Dully v Athlone Town Stadium Ltd, No.5

• Jurisdiction: Ireland
• Judge: Mr. Justice Richard Humphreys
• Judgment Date: 14 November 2018
• Neutral Citation: [2018] IEHC 704
• Docket Number: [2017 No. 252 S.P.]
• Court: High Court
• Date: 14 November 2018

[2018] IEHC 704

THE HIGH COURT

Humphreys J.

[2017 No. 252 S.P.]

BETWEEN

DAVID DULLY

PLAINTIFF

AND

ATHLONE TOWN STADIUM LIMITED

DEFENDANT

(No. 5)

Company and Commercial Law – Equity and Trusts – Damages – plaintiff seeking damages to recover costs associated with the defendant company’s breach of trust - whether the plaintiff could recover damages and whether the defendant could amend the counterclaim

Facts: The High Court in four prior judgments regarding this case had already removed the defendant company as a trustee of the trust in issue, directed the conveyance of the legal interest in the property and permitted the plaintiff to deal with the remaining reliefs sought, particularly damages, by way of special summons. The plaintiff was claiming damages for costs incurred as a result of the defendant company’s breach of trust, to include the cost of seeking an alternative to an AstroTurf pitch, the return of VAT monies held by way of constructive trust, and the return of monies received by the defendant which were not accounted for in violation of the defendant’s role as a trustee. After the close of the defendant’s submissions, the defendant sought to amend the counterclaim arguing that the plaintiff was not a trustee of the club.

Held by Humphreys J that the defendant could not amend the counterclaim as it was late in time, unnecessary, and repetitive of an argument already rejected by the Court. Humphreys J held that the plaintiff had locus standi as a trustee and that each of the plaintiff’s claims for damages were recoverable in full. Humphreys J rejected the defendant’s counterclaim.

Relief granted.

JUDGMENT of Mr. Justice Richard Humphreys delivered on the 14th day of November, 2018

1 This is the fifth judgment in this matter, the four previous ones being:

(i). Dully v. Athlone Town Stadium Ltd. (No. 1) [2018] IEHC 309 [2018] 4 JIC 1203 (Unreported, High Court, 12th April, 2018) in which I removed the defendant as a trustee of the trust in issue and directed the conveyance of the legal interest in the property to a new trustee.

(ii). Dully v. Athlone Town Stadium Ltd. (No. 2) [2018] IEHC 225 [2018] 4 JIC 1603 (Unreported, High Court, 14th April, 2018) in which I declined to order a stay on the conveyance of the legal title.

(iii). Dully v. Athlone Town Stadium Ltd. (No. 3) [2018] IEHC 366 (Unreported, High Court, 30th May, 2018) in which I made an order pursuant to O. 3(22) of the Rules of the Superior Courts to allow the plaintiff to deal with the remaining reliefs sought, particularly damages, by way of special summons.

(iv). Dully v. Athlone Town Stadium Ltd. (No. 4) [2018] IEHC 433 [2018] 7 JIC 1601 in which I dealt with a motion for discovery and particulars brought by the defendant and directed that the plaintiff swear a further affidavit in that regard.

2 I now deal with the damages element of the claim. I have received helpful submissions from Mr. John Paul Shortt S.C. (with Mr. Martin G. Durack B.L.) for the plaintiff and from Mr. Michael Forde S.C. (with Mr. Laurence Masterson B.L.) for the defendant.

Irregular filing of an affidavit

3 On 11th September, 2018, when dealing with the first day of the damages claim, I struck out Mr. Declan Molloy's affidavit of 13th August, 2018, on Mr. Forde's application, as irregularly filed. While that affidavit purported to have been filed by Niall McNelis, Solicitor, Mr. Forde informs me that it was not so filed. Mr. Molloy has no entitlement to file an affidavit independently of the defendant's solicitor for a number of reasons, one of which is that, absent exceptional circumstances, a company cannot act in litigation except through a solicitor. Furthermore, insofar as the purported affidavit contains a statement that is filed on behalf of Niall McNelis, in purporting to file it Mr. Molloy thereby misled the Central Office and therefore the High Court. Certainly this development does not assist his credibility. The purported affidavit exhibits a number of documents that could have been introduced at the substantive hearing but for whatever reason were not relied on. A properly functioning legal process does not allow parties to hold back material and then introduce it at a later stage, having received a judgment with which they do not happen to agree.

