Greenband Investments v Bruton and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Clarke
• Judgment Date: 09 March 2011
• Neutral Citation: [2011] IEHC 109
• Date: 09 March 2011

[2011] IEHC 109

THE HIGH COURT

[No. 3677 P/2008]

Greenband Investments v Bruton & Ors

BETWEEN

GREENBAND INVESTMENTS

PLAINTIFF

AND

MATTHEW BRUTON, DENIS WALSH AND PATRICK HOLOHAN

DEFENDANTS

GREENBAND INVESTMENTS v BRUTON & ORS UNREP CLARKE 30.1.2009 2009/24/5829 2009 IEHC 67

MOUNT KENNETT INVESTMENT CO & GREENBAND INVESTMENTS v O'MEARA & ORS UNREP CLARKE 9.3.2011 2011 IEHC 210

MOUNT KENNETT INVESTMENT CO v O'MEARA & ORS UNREP SMYTH 21.11.2007 2007/42/8875 2007 IEHC 420

DAMAGES

Breach of contract

Sale of land - Specific performance ordered - Loss suffered by plaintiff arising from delay in securing rights over land - Mitigation of loss - Second site of land purchased by plaintiff in order to mitigate damages potentially arising from breach of contract by defendants - Whether second site solely or substantially purchased in order to mitigate loss - Whether probable that plaintiff would have purchased second site if no breach of contract by respondents - Calculation of damages - Significant fall in property prices - Whether analytical approach to calculation of damages possible - Pressure on plaintiff to secure purchase of second site - Foreseeability of loss - Whether premium paid by plaintiff for second site - Extent of premium - Whether appropriate to allow damages for stamp duty - Interest - Loss of opportunity - Professional fees - Damages awarded (2008/3677P - Clarke J - 9/3/2011) [2011] IEHC 109

Greenband Investments v Bruton

Facts The plaintiff sued the defendants in their capacity as trustees of the Irish Coursing Club (ICC). In earlier proceedings this court decided that there was an enforceable contract between the plaintiff herein and the ICC for the sale of a small strip of land for €100,000 and specific performance of that contract was ordered. That aspect of the case was under appeal to the Supreme Court. However, the plaintiff maintained that the delay which it encountered in securing rights over the strip of land in question resulting from breach of contract by the ICC in failing to complete the relevant sale gave rise to very substantial losses and it sought damages herein. It was said on behalf of the plaintiff that the strip of land was necessary to enable it to proceed with a significant commercial development, being a shopping centre, and in particular the planning permission for the development required the relocation of certain services under the strip of land and furthermore the financial success of the development depended on there being an anchor tenant. Marks and Spencer was obtained as such anchor tenant but it was submitted that without the strip of land, or some equivalent method of access, it would not have been possible for the plaintiff to comply with its obligations to Marks & Spencer, which, in turn, was likely to have led Marks & Spencer not going through with their agreement to be anchor tenant with, in further turn, disastrous consequences for the viability of the shopping centre development. The plaintiff argued that as a result of the foregoing, it was reasonable for it to seek to acquire an alternative piece of land in order to meet its obligations in respect of the planning permission and, most particularly, to provide service access to Marks & Spencer. The plaintiff in fact purchased a large commercial building some short distance from the strip of land for €4,000,000 and it argued that it was necessary to purchase that site in order to mitigate the damages which might otherwise have arisen if, as a result of the ICC's breach of contract, Marks & Spencer had departed the scene and the project as a whole had collapsed. It was submitted on behalf of ICC that the purchase of the site was not, or was not exclusively, for the purposes outlined by the plaintiff but in fact provided the plaintiff with an increased opportunity to exploit other lands owned by it.

Held by Clarke J. in awarding to the plaintiff damages in the total sum of €640,000: That the plaintiff's claim was for monies which were said to have been properly expended in mitigating loss. There were undoubted independent attractions to the acquisition of the site purchased by the plaintiff beyond the need to provide replacement access for the ICC road and there was some realistic possibility that the plaintiff would have purchased that site even if it had the use of the ICC road. However, the need to accommodate an access road for Marks & Spencer was certainly a factor, which bore on the decision to acquire that site. Furthermore, additional pressure was placed on the plaintiff to conclude a deal regarding that site due to other interest in the site, and that was a factor to be taken into account in assessing damages. It was clearly foreseeable that, in the event the ICC was to be guilty of breach of contract, the plaintiff would have to seek an alternative means of access to the development. The plaintiff was entitled in all the circumstances to general damages in the sum of €500,000, interest on that sum of €50,000, loss of opportunity in respect of the Greyhound Stadium €50,000 and increased professional fees related to planning alternatives to the ICC road in the sum of €40,000.

