court determined that the fourth and fifth defendants were liable (see [1998] 2 I.R. 61) and the matter was remitted to the High Court for the assessment of damages.

The matter was heard by the High Court (Geoghegan J.) on the 13th, 14th, 15th and 16th October, 1998.

The plaintiffs had purchased a site for the construction of a dwelling house in October, 1990, for the sum of £25,000. Building operations commenced and thereafter the plaintiffs were notified by an adjoining neighbour that they had encroached upon her land. The small triangular area of land in dispute was vital to the building operations as the vehicles were unable to achieve access without it. The dispute was not resolved. The plaintiffs had to resell the property at a loss and were indebted to the builders. Previous proceedings had determined that liability attached to all the defendants and the matter was remitted to the High Court solely for the assessment of damages (see [1998] 2 I.R. 61). The plaintiffs claimed the sum of £232,623.22 plus general damages.

The sum claimed as special damages comprised,inter alia, loss of family home, expenses incurred incidental to land purchase and sale, the amount owing to the builders, loss of earnings due to time spent resolving the difficulties, loss of tax relief on mortgage payments and the reinstatement expenses for the purchase of a family home of equivalent value. The claim for loss of earnings was abandoned at the hearing of the action as being too remote.

Held by the High Court (Geoghegan J.), in assessing damages at £202,198.56, 1, that there was no legal justification for differentiating between the defendants in the measure of the financial loss recoverable by the plaintiffs.

2. That a loss was not too remote if it could have been reasonably within the contemplation of the parties at the time of entering into the contract or at the time of making the misrepresentation or committing the breach of duty in the case of a tort. That theprima facie measure of damages was not appropriate where it was reasonably foreseeable that the person damnified would, as a consequence of impecuniosity, be unable to mitigate the loss until recouped by the offending party.

Muhammad Issa el Sheikh Ahwad v. Ali [1947] A.C. 414;Monarch Steamship Co. Ltd. v. Karlshamns Oljefabriker (A/B)[1949] A.C. 196;Perry v. Sidney Phillips & Son[1982] 1 W.L.R. 1297;Quinn v. Quality Homes Ltd. [1976-7] I.L.R.M. 314;Riordan's Travel v. Acres[1979] I.L.R.M. 3 considered.Liesbosch, Dredger v. Edison S.S. (Owners)[1933] A.C. 449 not followed.

3. That the losses allegedly incurred on foot of decisions made by the first plaintiff in connection with his business as a consequence of the second and third defendants' breaches of contract and tort were too remote. The first plaintiff's opposition to the planning application by the adjoining neighbour could not be regarded as either contributory negligence or as a failure to mitigate losses.

4. That the plaintiffs must recover a sufficient sum to enable them to acquire the four bedroomed house which they had intended to build together with all other foreseeable losses such as the liability to the builder, cost of the abortive sale, costs owing to their solicitors in connection with trying to have the problems with their adjoining neighbour resolved and the exploration of alternative modes of access for the builders by using a private road.

Cur. adv. vult.

Geoghegan J.

25th November, 1998

This is an action for damages arising out of a purchase by the plaintiffs of a site for a dwellinghouse in circumstances where the plaintiffs were unable to build due to a defective title in a portion of the property sold. The first defendant was the solicitor for the plaintiffs on the purchase. The second and third defendants were the vendors and the fourth and fifth defendants were the solicitors for the vendors.

The action came on for hearing before the High Court (Hamilton P., as he then was) on the 7th and 8th October, 1993. The hearing was further resumed on the 5th October, 1994. It was decided at the hearing that only liability would be determined and that in the event of liability on the part of one or more of the defendants being found, the damages would be assessed on a later date. The High Court (Hamilton P.) delivered judgment on the 12th September, 1995, and he found the first defendant to be in breach of a duty of care owed to the plaintiffs and he also found the second and third defendants to be liable for breach of duty of care to the plaintiffs including negligent misrepresentation. The High Court absolved the fourth and fifth defendants from all liability and dismissed the action as against them.

The plaintiffs appealed to the Supreme Court against the finding of no liability on the part of the fourth and fifth defendants and the appeal was allowed. The High Court judgment is reported at [1996] 1 I.L.R.M. 490, and the judgments in the Supreme Court of Keane and Barron JJ. (Barrington J. concurring) are to be found at [1998] 2 I.R. 61.

The background facts are as follows. The second and third defendants who are the vendors had themselves started to build a house on the site in question pursuant to a planning permission which they had obtained from Wicklow County Council. They fell into dispute with an adjoining owner, a Mrs. McKimm, who alleged encroachment. Building work ceased and it was decided to apply for planning permission for a smaller house on the site and sell on the land with the benefit of that permission. The map accompanying the planning application wrongly included an area of ground measuring 54 square metres which was in the possession of Mrs. McKimm. This small piece of ground was vital for providing access to the builders in order to build a house. None of this dispute was communicated to the plaintiffs on their purchase from the second and third defendants, and in fact the plaintiffs were shown a map by Southern Estates Limited, the selling agents acting on behalf of the second and third defendants, and were told that the maps represented the correct boundaries. The plaintiffs were never told about Mrs. McKimm's claim. On advice, however, the plaintiffs did request that the boundary be staked out but they were told by their own solicitor that this was unnecessary and that the matter could be dealt with by inserting a clause in the contract requiring the production of an ordnance survey map which would delineate the property. However any such clause in the contract was itself objected to by the second and third defendants on the grounds that the entire of the property comprised in the folio was being sold. The first defendant agreed to the deletion of the special condition without telling the plaintiffs. A contract was entered into on the 12th September, 1990, for the sale of the property for the sum of £25,000.

In response to a requisition on title which asked whether there was any dispute with adjoining owners in relation to party walls or fences, the fourth and fifth defendants replied "vendor says no". In response to a further requisition as to whether there was any litigation pending or threatened in relation to the property or whether any adverse claim had been made in respect of it, the fourth and fifth defendants replied "vendor says none". The fifth defendant had apparently known of the dispute with Mrs. McKimm but had been informed that it had been settled but she had made no inquiries as to the terms of the settlement.

The sale was completed on the 9th October, 1990 and the plaintiffs commenced building operations on the 12th October, 1990, having engaged Ballymore Homes as builders. The solicitors for Mrs. McKimm wrote to the builders informing them that they had encroached upon her land and demanded that they should desist from doing so. The small triangular area of land which Mrs. McKimm was claiming was vital to the building operations as the vehicles were unable to achieve access without it. There was an alternative route but that was via...

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