Irregular delivery of a notice of counterclaim or set-off

4 Without seeking leave of the court, Mr. Forde delivered a notice of counterclaim or set-off. To do so without leave misunderstands the summary nature of the procedure by special summons. A counterclaim is not in principle precluded but, because the process is in principle a summary one, a defendant must apply to the court for leave in that regard. Having heard submissions from the parties in that regard on 11th September, 2018, I gave the defendant liberty to file the counterclaim and liberty to the plaintiff to file a reply within specified time limits.

Eleventh-hour attempt to amend the notice of counterclaim

5 Following completion of all cross-examination, Mr. Shortt, on behalf of the plaintiff, indicated that he was not proposing to make a submission. Mr. Forde then made a lengthy submission on damages, which concluded on Tuesday, 13th November, 2018 at around 3.50 pm. I asked the parties at that point whether they wished me to sit later or to alternatively to resume the matter the following day. Mr. Forde expressed a strong preference for the latter, so I acceded to that request. When the court resumed on 14th November, 2018 I was presented with a draft ‘ amendment to defence/counterclaim/set-off’ seeking to deny that the plaintiff is a trustee of the club. Mr. Forde submits that an amendment can be made at any stage of the proceedings until the final order is perfected, which is certainly true. Of course, merely because something is legally possible does not mean that it is necessarily always appropriate. The amendment was to add in an unspecified part of the notice of counterclaim that ‘ the plaintiff is not a trustee of the club, not having been appointed in the manner provided for in r. 34(d) of its constitution or in any other manner provided for therein by way of resolution of a duly constituted general meeting of the club's members and accordingly lacks the capacity to maintain these proceedings.’ There are a number of distinct reasons why this amendment was not appropriate.

(i). That was a point that was there from the beginning and is a development of the locus standi argument that Mr. Forde has been making unsuccessfully all along. It did not arise simply because Mr. Forde had the last-minute idea of recalling Mr. Dully to the witness box on 13th November, 2018.

(ii). Indeed, Mr. Forde accepts that the intention to amend arose on 12th November, 2018 but for some thus far unspecified reason was not signalled to the court until 14th November, 2018. It is probably fair to say that that is not a very satisfactory situation. It certainly does not seem to meet the requirement of explanation that is required to allow an amendment under the doctrine in B.W. v. Refugee Appeals Tribunal [2017] IECA 296 [2018] 2 I.L.R.M. 56, per Peart J.

(iii). In discussion with the court, Mr. Forde accepted in any event that he probably does not need the amendment. The basic reason why an amendment is not necessary is that there is no document equivalent to a defence in the special summons procedure. If there was such a document, then the question of an amendment might arise. In a sense, the notion of making the locus standi point as an amendment to the counterclaim is fundamentally misconceived because if the point embodied in the amendment was upheld then the counterclaim would have to be dismissed, which Mr. Forde indeed accepts because his contention is that his client is not entitled to damages against Mr. Dully personally, but only against what he says is a properly appointed trustee. On the assumption, which I will come to, that Mr. Forde is entitled to make some sort of a locus standi argument at this stage of the proceedings, the amendment is not necessary to enable him to make any such point.

6 So on that basis I refused the amendment. It is possibly worth recalling that I did say in the No. 1 judgment that the conduct of the defendant had been obstructive and certainly the eleventh-hour nature of the misconceived application to amend is very much of a piece with that. That is probably not helped by Mr. Forde's half-complaints about being asked questions by me or about my asking him about caselaw not referred to by the other side. Posner J. has urged judges to be (respectfully of course) interactive with counsel in respect of legal submissions on the grounds that one gets the best out of them that way (‘ A judge should be aggressive at oral argument. The prepared remarks of the lawyers rarely add much to what is in their briefs; only through questioning does the judge learn more about the case than he knows already’, Richard A. Posner, Reflections on Judging (Harvard University Press, Cambridge, Massachusetts, 2013) p. 129). Obviously that is to be distinguished from excessive intervention during oral evidence: Murtagh v. Minister for Defence [2018] IESC 37 (Unreported, Supreme Court, 30th July, 2018). Counsel should not bridle at such interrogation during submissions and can take it that as far as I am concerned such queries are made in a spirit of inquiry and not of assertion. The court is certainly entitled to consider law not raised by the parties, as the overriding point is to ensure that the court does not go wrong on the law, albeit that where the new authority is crucially new and makes a difference (which was certainly not the case with the quotation from Biehler's text book in the No. 1 judgment), the best practice is normally to put that to the parties, and that is what I have tried to do here. It is certainly not the case that the court is required to...