Reporter: L.O'S.

1. Introduction

2 2 1.1 In this case, the plaintiff, ("Greenband") sues the defendants ("the Trustees") in their capacity as trustees of the Irish Coursing Club ("ICC"). For reasons set out in an earlier judgment in this case ("the previous judgment") ( Greenband Investments v. Bruton & Ors [2009] IEHC 67) I came to the view that there was an enforceable contract between Greenband and the ICC for the sale of a small strip of land for €100,000. Specific performance of that contract was ordered and that aspect of the case is now under appeal to the Supreme Court.

3 3 1.2 However, Greenband maintains that the delay which it encountered in securing rights over the strip of land in question resulting from breach of contract by the ICC in failing to complete the relevant sale has given rise to very substantial losses. At the hearing which gave rise to the previous judgment it was agreed by all concerned, and accepted by me, that it would be appropriate to leave over any question of damages. The issue of the damages to which Greenband may be entitled has now, however, been heard, and this judgment is directed to the issues which arise.

4 4 1.3 The general circumstances surrounding the contract are set out in the previous judgment. I will shortly address the facts insofar as they are relevant to the issues which I now have to decide. However, in simple terms, it is said on behalf of Greenband that the strip of land concerned was necessary to enable Greenband to proceed with a significant commercial development, being a shopping centre, on a site known as the Showgrounds in Clonmel ("the Showgrounds"). It is said that the purpose behind the purchase of the strip of land which is at issue was twofold. First, the planning permission for the Showgrounds development required the relocation of certain services under the strip of land in question. Second, the financial success of the development depended on there being an anchor tenant. Marks & Spencer had been secured as such anchor tenant and an agreement entered into with that company. The relevant agreement provided for a service access to Marks & Spencer. It is said that, without the strip of land in question, or some equivalent method of access, it would not have been possible for Greenband to comply with its obligations to Marks & Spencer, which, in turn, was likely to have led to Marks & Spencer not going through with their agreement to be anchor tenant with, in further turn, disastrous consequences for the viability of the shopping centre development.

5 5 1.4 As it happens, this is the second judgment delivered today in respect of issues relating to breach of contract bearing on the Showgrounds Shopping Centre. In Mount Kennett and Another v. O'Meara and Others (Unreported, High Court, Clarke J., 9 ^th March, 2011), I have set out a detailed background to the development of the Showgrounds Shopping Centre.

6 6 1.5 Against that background it is appropriate to turn to the issues which arise.

2. The Issues

2 2 2.1 While the ICC has appealed against the order for specific performance which I have made in these proceedings, for the purposes of this hearing, it is, of course, quite properly accepted by the ICC that I must proceed on the basis that the previous judgment was correct and that the ICC are in breach of contract. It also needs to be noted that, as part of the terms on which a stay was granted to the ICC, pending appeal, Greenband has, in practice, the use of the strip of land at present. The case must, therefore, be considered on the basis that Greenband have had, in practice, their contractual rights from the time of the earlier trial. If the ICC should succeed on appeal, then, of course, it will be determined that there was no breach of contract in the first place. If the ICC should fail in their appeal, then the lands will become owned by Greenband, but much of the practical benefit of being able to use the lands in the way in which Greenband required, would have been available to Greenband since the earlier trial. In substance, therefore, the immediate consequence for Greenband of the breach of contract by the ICC in relation to the agreement in question is that Greenband did not have the relevant lands available to it for the period between when the contract should have closed and the time when the terms on which a stay, pending appeal to the Supreme Court, were imposed.

3 3 2.2 In simple terms, Greenband's case is that it was faced, during that period, with the real possibility of the shopping centre project unravelling. Greenband argues that, in those circumstances, it was reasonable for it to seek to...